VZCZCXRO6493
PP RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #5884/01 3540931
ZNR UUUUU ZZH
P 200931Z DEC 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5945
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 04 MOSCOW 005884 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM SOCI RS
SUBJECT: THE RUSSIAN NGO LAW ONE YEAR LATER 
 
REF: MOSCOW 05745 
 
Summary 
------- 
 
¶1.  (SBU) More than year after the implementation of 
controversial amendments with tougher reporting requirements 
for Russian non-governmental organizations, the fears of 
extensive, politically-motivated NGO closures have not 
materialized.  A USAID-funded study, civil society 
assessments and Embassy observations indicate: only 32 
percent of Russian NGOs are in compliance, with foreign 
financed human rights organizations more capable than most of 
fulfilling the GOR requirements.  Small, often 
service-oriented NGOs are disproportionately affected, with 
some choosing to operate as non-legal entities instead. 
While noncompliance leaves most NGOs vulnerable to 
prosecution, there is no evidence of a GOR campaign to use 
the amendments to shutter NGOs.  However, there are instances 
of localized conflicts with the Federal Registration Service 
and a few cases that appear politically motivated. 
Complicating assessments of the amendments has been the 
absence of reliable statistics on the number of active NGOs. 
The endemic institutional weakness of Russian NGOs have 
magnified the effects of the amendments.  We will continue to 
urge GOR modifications to the amendments that will help bring 
NGOs into legal compliance, in a manner that does not impinge 
upon their ability to operate transparently and effectively. 
End Summary. 
 
ICNL Assessment of NGO Law 
-------------------------- 
 
¶2.  (SBU) The results of a December 2007 USAID-supported 
study by the International Center for Not-for-Profit Law 
(ICNL), assessing the cumulative impact of the new April 2006 
reporting requirements for Russian NGOs, broadly tracks with 
the impressions of the Embassy and other long standing 
observers of Russian civil society.  (Note:  This cable does 
not assess the registration law's effect on international 
NGOs, with all of those American NGOs in contact with the 
Embassy having secured registration by the end of October 
2006.)  The report's key findings include: 
 
-- Only 32 percent of Russian NGOs are in compliance with the 
reporting requirements.  ICNL notes that the high level of 
noncompliance suggests a large number of inactive NGOs. 
 
--  Human rights organizations - particularly Western 
financed NGOs - are more likely and more capable of meeting 
the higher reporting standard. 
 
--  The burden of the new reporting requirements falls 
disproportionately on small NGOs, which suffer from a 
shortage of staff, institutional capacity, and even 
rudimentary understanding of the legislative requirements. 
 
--  While noncompliance leaves NGOs vulnerable to 
prosecution, there is no evidence that the Federal 
Registration Service (FRS) has systematically fined or taken 
actions to close organizations that have failed to file 
reports on time or accurately. 
 
--  There is no evidence of the law being disproportionately 
applied to the detriment of human rights groups; however, the 
nature of the reporting requirements and the law's ambiguity 
with respect to certain provisions allow government officials 
"excessive discretion" in interpreting and enforcing the new 
measures. 
 
 
Who Suffers: Small NGOs Without Foreign Financing 
--------------------------------------------- ---- 
 
¶3.  (SBU) Observers broadly agree with the ICNL conclusion 
that the law disproportionately burdens small NGOs, which 
lack the staff and resources to file accurate reports.  By 
law the NGO must file an annual report detailing its 
activities for the next year.  Foreign NGOs must also 
complete quarterly financial reports indicating their funding 
sources.  In a September assessment, the Center for the 
Development of Democracy and Human Rights (CDDHR) noted that 
NGO registration documents comprise at least 60 pages. Even 
minor changes in the organization's CEO or address require 
submission of notarized documents within three days of the 
change.  A delay could result in a substantial fine, and two 
fines could result in de-registration.  However, no 
organization to date has been fined or de-registered for 
failure to comply.  The FRS has new authority to audit NGOs 
for compliance with the new law.  The CDDHR report indicates 
that from January to April, FRS audits had discovered 
 
MOSCOW 00005884  002 OF 004 
 
 
violations by 6,000 NGOs although most of the violations 
minor in nature (e.g., missing protocols or improper 
paperwork). 
 
¶4.  (SBU) According to both Moscow Helsinki Group (MHG) 
Director Lyudmila Alekseeva and World Wildlife Fund Director 
Igor Chestin, the "innocent bystanders" in the registration 
process are the small, often service-oriented organizations, 
which were never the target of GOR suspicions of "orange 
revolutions."  In contrast, Alekseeva told us that all major 
human rights and environmental organizations had survived 
unscathed, with MHG itself "untouched" by the new process. 
For those without the technical assistance at hand, however, 
compliance has been difficult and exacerbated by a lack of 
resources to obtain the expertise.  The seven-person 
environmental NGO Baikal Ecological Wave told us that it 
needed to hire two individuals to deal with reporting 
requirements and to ensure compliance with tax and labor 
laws. 
 
