In the area of guarantees against state interference in internal matters of associations, foundations and other types of non-profit entities, legal framework is in line with standards. Freedom of association is guaranteed by the Constitution of the Republic of Serbia, and there are limitations only in terms of establishing secret and paramilitary associations. CSOs are autonomous to the state, and self-govern the internal structure and procedures. There is no basis on which the state is to intervene in appointing subjects in organizations. The Law on Associations stipulates that CSOs shall be run impartially by either a body of members or by elected representatives in the association’s bodies. There is no prescribed obligation to previously seek a license for a certain activity. The Law prescribes the obligation of entering activities in the Association’s Statute and during the Register Application submission, but leaves freedom in the choice of activity.
However, when it comes to protection freedom of association, including preventing third parties from violating the freedom of association, legal framework indicates disabling environment. Although, the Article 3 of the Law on Associations stipulates that an association shall be established and organized freely and shall be independent in pursuit of its goals, there are no specific provisions aimed at direct preventing third parties from the freedom of association. Also, no legal provisions aimed at protection of specific group of CSOs based on its field of operations. Based on civil and criminal laws, they exercise the right of protection as other private and legal entities.
Partially enabling environment has been assessed in the area of financial reporting (including money laundering regulations) and accounting rules and considering the specific nature of the CSOs and are proportionate to the size of the organization and its type/scope of activities. The regulations on the annual CSOs financial reporting partially recognized specific nature of CSOs. The Law on associations prescribes that associations shall keep ledgers, draw up financial reports and shall be subject to financial report auditing in line with the accounting and auditing regulations. Law on accounting recognizes a specific nature of the non-profit entities at certain level throughout separated accountancy framework. However, it still contains numerous unnecessary elements that are not relevant for the non-profits operating and make difficulties in recording data.
0 – 20 Fully disabling environment20 – 40 Disabling environment
40 – 60 Partially enabling environment60 – 80 Enabling environment
80 – 100 Fully enabling environment
Article 34 of Law on Associations prescribes that any associations which have received funds from the budgets of the Republic, Autonomous Province or local self-government shall at least once a year make available to the general public the report on their activities and on the scope and method of acquiring and using the financial means and forward it to the provider of such (financial) means. No specific recommendation in regard to this based on different type or size of CSOs. Provisions of the Law on Central Record of the Beneficial Owners whose Article 2 prescribes that the provisions of the Law refer to, among others associations as well as foundations and endowments are relevant for the work of CSOs. After registration of the real owner, there are no established obligations related to further reporting according to this law neither for CSOs nor other legal entities.
Legislation is in line with standards when it comes to restrictions and the rules for dissolution and termination meet the standards of international law and are based on objective criteria which restrict arbitrary decision-making. The Law on Associations allows the association to cease operations at any time, at the discretion of the highest body of the organization. The law also contains some provisions that regulate liquidation of association. Similarly, Law on Endowments and Foundations prescribe terms and procedure of deleting from the Register.
Additionally, there are no legal provisions related to disproportionate termination due to failing to submit its annual report on time. This situation is resolving with a paying fine as for other legal entities.
Practice partially met standards when it comes to sanctions for breaching legal requirements should be based on applicable legislation and follow the principle of proportionality. Law on associations provides punitive provisions for corporate offences and petty offences. A fine ranging from EUR 2.500 – 7.700 shall be levied for any corporate offence on any association if it performs directly a business or another activity Law on Associations 28 in order to make profit unrelated to its statutory goals, or not stipulated by its statute, or if it performs such an activity although the competent body has established that it does not fulfill the conditions for performing such an activity. A fine ranging from EUR 250 – 700 shall also be imposed on the responsible person at the mentioned association for the corporate offence.
Concerning the petty offences fine ranging from 300 – 3.300 EUR shall be levied on any association for a petty offence: 1) if it carries out its activities contrary to the law, its statute or its other internal regulations as well as contrary to the rules of the (con)federation of which it is a member 2) if it performs a business or another activity of a larger scope, or of a scope not necessary for achieving the association’s goals, paragraph 2, subparagraph 3); 3) if it does not utilize the assets and properties solely for the purpose of achieving its statutory goals); 4) if the foreign association’s representative office starts up its activities before it is entered in the Register.
The Law on Endowment and Foundations contains similar provisions with lower fines for both legal and responsible persons. The Law also provides that a fine ranging from EUR 1.100 to 3.000 shall be levied on endowments and foundations if they engage in activities before it is entered into the Registry. When it comes to other laws containing punitive provisions, it is a regular practice to make a difference in terms of the penalty for legal and natural persons, but the laws do not consider whether it is an association, foundation or company.
