In recent months, a new threat to the sustainability of civil society organizations in the region has surfaced: political-administrative control over international and domestic sources of funding.
As of May 2021, at least five countries – Nicaragua, Guatemala, Venezuela, El Salvador and Mexico – have made concrete progress in debating and approving laws paving the way for closer control by government of such organizations’ activities, projects and links.
What do the new regulations have in common?
- A political rationale:
Their origins are rooted in the premise that civil society organizations could be receiving (external) funds intended for the development of destabilizing, illicit activities or that compromise national sovereignty. This logic is clearly visible in regulations such as the Law on Foreign Agents sanctioned by the Nicaraguan Assembly in October 2020 or the implementation of the Registry with the National Office against Organized Crime and Terrorist Financing of Venezuela (April 2021), which target non-profits among others.
Recent weeks have seen a ratcheting up of the rhetoric. In El Salvador, members of a special legislative committee created in mid-May to investigate the use of funds granted by the National Assembly to non-profit organizations distinguished between “good” and “bad” NGOs, the latter referring to those with a “political or partisan agenda”. Meanwhile, in the same month, Mexican President López Obrador presented the U.S. government with a diplomatic note demanding it withdraw its funding for the organization Mexicanos Contra la Corrupción y la Impunidad (MCCI), which it sees as a contrarian political actor, going so far as to publicly disseminate fiscal documents containing sensitive data. For his part, Nicaraguan President Daniel Ortega referred to NGOs in early March as “organizations that launder money to develop terrorist and destabilizing activities”.
- Creation of controls and registries:
The most widespread control measure is the creation of one or more registries that oblige civil society organizations to provide detailed information – and in some cases sensitive data – on their operations, sources and destination of the foreign funding they receive.
In the case of Nicaragua, for example, all entities, foundations and associations that receive funds from abroad must register as “foreign agents” and report on any transfer of funds or assets they receive to carry out their activities, their origin, use and destination. Similarly, in Guatemala, Legislative Decree No. 4-2020 -recently validated by the Constitutional Court- obliges NGOs to identify donor persons or entities, the origin and destination of donations and the sources of foreign funding.
In Venezuela, a bill for an International Cooperation Law, long sought by the government, empowers the President to create an Integrated Registry System for Non-Governmental Organizations, which, beyond its administrative aspects, could in practice function as a means of control of their internal functioning. Similar concerns surrounded the creation by decree in mid-2020 of the public agency for international cooperation of El Salvador, which centralizes under the governmental orbit the channels and opportunities for access to external funds.
- A penalty regime:
Compliance with these new restrictive regulations is not just necessary for the organizations to keep working in the country. Ignoring them exposes them to specific and diverse risks, including the initiation of criminal proceedings or administrative penalties which in some cases may bring to a halt their activities or revoke their legal status. In Mexico, for example, a tax reform enacted in December stipulates that organizations may lose their operating license if more than 50% of their funds stem from donations for activities “other than those for which they were authorized”.
Recent experience shows these threats did not take long to become real for some organizations. Just three months after Nicaragua’s Violeta Barrios de Chamorro Foundation refused to register as a “foreign agent” and announced the cessation of its activities, the Ministry of the Interior launched an investigation against it over alleged money laundering.
Of course, there is little new about governments subjecting NGOs to discretionary control or intimidation through needless red tape or by taking advantage of the loose regulatory regime applied to these organizations. The more than 10 Nicaraguan non-profits that lost their legal status since 2018 can testify to this, as can the 24 that appear on the “black list” of the Salvadoran Assembly’s investigative committee, circulated on social media. However, there are now fears this latest regulatory wave marks a shift up in gears in efforts to constrain civil society.
It should be stressed here that, at issue is not the question of whether or not NGOs should need to meet the same standards of transparency and accountability as must be complied with under law by other private entities. That they should is entirely reasonable and unobjectionable. Rather what raises concern is the justification of the regulations as part of a political paradigm that criminalizes dissent without offering the right of reply and that shrouds in suspicion those working for fairer, more transparent and participatory democracies.
When dissent and legitimate social demand come to be seen as destabilizing acts, the innocence and good intentions of NGOs cease to be presumed from the outset. Which is why the mentioned regulations run counter to the State’s obligation to protect and guarantee democratic space for civil society, an essential pillar for the promotion of human rights, democracy and the rule of law.