Volume IV, Issue II (April 2006) - Columbus School of Law

INTERNATIONAL JOURNAL OF CIVIL SOCIETY LAWVOLUME IV ISSUE 2 APRIL 20061

IJCSL EDITORIAL BOARDPaul BaterInternational Bureau of FiscalDocumentationSENIOR EDITORMaureen McCarthyMANAGING EDITORProf. Karla W. SimonCatholic University of AmericaEDITOR-IN-CHIEFDr. Leon E. IrishVisiting Prof. of LawCatholic UniversitySENIOR EDITORNasira B. RazviNEWSLETTER EDITORMalinda Baehr Kevin Schwartz Alison SheaASSOCIATE EDITOR ASSOCIATE EDITOR ASSOCIATE EDITORDonna M. SnyderEDITORIAL ASSISTANTSteven YoungREFERENCE LIBRARIANProf. Myles McGregor-LowndesProf. Susan WoodwardAUSTRALIATerrance CarterCANADADr. Petr PajasCZECH REPUBLICMichael Ernst-PörksenGERMANYRenata ArianingytasINDONESIADr. Alceste SantuariITALYCONTRIBUTING EDITORS& CONTRIBUTORSDieter HerneggerAUSTRIAProf. Debra MorrisCAYMAN ISLANDSDaniel BekeleETHIOPIAPaul Opoku-MensahGHANAZahra MaranlouIRANTatsuo OhtaJAPANDaniela Pais CostaBRAZILProf. Ge YunsongCHINAFrits HandiusROVING REPORTER, EUROPENoshir DadrawalaINDIADr. Hadara Bar-MorISRAELDr. Abdullah El-KhatibJORDANElkanah OdemboKENYABeatriz Parodi LunaPERUKarin Kuntsler GoldmanUNITED STATESPaul BaterWESTERN EUROPEBayarsetseg, J.MONGOLIAKaren NelsonSOUTH AFRICADr. Antonio ItriagoVENEZUELAQadeer BaigPAKISTANDr. Christine BarkerUNITED KINGDOMPhuoc Luong HuuVIET NAMTamuka MuzondoZIMBABWE2

Letter from the EditorDear Readers,I am writing this letter as Lee and I prepare to move our operations on May 1 to South Africa for fourmonths, followed by the move to China for the remainder of 2006. The peripatetic life is becomingsomething of a habit, and it gives ICCSL and its affiliates in Africa and Asia secure bases of action forwork in those regions. Naturally it has made the editing of this issue of IJCSL a bit more hectic thanother issues, but the articles and other items included in the April issue are truly worth all the effort.The first of these is a marvelous piece written by Andrew White, an American lawyer who has beenstudying for an LL.M. in Asian and Islamic law at the University of Melbourne. Andrew has now beenelevated to the rank of Sessional Lecturer in the Faculty of Law, and he will be presenting his paper on“The Role of the Islamic Waqf in Strengthening South Asian Civil Society: Pakistan as Case Study”at the 4 th International Society for Third Sector Research (ISTR) Conference in Bangkok in July.As you will recall, we also publish student papers in our April issue every year, and this year is noexception. We offer two excellent articles, one by Slavica Chubric, who received her LL.M. fromCentral European University in 2005 and is currently working as an intern at the European Court ofHuman Rights. Her article addresses the Freedoms of Association, Expression, and Peaceful Assemblyfor the Macedonian minority in the Balkans. The other student article was written by Barry Rickert,who is due to receive his JD degree from Pace University this May. He describes the ways in which theInternal Revenue Code treats investment advisory fees and brokerage fees, suggesting that the differencein treatment may have a less than optimal impact not only on individual investors but also on charitabletrusts.In addition to the articles we also feature a Student Note by Jason Czyz, who is finishing his first year asan evening student at Catholic University of America’s Columbus School of Law. Jason is DeputyDirector of International Programs for the National Association of Regulatory Commissions (NARUC).Jason’s contribution concerns the development of consumer associations in Bangladesh and theireffectiveness in advocating for regulatory reform.In addition to these fine articles and notes, we are also pleased to feature a Case Note by our friend andEditorial Board member from Canada – Terrance Carter – and Anne-Marie Langan, assisted by NancyE. Claridge of the Carter and Associates firm. Their piece discusses the recent case in the SupremeCourt of Canada holding that the Charter of Fundamental Rights and Freedoms requires protection forreligious practices that are outside the mainstream. In their words, the Supreme Court “has sent a strongmessage that Canada’s public education institutions must embrace diversity and develop an educationalculture respectful of the right to freedom of religion….[i]n its decision in Multani v. Commission scolaireMarguerite-Bourgeoys.This month we also are happy to report the changing of the guard on the Student Editorial Staff. Whilewe are sorry to bid farewell to Maureen, Alaina, Sarah, and Laura, we are pleased to have KevinSchwartz, Malinda Baehr, and Alison Shea joining us. This is Maureen’s last issue as Managing Editor,and we send her off with special thanks for all the hard work that job entails. Kevin will step in asManaging Editor in July.Finally, we wanted to bring to your attention the fact that this issue is the first one that we are publishingin both PDF and Word formats. We are doing the latter so as to make all the issues fully searchable onthe web. We are also creating an index so that they will be searchable in hard copy format (as they will3