Practice indicates disabling environment in the area of the state interference in internal matters of associations, foundations and other types of non-profit entities. In a parliamentary debate, Aleksandar Martinovic, the chief of the SNS Parliamentary Group, said that reporters, as well as the NGOs, posted security-sensitive questions calling upon the Law on Free Access to Information of Public Importance, and accused them for “tendentious questions aimed at bringing down the security system of the Republic of Serbia.” He also accused former Commissioner of Information of Public Importance Rodoljub Sabic of working for foreign security agencies and Serbia’s opposition and against the SNS and Serbia. Martinovic said “Serbian citizens should know that we primarily talk about those who mostly demanded (information of public importance), and I say that again, security-sensitive information, like CINS, KRIK, BIRN, BIRODI, Natasa Kandic, Nemanja Nenadic (director of Transparency Serbia) and so on. In this way, Martinovic attacked independent civil society organizations BIRODI, Transparency Serbia, CRTA and the Humanitarian Law Center and editorial offices of independent media CINS, BIRN, Istinomer, TV N1, weekly Vreme, because of their research and analyzes, which are supported by facts “destroying the security system of the Republic of Serbia”.
Articles published by websites such as the Istraga and the Patriot contain information that discredits NGOs with critical approach to the Government. The Center for Research, Transparency and Accountability – CRTA, which deals with transparency and free elections, has been their latest target. One article states that the CRTA is influenced by foreign governments and that it is working against Serbia’s interests. Also, articles of the same content can be found on similar websites and show a systematic approach to this smear campaign.
In September 2019, Serbian President Aleksandar Vucic called the civil society organizations CRTA (Center for Research, Transparency and Accountability) and CESID (Center for Free Elections and Democracy) “so-called” and stressed that they were “false” organizations. On that occasion, he emphasized that he accepted all five requests they made, although according the Constitution he does not have the authority to decide on these issues (adoption of emergency procedure, public hearings, meaningless amendments in the Assembly, adoption of reports of independent institutions in the Assembly, special debate on the budget). He also pointed out that this was a malicious intention of the opposition and the civil sector, thereby identifying civil society organizations with opposition parties in order to discredit their expertise and disrupt the public image about them.
CI Resource Center was alarmed in 2 cases of the oversight when 2 CSOs connected it with their watchdog activities. Both inspection oversights were conducted according to the Risk Assessment mentioned above and without any notified irregularities in CSOs work. In addition, CI Resource center has been noticed several cases related to the approach among certain banks regarding the implementation of regulations in the field of money laundering. Namely, by applying the Law on real owners, some banks require submitting personal documents of all CSO members instead of just representatives of the management structures, which was the practice so far.
The majority of activists of the movement “Do not let Belgrade d(r)own” suffer as a result of orchestrated campaign that can be linked with the ruling arty. Vladimir Djukanovic and Marijan Risticevic (MPs) showed their pictures in the live program and in the Assembly. In the media they were accused of plotting to kill the president. The activists of the Initiative were 40 times at the front covers of the Informer, daily tabloid close to government, where they were targeted as traitors of Serbia. They are exposed to the smear campaign in the media, pressures on social networks, and pressures on the street.
However, according to the MM survey, from the total number of 52 organizations, 48 organizations responded that they did not experienced threats by government officials and 4 of them responded that they had; 50 organizations did not experience government intrusion into the internal work of the organization (e.g. during board meetings or events) and 2 of them responded that they did; 50 organizations responded that they haven’t experienced unannounced inspections by state authorities and two of them responded that they did.
Partially enabling environment has been assessed when it comes to cases of invasive oversight which impose burdensome reporting requirements. No organizations from the MM survey have responded that they experienced invasive oversight (e.g. excessive audit, other burdensome administrative requirements, targeted inspections etc.). However, according to data gathered in the survey for the purpose of the ACT Program excessive supervision of work/frequent inspections was reported by 3% of the CSOs and those are mainly CSOs involved in international cooperation (including European integration).
Based on recommendations of FATF and MONEYVAL expert committee, in June 2018, the Government adopted the document Money Laundering Risk Assessment and Terrorist Financing Risk Assessment with the accompanying Action Plan in order to implement the recommendations contained in this document. Based on this, stronger coordination was made between inspections in charge for associations and foundations. In order to exercise effective supervision and coordinate the work of inspectional services, the Coordination Commission for Supervisory Inspection established a Working Group for supervisory inspection of the non-profit sector. The Coordination Commission is an inter-agency coordination body, tasked with aligning and coordinating the work of inspections and enhancing the effectiveness of supervisory inspection through aligning plans of supervisory inspections and training programs, promoting the information exchange and professional and ethical standards of inspectors, monitoring and evaluation of inspections and supervision. The Working Group developed a document called Procedures and Criteria for Supervising NPOs. These Procedures introduce steps in preparing and developing a plan for consolidated supervision of NPOs, as well as exercising the consolidate supervision.
Practice is in line with standards in the area of sanctions applied in rare/extreme cases; they are proportional and are subject to a judicial review. According to the MM survey just 2 organizations responded they were sanctioned for noncompliance, and 50 of them they were not. One of them responded the sanction was proportional one of them considered that the sanction was excessive for the breach. According to the MM survey two organizations responded they were sanctioned for noncompliance, also responded that they used the opportunity to appeal in court. No available data on sanctions from the Working Group for supervisory inspection of the non-profit sector in the area of counter money laundry and financing terrorism.