“It is unclear what NPOs in Belize have done to deserve such consideration and treatment. This flies in the face of the risk-based approach supposedly being promoted by the Bill,” the Bar Association of Belize’s April 2023 paper on the since-passed Non-Profit Organization Bill states. 

by Marco Lopez

BELIZE CITY, Thurs. Apr. 20, 2023

An opinion paper published by the Bar Association this week on the recently passed Non-Profit Organization (NPO) Bill is being viewed as belated. Yesterday, the bill was passed with amendments in the Senate, just as the released document from the Bar began circulating. The Bar’s examination of the now-passed legislation refers only to the previous iteration of the bill, which underwent amendments to several key sections. The paper looks keenly at the new offices of the NPO Registrar and Deputy Registrar, and sheds some light on some of the issues which arise from the power vested in those offices by virtue of the new legislation. 

In short, the Bar Association makes clear that in their opinion, the bill seeks to “create another bureaucracy” and simply causes more difficulty for a charitable organization to operate in Belize.

The bill, according to Senator Chris Coye, is part of a “suite” of legislation that needs to be enacted in order for the country to comply with the recommendations of the Financial Action Task Force. 

This is for the purpose of addressing “a perceived risk of terrorism financing in Belize via NPOs by empowering the NPO Registrar to create and implement a risk-based approach to profile, investigate and forfeit assets of NPOs in Belize,” the Bar’s opinion paper states. 

The NPO Registrar and the Deputy are empowered to register NPOs and regulate their activity through this new legislation. They will have to the leave to conduct onsite visits, inquiries, and investigations and apply to the Court for the appointment of a receiver to take over and manage the activities of NPOs that are found to be non-compliant. They may also apply to the court to forfeit the property of a non-compliant NPO.

But the Bar also sought to provide clarity on what types of groups and organizations could be classified as an NPO, and it found that the broad definition encompasses all churches and community organizations in Belize.   

Some of these include “The Belize Red Cross, the Scout Association of Belize, the Girl Guides Association of Belize, the Lion’s Club, the Rotary Club, Help Age Belize, Hand in Hand Ministries Belize, Lifeline Foundation Belize and the Kolbe Foundation.”

They also found that it also includes private groups of persons raising funds from the public to assist members of the community to meet nutritional needs or cover medical or educational expenses. 

“…the Days of Healing, soup kitchen, and weekend charitable barbecue activities of private persons come to mind,” the paper states. 

It adds that the definition might also extend to encompass the political parties and their community committees raising money from the public. 

The bill empowers the NPO Registrar to effect registrations and to prohibit those who do not register from soliciting funds. Not all NPOs are obliged to register, however.

“An NPO which engages in a trade to finance its charitable objects, for instance, is arguably not caught by the registration requirement because it does not solicit funds from the public nor seek to raise funds from the public, but instead earns the monies it requires for its charitable activities,” the Bar’s paper states. 

The paper stated that is it is unclear why this indirect approach to encourage registration by NPO’s is being preferred over a direct mandatory requirement. 

The bill also imposes financial reporting and auditing requirements, a requirement the Bar says is not new for Non-Profits that are also registered as NGOs, which are required to regularly disclose and verify financial records. 

The Bar makes clear that the power vested in the NPO Registrar was already conferred to the Financial Intelligence Unit (FIU) under the Money Laundering and Terrorist Prevention Act. 

“The Bill seeks largely to layer these powers and create another bureaucracy managing their exercise – one devoted exclusively to NPOs,” the Bar’s paper states. They surmised that the bill will “undoubtedly increase the labor and administrative costs” of both the government and charitable organizations, and questioned the practical need for the bill. 

“…there has not in the history of Belize ever been an allegation made against any NPO of the complicity in any money laundering or terrorist financing nor has there been any financial failure of NPOs giving rise to any need for the State to manage charitable activities,” they outlined, adding that there is no empirical evidence that there has been any risk of the type that the bill seeks to remedy in Belize, “much less to the degree required to justify legislative action abrogating the constitutional rights of charitable organizations in Belize.” 

They reminded the public in the paper that the abrogation of fundamental constitutional rights must be proportionate with the threat sought to be addressed by the abrogation for it to be regarded as reasonable. 

“It is hard to see, for instance, why the NPO Registrar would ever need to appoint a receiver to manage the business of a church in Belize, or ever need to make an application to forfeit church property in Belize?”, the paper states. 

They suggest a redefinition of NPOs may be of value, and recommended that the definition include a threshold requirement regarding the total value of funds raised from, or disbursed to the public. 

They made the point that no Basel agreements for objective standards exist for NPOs, so the tasks of objectively measuring their performance would be impractical, since no performance standards exist.

“It is therefore completely unknown what performance standards are to be maintained by NPOs before intervention by the Registrar to take over and manage the business of NPOs. The need for such supervision and powers appears fundamentally misconceived and may very well inevitably result in the violation of any of a number of fundamentally guaranteed constitutional rights of NPOs subjected to any exercise of those powers,” the Bar opines. 

The fundamental difficulty in determining the overreaching objective of the bill is noted by the Bar, since, while the Bill is said to be for the purpose of prevention of terrorist financing, “extensive powers” are conferred on the DPO Registrar “to delve into the management of the activities of NPOs without identifying any reason or objective for doing so.” 

They state, “This may lead to the arbitrary or subjective exercise of supervisory powers in relation to NPOs.”

They concluded that the supervision appears largely unnecessary and serves no purpose other than to “subject these charitable bodies to vagaries of state action.”