¶5.  (SBU) Some NGOs have reportedly decided to forego formal 
registration and operate instead as non-legal entities or 
"movements."  While these groups are restricted in what they 
can do, and are prevented from opening bank accounts or 
renting space as an organization, they can still legally 
operate.  MHG confirmed this trend, with Alekseeva giving two 
examples -- "Mothers of Children in Wheelchairs" and "Union 
of Deceived Investors" -- who jettisoned the registration 
process and MHG office space for their meetings.  Alekseeva 
noted the irony that registering as an NGO increased an 
organization's vulnerability, whereas operating as a 
non-legal entity (with the attendant restrictions) left 
activists better protected. 
 
The Fall-Out Is Small 
--------------------- 
 
¶6.  (SBU) While the 2006 amendments could be deployed to shut 
down NGOs, our contacts have not noticed a systematic effort 
by authorities to do so.  INCL's Daria Miloslavskaya 
recounted scattered instances of NGOs experiencing problems, 
but was not able to link them to the new requirements, nor 
could she pinpoint a specific reason why a particular NGO 
experienced problems with the FRS.  The CDDHR report also 
indicated some cases of NGOs running afoul of the local FRS 
offices, but could identify no FRS pattern of behavior.  This 
conclusion tracks with Embassy's assessment: in our travels 
around the country and frequent contacts with the NGO 
community, we have not discovered any systematic effort to 
use the amendments to shutter NGOs. 
 
¶7.  (SBU) We are aware of a few active organizations that 
were sanctioned under the NGO law.  A notable case occurred 
on October 24 when the FRS suspended the operations of the 
Samara chapter of the USAID-funded election monitoring NGO 
Golos for six months for violating financial reporting 
requirements.  Golos maintained that the charges were 
politically motivated, and that regional authorities had 
sought to close down Golos because of its perceived 
connection to opposition groups.  Golos claimed that it was 
not given sufficient time or afforded due process to answer 
the allegations.  Nationwide, however, Golos succeeded in 
fielding 3,000 observers during the December 2 Duma 
elections, with only a handful of its staff facing official 
restrictions (reftel).  In the case of the Educated Media 
Foundation (Internews), the GOR used federal crime and tax 
laws to freeze the NGO's accounts and seize its computers. 
With respect to the Russian-Chechen Friendship Society, the 
GOR secured an extremism conviction against its Director, 
which served as the basis for the registration denial. 
 
¶8.  (U) The CDDHR report notes other prominent cases of NGOs 
experiencing bureaucratic problems with the FRS.  For 
example, the human rights flagship "Memorial" could not 
register a change in its CEO because the FRS first demanded 
evidence that it was a "national" organization.  The report 
documented instances of FRS warnings or refusals to register 
changes sometimes for minor violations or infractions.  In 
Voronezh, the Center for Public Awareness, Arts and Cinema 
"Youth" was denied a change of CEO due to typographical 
errors in the documents.  In Ryazan the local FRS suspended a 
local human rights group for one month because it allegedly 
held meetings in a private apartment.  The St. Petersburg NGO 
Bellona was cited for undertaking commercial activity, since 
the FRS considered the publication of donors' names in 
Bellona's reports as "advertising" for sponsors.  In 
Bashkortostan, the FRS suspended the activities of one NGO 
because the CEO was ill and could not be present on the day 
of an FRS audit.  The FRS in Tyumen twice refused to register 
Rainbow House, a gay youth organization, as an NGO since its 
activities "undermined the security of the Russian 
 
MOSCOW 00005884  003 OF 004 
 
 
Federation."  The CDDHR report noted that these and other 
examples indicate that the FRS may have overstepped its 
authority or misinterpreted the law, but did not identify any 
systematic targeting of human rights NGOs. 
 
NGO Noncompliance Raises Vulnerabilities 
---------------------------------------- 
 
¶9.  (SBU) The amended NGO law has increased substantially the 
vulnerability of most NGOs to official scrutiny, since the 
vast majority of organizations are not in full compliance. 
According to the FRS, while NGOs were required by law to 
submit financial reports by April 15, only 20 percent did so. 
 By the first of July, the compliance rate increased to 28 
percent, and by October 31 to 32 percent. 
 
¶10.  (SBU) Although FRS Chief Vasilyev attributed this low 
compliance rate to the willful decision of NGOs to ignore the 
law, contacts in the NGO community more often note ignorance 
of the law itself or the difficulty of full compliance. 
ICNL's Miloslavskaya reported that at most 30 percent of NGOs 
fully understand the scope of the amended NGO law. 
Typically, an NGO will learn of a particular requirement only 
after the FRS has conducted an audit and noted a deficiency. 
At that point, the organization will have earned an 
administrative warning.  After two such warnings the 
organization can be shuttered. 
 