appear in hard copy by the end of 2006). Many thanks go also to our webmasters Sonya and DennisHughes for helping us to achieve these important goals.As always, we would welcome your comments and suggestions. Most of all, of course, we hope that youwill enjoy reading the articles and notes that we are happy to bring to your attention every three months.Best wishes and good reading!Karla W. SimonEditor in Chief4

TABLE OF CONTENTSIJCSL EDITORIAL BOARD 2LETTER FROM THE EDITOR 3TABLE OF CONTENTS 5IJCSL EDITORIAL POLICY 6PakistanMacedoniaUnited StatesARTICLES• The Role of the Islamic Waqf inStrengthening South Asian CivilSociety: Pakistan as Case Study•STUDENT ARTICLES• International Instruments forthe Protection of the Rights ofMinorities and the Status of theMacedonian Minorities in theNeighbouring Countries•• The Differing Tax Treatment ofInvestment Advisory Fees andBrokerage Fees; A General Analysisand An Analysis in the Context ofCharitable Investments •7 Andrew White37 Slavica Chubric71 Barry RickertBangladeshSTUDENT NOTE•Building Consumer Capacity inBangladesh: USAID/NARUC Projectfor Regulatory Capacity Building•91 Jason CzyzCanadaCASE NOTES• Supreme Court Gives StrongEndorsement to Freedom of Religion•93 Terrance Carter and Anne-MarieLangan, assisted by Nancy E.Claridge5

IJCSL EDITORIAL POLICYApril 2006Dear ReaderCONTENT—IJCSL PUBLISHES ARTICLES ON A VARIETY OF TOPICS, seeking to provide avenue for an international readership to learn about and express opinions ondevelopments in law affecting civil society. These topics and the array of opinions onthem are complex and sometimes controversial. The opinions expressed do notnecessarily reflect the views of IJCSL or its editorial staff.STYLE—IJCSL PUBLISHES ARTICLES BY CONTRIBUTORS FROM AROUND THE WORLD.Therefore, IJCSL uses a flexible editorial policy regarding questions of style. Articlessubmitted by persons for whom the English language is native are edited based on theauthor's original syntax and spelling. Articles submitted by persons for whom theEnglish language is not native are edited according to American English style.Occasionally, IJCSL publishes articles in languages other than English. In thoseinstances, articles are published as submitted and IJCSL provides an English-languagesummary.QUESTIONS & COMMENTS—IJCSL WELCOMES READERS’ QUESTIONS & COMMENTSon items published in its pages. If you have a question or comment, please contactKarla W. Simon, Editor-in-ChiefMaureen McCarthy, Managing Editorsimon@cua.edu40mccarm@cua.eduIJCSL RETAINS FINAL EDITORIAL CONTROL of all aspects of publication and will sharecopyright with authors.We look forward to hearing from you.Thank you.PLEASE CITE AS4 INT. CIV. SOC. LAW at http://www.law.cua.edu/Students/Orgs/IJCSL6

