The Constitution of Latvia guarantees the fundamental rights necessary for NGOs to exist and operate. In addition, Latvia adopted in 1990 a Declaration on the Accession to International Instruments relating to Human Rights regarding a number of international treaties that were ratified before independence. Subsequently, it has ratified additional international treaties regarding human rights. While there are limits to the legal guarantees under international and national law, the Latvian Constitution and law emphasise that restrictions are to be used only to the extent necessary.

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Two key laws regulate the establishment, registration, activities and termination of non-governmental organisations (NGOs) in Latvia: the Law on Public Organisations and Their Associations (Law on POs) adopted in 1992 and the Law on Non-Profit Organisations (Law on NPOs) adopted in 1991. Most non-profit, non-governmental organisations have chosen to obtain legal status as POs, due to greater ease and less expense. Latvia is in the process of developing a new framework for regulation of the section.

POs are membership organisations and NPOs are limited liability companies that undertake enterprise-oriented public service activities. The Law on POs also regulates political parties, but does not apply to trade unions and religious organisations. NPOs are subject to rules analogous to those applicable to the type of entrepreneurial activities in which they engage. Governmental oversight primarily comes from the Ministry of Justice for POs and the Enterprise Registry for NPOs.

Generally, groups may undertake any activity that is not contrary to law, as long as they are non-profit in nature and aimed to achieve goals set out in an organisation’s basic documents. Economic activities are permitted, but earned income is not a significant factor for POs due to legal limits regarding the amount of income and involvement of employees. If a PO exceeds these limits, it can be converted into a for-profit organisation. The law also limits the degree to which volunteers can make contributions to the work of an organisation.

There are no legal restrictions on NGO participation in public policy activities. Indeed, the Constitution, laws and rules of the Cabinet of Ministers encourage NGOs to engage in public policy issues and new procedures promote greater NGO involvement.

Financial sustainability is a major concern of many NGOs, many of which rely on foreign donors. Existing law provides only modest benefits and incentives for NGOs and their donors and impairs the ability of groups to develop domestic sources of support. Generally, income related to core objectives is not taxable but unrelated income is. Tax relief is available to donors if recipient organisations are on a list compiled by the Ministry of Finance, but the process by which that occurs is cumbersome at best. There are no restrictions on the receipt of grants from foreign sources. The Laws on POs and NPOs set out some requirements concerning the manner in which groups must be organised. The by-laws (for POs) and articles of incorporation (for NPOs) are the key documents within which groups must operate. Concerns about conflicts of interest receive little attention in the law, although the prohibition of the distribution of profit to persons active in organisations is made clear. Self-regulation is not addressed in law except to permit groupings of POs and NPOs.

Latvian law seeks to promote accountability primarily through reporting and other transparency measures, including meetings that are open to members, journalists and government officials. Groups that receive greater tax benefits are generally subject to increased reporting requirements. The life of a PO or NPO may be terminated through voluntary (e.g., merger or separation) or involuntary action. The latter typically occurs where there has been a serious breach of law and will require judicial approval. Voluntary termination requires the approval of members or participants. At termination, the property and other assets of an organisation are liquidated in accordance with basic organisational documents, but in some cases will go to the State for use for charitable purposes.

While current law allows NGOs to exist and to operate without undue interference, the framework is not supportive of NGO activities in a number of ways. Two draft laws are now being considered -- the draft Law on Association and Foundation and the draft Law on Public Benefit Organisations, both of which have been prepared in consultation with the NGO sector. The draft laws would address a number of concerns with the existing framework, including:

• The separation of regulation of NGOs and political parties
• A clearer delineation of NGOs into associations and foundations, and a more uniform and detailed regulatory framework
• Support and encouragement of activities of NGOs that are seen has having a public benefit through increased tax benefits
• Legitimization and support of the use of volunteers by NGOs

Analysis provided by: Patricia Armstrong, a human rights consultant based in New York.

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