August 8, 2011
Anderson, Freedman, Nelson, Reiser & Kelly, and Schwabach on International Aspects of Nonprofit Law
This summer has seen several articles posted on various international aspects of nonprofit law. Here are the authors, titles, and abstracts:
This essay is a contribution to a symposium on international NGO accountability. It distinguishes between "internal" accountability for NGOs (fiduciary standards, fiscal and internal governance controls, etc.) and "external" accountability (the legitimacy with which they act in the international world, and the legitimacy which they confer upon others, and why). The essay focuses upon the latter, external accountability, and argues that the transformation of international NGOs into "global civil society" signaled an ideological move with regards to legitimacy in the global community, one which asserted claims of "representativeness" and not merely interest or expertise. The essay criticizes this legitimacy move, suggesting that it arises from mutual interests on the part of international NGOs and public international organizations such as the UN to confer legitimacy upon each other in the interest of promoting a mutually congenial form of global governance. The essay offers this account and critique in the context of a quasi-historical examination of the rise of the human rights movement as the "apex" values of the international system, with a special "legitimacy" place in that system accorded to international human rights NGOs. The essay concludes by noting that this "auto-legitimation" between international NGOs and international organizations does not lead to greater external accountability, particularly in an increasingly multipolar world.
The federal law prohibiting the provision of material support to terrorist organizations has been no stranger to controversy. From its politically charged origins through its repeated amendment after September 11, 2001, it has remained an important, but often critiqued, weapon in the government’s legal response to terrorism. The most prominent legal challenge to the law lasted over a decade. It culminated in June 2010, when the United States Supreme Court upheld the constitutionality of the law in Holder v. Humanitarian Law Project. The Court’s opinion, however, correctly recognized that important questions remain unresolved.
One such question, which this note addresses, is the application of the law to Muslim charities. Muslim charities are a complex, often misunderstood phenomenon. The use of the law against groups such as the Holy Land Foundation has achieved limited success, but has also alienated significant numbers of Muslim Americans. Civil actions against the group based on the material support law have been particularly ineffective. Likewise, criminal prosecutions have met considerable difficulty. This note explores applications of the material support statute to Muslim charities and concludes by proposing several recommendations for reform in this important area.
The area of charitable contributions under the Foreign Corrupt Practices Act (“FCPA”) is an ambiguous area of law where liability for companies can be enormous. This article examines the challenges companies face under the FCPA when making charitable contributions. It provides an in-depth analysis of the Schering-Plough case, which illustrates how the Securities and Exchange Commission (“SEC”) applies the record-keeping provisions of the FCPA in a situation of charitable giving; it examines Department of Justice (“DOJ”) FCPA Review Opinion Procedure Releases that provide guidance on when companies’ charitable contributions will violate the anti-bribery provisions of the FCPA; it discusses the effect of “compelled giving” laws, which require that foreign companies must agree to invest an established percentage of the profits from each contract into the community in which it operates; and it provides hypothetical situations illustrating the broad array of problems arising under the FCPA for companies making charitable contributions.
The article also looks at corporate social responsibility (“CSR”) in the context of FCPA enforcement. It provides hypothetical situations illustrating companies’ use of CSR to disguise acts of bribery and examines any “chilling effect” that the FCPA has on companies’ charitable giving. This discussion is especially timely in light of the natural disasters in Haiti in 2010 and Japan in 2011. Most companies do not view charitable contributions as an area of risk in their respective FCPA and anti-corruption compliance programs. The article proposes a model FCPA compliance program for charitable contributions, including the creation of a Charitable Contributions Compliance Committee, and presents a roadmap for the due diligence required to minimize liability under the FCPA when making charitable contributions.
Dana Brakman Resier (Brooklyn) and Claire Kelly (Brooklyn), Linking NGO Accountability and the Legitimacy of Global Governance
Concerns are often raised over whether international government organizations suffer from a democracy deficit, and sometimes the participation of NGOs in these entities is offered as a cure for this ill. However, to serve such an ameliorative role, perhaps NGOs need to themselves be composed and governed transparently, deliberatively, participatorily. What should be done when these goals conflict? Current domestic nonprofit law, which forms the basis for how NGOs are structured internally, attempts to create an effective and enforceable regime of nonprofit accountability. This paper asks whether these governance and accountability frameworks offered by domestic law, particularly but not exclusively in the U.S., provide sufficient content to appropriately regulate and incentivize NGOs working internationally.
In the United Kingdom, and to a lesser extent the United States, an inter vivos gift, once given, cannot be reclaimed by the giver's heirs. In civil law countries the situation is quite different: Not only spouses, but issue and in some cases even ascendants, are entitled to a forced share of a decedent's estate, and these forced shares are assessed against a notional "estate" that includes the testator's inter vivos gifts. If the total of these forced shares exceeds the amount actually available in the decedent's estate at death, the recipients of the gifts, or their successors, may be forced to make up the missing amount.
Clawbacks of this nature might have remained relatively insignificant, but last year the European Union undertook, indirectly, to expand their reach dramatically. The EU proposal, in theory, addresses only conflict of law rules; in practice, if adopted, it will threaten not only existing trusts and charitable gifts in the US and UK, but may also reduce future philanthropic giving. The UK, to date, has opted out of the proposal, and the US is not directly affected; given the large number of US and UK citizens with assets in continental Europe, however, and vice versa, it remains a concern.
The recent European Union proposal to bring about a more uniform body of law governing choice of law and related issues in international inheritance cases is, perhaps, a necessary response to the increasingly international nature of the EU's (and the world's) inhabitants and their assets. As written, though, it is rather heavily tilted toward the civil law values of continental Europe and threatens to collide jarringly with common law traditions, in particular the Anglo-American fondness for trusts and charitable giving. This article provides a look at these different traditions, and then examines the relevant inheritance law provisions of EU member states, the UK, and the US before looking at the proposal itself.
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