INSOR Russia: Institute of Contemporary Development
Updated April 18, 2019

Public Hearings on Proposed Amendments to Civil Code

March 29, 2011

The Institute of Contemporary Development and the Commission for Development of Philanthropy and Volunteerism of the Russian Civic Chamber held public hearings on proposed amendments to parts of the Civil Code that regulate the activities of noncommercial organizations.

The amendments discussed were developed by the Council on Codification and Improvement of Civil Legislation. They propose, among other things, a number of new elements that have not been supported by the heads of noncommercial organizations or the legal community: substantial reduction of the organizational and legal formats of noncommercial organizations, including liquidation of the format of autonomous noncommercial organizations; and the introduction of a mandatory independent asset base totaling 500,000 rubles in order for noncommercial organizations to be able to undertake entrepreneurial activities.

Boris Makarenko, Director for Social and Political Development at the Institute of Contemporary Development, emphasized that it is necessary to create a system of public-private partnership and to coordinate the interests of civil society and the state. Otherwise, the country will face a “loss of initiative”. Makarenko asserted that regulation of noncommercial activities should be softer than regulation of business and said that an increase in the minimal number of members of an organization is unjustified.

It is implied in the proposed amendments that all organizations in the third sector will have to reregister. “I am afraid that this will bring about a collapse similar to the one seen with commercial organizations,” says Elena Nikolaeva, head of the Civil Chamber Commission on Social Issues and Demographic Policies. “We should keep in mind that noncommercial organizations do not have the resources to hire lawyers and spend an enormous amount of time on re-legalization.”

Artem Shadrin, deputy head of the Department of Strategic Program Management and Budgeting, supported the findings of experts and organization heads. He said that it would be “incorrect” to abolish the format of autonomous noncommercial organizations and questioned the need to increase the size of charter capital. Shadrin also indicated that he is in favor of keeping the Law on Noncommercial Organizations, which the proposed amendments to the Civil Code would make obsolete.

The draft recommendations that will be further developed based on the results of the hearings state the necessity of clearly defining criteria for declaring the activities of noncommercial organizations as “beneficial to the public”, establishment a special status for philanthropic organizations and endowment management organizations, preservation of the noncommercial partnership and autonomous noncommercial organization formats, and increasing the timeframe for making changes to charter documents. Furthermore, the participants of the hearings see a need to preserve the existing Law on Noncommercial Organizations even after amendments are made to the Civil Code.

The Institute of Contemporary Development will take part in the development of recommendations to correct the set of proposed amendments to the Civil Code and public advocacy of these recommendations.