Number of Active NGOs Difficult to Assess 
----------------------------------------- 
 
¶11.  (SBU) An analysis of the effects of the new reporting 
requirements is made more difficult by the absence of any 
reliable data on the number of active NGOs in Russia.  Prior 
to implementation of the 2006 amendments, non-profit or 
non-commercial organizations registered with the tax 
authority, whereas social movements or social organizations 
registered with the Ministry of Justice.  Neither government 
agency routinely released statistics on the numbers of 
registrants.  The Federal Registration Service currently has 
responsibility for registering both types of organizations; 
however, even this organization may not know the true number 
of NGOs.  Miloslavskaya told us that in some regions the tax 
authority still has not transferred some NGO registration 
records to the local FRS. 
 
¶12.  (SBU) As a result, wildly disparate estimates circulate 
on the scope of Russian civil society.  FRS Chief Sergey 
Vasilyev, in an interview with Rossiyskaya Gazeta, estimated 
there were 216,000 registered.  In a May 2006 statement, the 
Ministry of Foreign Affairs cited 400,000 NGOs, whereas 
Moscow Helsinki Group (MHG) Chairperson Lyudmila Alekseeva 
alleged 650,000 in 2005, with Miloslavskaya unwilling even to 
provide a rough estimate of the number of NGO's operating in 
Russia during that time period.  We could not locate 
corroborating information for either the MFA or MHG estimate. 
 Miloslavskaya maintained that the number of NGOs today does 
not differ much from before the amendments, since most 
Russian NGOs went along with the new rules and its reporting 
requirements as they were not subject to re-registration. 
ICNL had not detected any large number of NGOs declining 
registration under the new rules or changing status to 
unregistered social movements.  While the ICNL report notes 
that the FRS applied for the closure of approximately 2,600 
NGOs for failure to adhere to legislation pre-dating the 
April 2006 amendments (compared to 8,761 new registrations), 
neither ICNL nor other civil society watch groups have found 
evidence that these were active organizations. 
 
NGO Structural Weaknesses Continue 
---------------------------------- 
 
¶13.  (SBU) Ford Foundation Director Steven Solnick told us 
that the endemic weakness of civil society in Russia has 
magnified the effect of the new amendments and reporting 
requirements on the NGO community.  NGOs in Russia have grown 
too dependent on Western financing, he said, and have 
remained too isolated from popular opinion.  Wrapping up five 
years as Ford Foundation head, Solnick concluded that NGOs 
were less resourceful now in diversifying funding.  They 
eschewed volunteers, and remained anachronistically hostile 
to media campaigns and other modern tools for building ties 
with the public.  The GOR had succeeded in "crushing" 
community activism, according to Solnick, and flagship human 
rights organizations were blinded by an elitism that flowed 
from a Soviet intelligentsia-like bias against the "masses." 
"If Putin closed Moscow Helsinki Group tomorrow," Solnick 
asked, "would any one come out on the streets in protest?" 
 
¶14.  (SBU) Alekseeva agreed with the thrust of Solnick's 
critique, but attributed civil society weakness to the 
 
MOSCOW 00005884  004 OF 004 
 
 
immaturity of democracy in Russia and the fact that 
revolutions have always been handed down from above and not 
won by the people.  Alekseeva expressed satisfaction that the 
increasingly authoritarian nature of the Putin government 
would mean the "fight for democracy begins now."  What had 
been accomplished by civil society, she emphasized, was the 
promulgation of knowledge and the inculcation of an 
expectation of human rights (which were only "so-called" in 
Soviet times).  As long as times were good and coffers full, 
Alekseeva downplayed real movement forward.  However, 
Alekseeva argued that grievances were accumulating and when 
they came to a boil it would be civil society's 
responsibility to ensure that a new generation of human 
rights activists was prepared to capitalize on public anger. 
 
Comment 
------- 
 
¶15.  (SBU) When the amendments were passed, the NGO community 
rightly feared that the requirements would be used to target 
watchdog groups and perceived opponents of the Putin regime. 
That has not happened and, ironically, the Western-financed 
human rights organizations have been among the most capable 
of meeting the new administrative burdens.  However, the 
vulnerability of the NGO community to fines and selective 
prosecution is real.  We will continue (along with EU 
countries and in support of Russian voices) to urge GOR 
reform of the NGO amendments that will ease the reporting 
requirements (or exempt certain categories all together), 
clarify the implementing legislation, define the scope of 
audits, and restrict the FRS's ability to close NGOs. 
BURNS