EGYPT: NGOs Must Bring Their Affairs in Line with the New NGO Law by 12 October 2022


Client Alert
21 June 2022 By DR. KILIAN BÄLZ ,HUSSAM MUJALLY

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On 11th of April 2022, Egypt issued Law 23/2022, extending the grace period for NGOs to bring their affairs in line with the legal requirements under the NGO Law (Law 149/2019 on Exercising Civic Activities) by six months, ending on 12th October 2022.

The Ministry of Social Solidarity (MoSS) is empowered to renew the grace period for further six months.

International NGOs and other organizations engaged in civic activities in Egypt must obtain a license to continue their activities in Egypt at the latest by the end of the grace period.

Background

Regulating the activities of NGOs, including their funding, has been a controversial issue in Egypt, particularly since 2011.

In 2017, the Egyptian Government replaced the existing NGO Law with Law 70/2017. The latter had been met with wide-spread criticism from local and international NGOs and was criticized for being overly restrictive regarding civic activities in Egypt. The Egyptian Government responded in 2019 by revoking Law 70/2017 and enacting a new  NGO Law (Law 149/2019) in which it relaxed – to a certain degree –  Government control over civic activities, in particular, in respect of funding and compliance with financial reporting regulations.

The NGO Law grants NGOs and other entities engaged in civic activities a grace period of one year to bring their affairs in line with legal requirements in the NGO Law. The one-year period starts on the date on which the executive regulations of the NGO Law come into force (Article 2 of the Law issuing the NGO Law).

On 12th January 2021 Executive Regulations issued by virtue of Ministerial Decree 104/2021 came into force with the effect that the grace period lapsed on 12th January 2022.

Given that a significant number of NGOs had not managed to bring their affairs in line within the said period, the Egyptian Government issued Law 23/2022. Article 1 of that Law extends the grace period for six months starting from the date on which Law 23/2022 comes to force i.e. ending on 12 October 2022. Furthermore, it empowered the MoSS, NGOs’ supervisory authority, to extend the grace period for a further six months.

What does this mean for international NGOs and Companies active in Egypt?

The NGO Law also regulates foreign NGOs engaged in civic activities in Egypt. A civic activity in this sense is “any non-for-profit activity aimed at developing the society” (Article 1 [1] NGO Law). This means that the NGO Law also can apply to CSR activities of international companies.

International NGOs engaged in civic activities must apply for a license from MoSS (Article 65 NGO Law). The application must be submitted to the Egyptian Ministry of Foreign Affairs accompanied with legalized documents containing information on the following (Article 66 NGO Law in conjunction with Article 108 of the Executive Regulations):

    1. Any parent organization (including approval to pursue civic activities in the country of origin, articles of association, names and nationalities of the board of directors).
    2. The applicant (i.e. the NGO active in Egypt), including:
      • Articles of association.
      • List of activities, sources of funding, cooperation protocols or memoranda of understanding and existing projects in Egypt.
      • Approval to pursue civic activities in the country of origin.
      • Confirmation letter issued by the legal representative confirming that the applicant is not listed on any international, regional or national terrorism lists.
      • Police clearance certificate of the founding members and directors.
      • The international convention or treaty, if any, on the basis of which the applicant conducts its activities in Egypt (e.g. cultural treaties between the country of origin and the Egypt).
    3. Activities to be pursued in Egypt:
      • Proposed geographical scope.
      • Proposed period of the activities.
      • Proposed budget.
      • Proposed sources of funding.
    4. The entity which will succeed to the assets of the NGO after the expiry of its license or the revocation of the license.

The license is a fixed-term license subject to renewal. License fees will not exceed 50,000 EPG and will be increased by 20% on each renewal up to a maximum of 200,000 EPG (Article 67 NGO Law).

In general, foreign NGOs’ activities must comply with the Egyptian Government’s national development plan, and an NGO may not engage in political activity (in particular, the funding of political parties, religious activity or any activity that conflicts with national security or public morals [Article 68 NGO Law]).

International companies which cooperate with NGOs in Egypt or fund civic activities in connection with its CSR activities are not directly regulated under the NGO Law. However, the NGO Law imposes certain reporting and approval obligations on the part of the local NGO. From a compliance perspective, international companies are well advised to make sure that NGOs with whom they cooperate are in compliance with their obligations under the NGO Law.


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This client alert is a public document for informational purposes only and should not be construed as legal advice. Readers should not act upon the information provided here without consulting with professional legal counsel. This material may be considered advertising under certain rules of professional conduct. Copyright © 2022


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