The Guide is designed to help companies and individuals involved in CSR, NGOs and other community development programs understand and comply with the new civic law and its regulations of 2021. Throughout, we attempt to provide companies—and particularly their legal and compliance professionals—with a practice-oriented overview of the key features of the law. This guide will be particularly useful for companies with existing NGOs and CSR activities seeking to maintain the legality of their operations and increase their civic engagement in Egypt.

This Guide is organized into 3 discrete modules:

• Civic society actors and compliance procedures.
• Associations: Their Purpose, obligations, regulatory aspects and new Finacial considerations.
• More on Associations, Foregien NGOs, Volunteerism provisions and Penalties.

Part III: More on Associations, Foregien NGOs, Volunteerism Provisions and Penalties.

The associations are the main actor of Civic work in Egypt, that’s why the law and its ER regulate in detail its composition and organs. Moreover, beside associations, other civic work society actors have been regulated by the Law. This part of our guide highlights the establishment, administration, and organs of Civic foundations as well as unions. Accordingly, important stipulations also regulate the framework of foreign NGOs working in Egypt and its legal and administrative requirements.

Associations’ organs

Rules governing the associations’ organs are maintained by the CWP Law without major amendments, except for the following:

• the law referred to the associations’ internal regulation to determine rules governing the General Assembly - its reunion, procedure, decisions making - as well as BoD’s members election.
• Further, the law increased the duration of the first BoD’s assignment from 2 years to four.
• Director of the association must fulfil same previous personal conditions, and the law stipulates a new one providing that he must “haven’t been deprived of his civil and political rights nor been convicted by a final decision, nor have been listed on Terrorism lists.”

Associations of public interest

The CWP Law maintains previously applied rules. Only two significant amendments were added:

• On one hand, it is the authority of the Prime Minister and "to whom he may delegate" to give the association “public interest form”. The ER lists the criteria and conditions to be fulfilled in order to have such form.
• On the other hand, the law permits ministries and public entities to delegate the administration of one of its institutions or projects to an association of public interest upon the MOSS’

Civic Foundations

It is worth mentioning that the CWP Law stipulates that rules governing associations shall also apply to Foundations where specific articles are provided.

Accordingly, the law maintains the previously applied rules - section 4 - and introduces only two main amendments: it decreases the amount of capital to establish a foundation from 50k EGP to only 20k EGP and it cancelles the Egyptian nationality condition concerning the founding members of the Foundation. A foreign person can now be a founding member provided that the percentage of foreigners does not exceed 25%.

Foreign NGO’s stipulations

The CWP Law defines it as “a foreign legal person not aiming for profit, its head office is located in or outside Egypt, authorized to practice one or more activities of civic society and subject to the provisions of this law and in accordance with the rules stipulated therein.”

   Also, the law maintains the required license to allow a foreign NGO to practice civic activities in Egypt but without the previously stipulated duration limit of 3 years. A foreign NGO can now have a license from the MOSS who will determine the duration in it.

In addition to that, the law decreases the amount of deposit that must be paid by the foreign NGO from 300k EGP to only 50k EGP or its equivalent in USD, this amount shall increase up to 4 times upon the license’s renewal.

Article 108 of the ER confirmed the aforementioned, but with further clarification, as follows:

Foreign non-governmental organizations that wish to carry out one or more activities of civic society shall submit a request to the Ministry of Foreign Affairs on the standard form and attached to it the required data and documents, certified by the Egyptian embassy in the country of the organization.

New obligations are also stipulated, such as transparency and reports that must be presented upon demand to the administrative authority.

Finally, a prohibition is stipulated concerning receiving any funds other than those declared in the license’s request except upon the Minister’s authorization.

Civic Society’s Foundations Central Unit and its Local Units

The CWP Law abolished “the national NGO authority” previously created by law No.70/2017 and replaced it by “the Central Unit and Local Competent Units” in each governorate, which report to the MOSS. Art. 76 and 77 determine its competences and framework.

Despite the fact that previous law gave a supervisory role to the precedent authority over foreign NGOs only, this newly established central unit and its local units have a regulatory role over all Civic Society Foundations i.e associations, foundations, unions and organizations. A local unit is now established in social security departments in each governorate. The ER detailed rules related to its administrative, financial and human resources frameworks.

In addition to that, the law assigns several missions to these units:

1. making studies on vulnerable civic society foundations to terrorism-funding crimes,
2. supervising those entities, and
3. suggesting awareness programs.

The ER also stipulates the units’ obligation of having a complete database on civic society’s foundations in order to exchange it with competent authorities aiming to decrease terrorism and money laundering crimes.

 Civic Associations and Foundations’ Projects Supporting Fund - CAFPSF

The CWP law also maintained previous rules concerning the CAFPSF’s main purpose of providing financial support to ensure civic associations’ activities continuation, as follows:

1. Providing support to civic society’s foundations as well as technical, financial and administrative assistance to them.
2. Preparing and publishing an annual directory indicating the actors of civic society to enable citizens to participate in volunteer work.
3. Establishing service and productive projects, parties, charitable markets, and exhibitions to develop its resources.
4. Provide funding for civic associations, foundations and unions to implement national projects in line with the State's strategy.
5. Financing training programs to develop the administrative authority’s employees and volunteers’ skills.

New stipulations provide expressly that the fund must have an independent balance and budget. Also, it shall be exempted from all types of fees and taxes.

General and Regional Unions and federations.

• Previous rules continue to apply as the CWP Law maintained the same structure and missions. A new restriction was added: several federations for the same civic activity can not be established.
• The law maintains federations’ mission as it was:
  • leading projects establishment,
  • studies preparation,
  • development projects implementation and support,
  • organizing professional and administrative training programs,
  • representing the civic foundations before governmental entities,
  • organizing workshops and conferences.

Volunteerism provisions

It is worth mentioning that the main innovation and greatest achievement of the recent CWP Law is that volunteerism is regulated in a separate chapter. It provides for the encouragement of volunteerism, initiative spirit and social involvement in public interest activities. Accordingly, the ER has detailed volunteerism’s conditions, and insists on the mandatory written agreement between the volunteer and the foundation. In addition to that, the ER stipulates the volunteers’ rights and obligations toward the foundation, also sectors that may benefit from the volunteer work such as public, private and civic sectors.

In case of violations of these provisions, the competent unit, may take the following measures:

1. Send a written warning to the civic society foundation, including a statement of the violation attributed to it and the consequent legal procedures.
2. Give the civil society foundation fifteen days to respond and eliminate violations, if possible.
3.  In case of non-responding, or persistence of violation, the procedures stipulated in the law shall be taken.

 Penalties

Major amendments have been introduced to penalties chapter, as follows:

• the detention penalty is now abolished from all articles.
• The minimum of amendment was raised.
• Complementary penalties are stipulated such as publication of the court decision, confiscation of funds related to stipulated crimes toward CAFPSF and possible headquarter closure and activities suspension for a duration up to a year.

The ER provides templates and standard forms for internal regulations of associations, foundations, unions and federations in order to serve as guidelines to civic society’s foundations.

An entity has to only fill the standard form in order to comply with new rule of law.

Similarly, the ER has also prepared templates for all required procedures, license’s request and notifications stipulated by the CWP Law.

This blog contains general information on legal and related matters and should not be interpreted as legal advice. Fore more information please refer to our disclamer below.