The GOLOS Association has denied accusations put forward by the Justice Ministry that it receives funding from abroad and engages in political work, activities that would force the NGO to conform to Russia's new ‘foreign agent' law.

The Justice Ministry has opened a case against the non-profit organization GOLOS over its failure to register as a "foreign agent" operating in the territory of the Russian Federation. The Ministry said it would submit an affidavit against GOLOS on Wednesday.

"The (GOLOS) association receives funding from foreign sources,"< according to information acquired by the Federal Fiscal Monitoring Service. “At the same time, the association engages in political activity on Russian territory" in violation of Russian law, a statement on the ministry’s website announced.

Also, the Justice Ministry said the cash award that GOLOS received for winning the Sakharov Prize - named in honor of the Russian physicist Andrei Dmitrievich Sakharov (1921-1989) - awarded by Norwegian rights activists represents another incident of foreign funding.

However, GOLOS said it had returned the money and would defend itself in court.

"We'll file an appeal with the court, because GOLOS does not engage in politics,” the NGO’s deputy executive director Grigory Melkonyats told reporters on Tuesday. “Furthermore, it has not received funding from foreign sources since the ‘foreign agents’ law on non-profit organizations went into effect.”

The foreign agents bill was signed into law by President Putin in July 2012.

Melkonyats said the Justice Ministry's document mentions funds received in 2008, but, according to the agency’s head, the law “is not retroactive.”

If found guilty of violating the foreign agents law, GOLOS officials may face a 100,000 ($3,200) to 300,000 ($9,600) rouble fine.

In the past, GOLOS had received much of its funding from the United States Agency for International Development, or USAID, which had operated in Russia for two decades. That lengthy stay came to an abrupt end in September last year when the Kremlin decided the agency had overstayed its welcome. 

Then, explaining the move, Dmitry Peskov, President Putin’s press-secretary, said that the American aid agency was interfering in Russia’s political process.

The decision to end USAID’s activities in Russia came just months after the introduction of the ‘foreign agents’ law, which forces non-profit organizations receiving funding from abroad and engaging in political activity to register with the Justice Ministry as “foreign agents.”

Nongovernmental organizations are now required to file a financial report to officials every quarter.

The law instructs the Justice Ministry to prepare annual reports on nongovernmental agencies deemed as foreign agents and present it to the Lower House, including a full breakdown of their finances.

In early April, the Ministry reported that last year it had requested the closure and suspension of about 9,000 nongovernmental organizations over various violations of the law. Of that number, 21 have been suspended.

Meanwhile, as the debate over how to regulate foreign-supported NGOs rages, Vladimir Zhirinovsky, firebrand leader of the Russian Liberal Democratic Party, has called for shutting down every non-governmental organization (NGO) connected to foreigners, saying their goal is to instigate "orange" revolutions and provocations in Russia.

"We should close down every organization linked to abroad; not just check them but close them down,"Zhirinovsky told reporters on Wednesday.

“What does an NGO mean? This is a concealed form of espionage, sabotage, provocation and encouragement of "orange" revolutions," he said.

Since these organizations "are supported from abroad" they should not be tolerated, he concluded.

The Russian President, however, provided a more sober approach to nongovernmental agencies operating in Russia, explaining that they simply must obey Russian law.

“All our actions are connected not with the closures of these organizations, not with the ban, but with putting the cash flow under control,” Vladimir Putin said at a Monday press conference in Hannover.“The freedom of NGOs is not limited in any way, they just have to register.”

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