NGOs Feel the Squeeze
The category of registration is critical for access to funds. The center, according to Yu, receives 80 percent of its 1,000,000 yuan ($146,436) annual funds from foreign sources. A regulation, effective from March 1, bars entities like Beijing Yirenping Center – categorized as “domestic enterprises” – from overseas contributions.
As the center is not registered as a social group recognized by the Ministry of Civil Affairs, this regulation of the State Administration of Foreign Exchange (SAFE) has in effect cut its lifeline. Circular of the SAFE on Relevant Issues Concerning the Administration of Donations in Foreign Exchange by Domestic Institutions notified in December 2009, asks “domestic enterprises ac-cepting/making donations from/to overseas non-profit institutions” to provide “notarized donation agreement specifying the purpose of the fund” for foreign exchange account in the bank.
Two months since the regulation came into effect, banks, notary service providers and non-profit outfits are in the dark about how to get a donation agreement “notarized”. Thus, “domestic enterprises” have not been able to withdraw a single foreign donation from the bank, claims Yu. “More than 100,000 yuan is locked up in our foreign exchange account, and some cases have been postponed for lack of funds.”
The financial squeeze may affect thousands of non-governmental organizations (NGOs) that were registered as enterprises, said Fu Tao, director at China Development Brief, an NGO studying China’s civil society since 1998.