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Bona Fide NGOs Call For Crackdown on Abuses of Montenegro’s NGO Law
Article 25 of Montenegro's NGO law enables nongovernmental organizations to conduct income generating activities in support of their financial sustainability. In its current configuration, however, the law may be abused by cafés and small businesses seeking registration as NGOs in order to circumvent tax and other implications. Out of the 3,000 NGOs registered with the Montenegrin Ministry of Justice, upwards of 220 organizations have registered economic activities with the Republic's commercial court.
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| CRNVO and ECNL seek amendments to NGO legislation to protect legitimate income-generating activities |
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| CRNVO roundtable gathered key stakeholders to discuss proposed legislation |
As part of a year-long NGO legislation reform program funded by USAID through its implementing partner for the Montenegro Advocacy Program, American ORT, the Center for Development of NGOs (CRNVO) and the European Center for Not-For-Profit Law (ECNL) met with NGOs, Ministry of Finance representatives, and international donors in an effort to identify ways to amend the legislation, and thus prevent its abuse from eroding civic confidence in the NGO sector. Amendments to the provision would require amendments to tax legislation and ground shifts in the way the financial police and labor inspectors conduct their work.
As Stevo Muk, director of CRNVO, notes, any such amendment "should enable NGOs acting in the public interest to continue to be able to generate a part of their income by charging fees for provision of services, but should prevent non-genuine NGOs to turn a profit that distorts business competition principles."
CRNVO and ECNL propose an amendment that would allow NGOs to directly engage in economic activities, if income generated from such activities does not exceed 4,000 euro or 10% of the total income generated. In particular, the proposal differentiates the term "income" from "profit." The law would also include penalty clauses that would prohibit organizations
from engaging in economic activities within 60 days of failure to comply with its conditions.
With proper enforcement, such an amendment would force businesses masquerading as NGOs to either relinquish their NGO status or register as a legitimate enterprise. This move towards eradicating the gray economy would represent a further step in the ability of Montenegro's real
NGO sector to build genuine trust within the public it represents.
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