ARTICLESTHE ROLE OF THE ISLAMIC WAQF IN STRENGTHENINGSOUTH ASIAN CIVIL SOCIETY: PAKISTAN AS CASE STUDYBY ANDREW WHITE *I. INTRODUCTIONCivil society -- basically the residual parts of society which fill the interstices between the Stateand the individual -- has rapidly become the faddish ‘hula hoop’ or ‘new black’ of contemporarypolitical philosophy. Much is being written and discussed by political theorists, lawyers, andgovernment policy wonks about the positive effects of a strong civil society. Benefits are toutedfor such wide-ranging priorities as democraticization and good governance, the rule of law,environmental regulation, gender equality, employment/labor rights, and poverty reduction.Although a strong civil society may not be quite the universal panacea for society’s ills that manyare seeking, it undeniably can be a powerful step in the direction of better government (moretransparency and less corruption), better wealth-distribution (greater poverty reduction), andbetter provision of public services both in place of and ancillary to services provided by the Stateto its citizens.Even more fashionable than debates centered on civil society, Islam and its various movementsand belief-systems also has arisen as an enthusiastic topic of not only theological but alsopolitical discourse, especially following the tragic events of September 11, 2001 in the UnitedStates. Motivated in no small part by the confusion and fear (perhaps bordering on paranoia)instilled in many of us in the ‘West’ by, among others, a new crop of cocktail party ‘Islamicists,’fundamentalist Christian evangelists, and the popular press, Islam generally is perceived as a darkcounterpart to all the presumed virtues of (especially Western-based) civil society. It is popularlytouted as a threat to principles of democracy and good-governance, a threat to individualfreedoms and rights (especially for women), and in many ways a threat to civil society and all ofits accomplishments.Fundamental to this juxtaposition of civil society and Islam as countervailing forces, eachfighting on the battlefield of developing nations, is not only the lack of clarity regarding theconcepts and institutions which comprise both civil society and Islam, generally, but also a lackof understanding regarding Islamic principles and institutions which historically have beenfundamental to Islam and its adherents. The central role of philanthropy and charity 1 in Islam, as* Andrew White is a sessional Lecturer in the Faculty of Law and a researcher in the Asian Law Centre atthe University of Melbourne in Australia, where he is completing LL.M. studies in Asian and Islamic lawand will commence a Ph.D. in July. He previously practiced law in the U.S. and Europe as principal in hisown law firm in North Carolina, as a senior attorney in a law firm in Germany, and as a partner in a majorinternational law firm based in Washington, D.C. The author would like to thank Prof. Mark Sidel of theUniversity of Iowa College of Law (Visiting Professor at University of Melbourne and Harvard University)for his insights and suggestions with regard to this article.1 In this paper, the term ‘philanthropy’ will be used to describe the realm of broad benevolence whichserves the public benefit, often through long-term institutional delivery of public services. ‘Charity’, on theother hand, is more narrowly defined as relief of an immediate need, such as aid to the homeless or victimsof a disaster. This will be particularly relevant in the context of zakāt and sadaqah. See, e.g., ZafarHameed Ismail and Quadeer Baig, ‘Philanthropy and Law in Pakistan’ in Mark Sidel and Iftekhar Zaman(eds), Philanthropy and Law in South Asia (2004) 245, 254. There is much confusion even in scholarly7

a dynamic part of civil society -- and particularly as historically promoted by one such institution,the Islamic trust or waqf -- is the primary focus of this article. Indeed, the waqf (pl. awqaf) hasbeen for many centuries a mainstay component of civil society in Muslim countries. Today,awqaf are enjoying a resurgence in Muslim society, both in the traditionally Muslim countries ofthe Middle East and in the Muslim-dominated countries of Asia. In these countries, the stateexpressly permits the establishment of awqaf through various enabling legislation, although italso strictly regulates and administers the creation and management of awqaf through diversebureaucratic vehicles such as government waqf administrators and boards. As an illustration ofsuch strict bureaucratic regulation, the regulatory framework in Pakistan is reviewed generally inthis article. It is suggested that especially in Pakistan -- where issues of control (and often cooption)by the government of various actors in civil society, as well as corruption and lack oftransparency within the civil society institutions themselves, are predominant concerns -- thewaqf is inherently an institution which can allay many of these concerns and, at the same time,may provide a further dividend well-beyond mere temporal concerns.II.CIVIL SOCIETY IN ASIA: DEFINITION AND CONCEPTSCivil society in Asia, as well as in the rest of the world, is not easily susceptible of definition. Itis a concept which has changed in meaning from earliest discussions by Cicero and other Romanand Greek philosophers (who, perhaps ironically, used the term to refer to the state andcivilization based on rule of law); through modernization of the concept by Thomas Paine andGeorg Hegel as a ‘domain parallel to but separate from the state’; 2 and then more recentlythrough the writings of Karl Marx (who saw civil society as ‘crass materialism’ emerging out ofcapitalism 3 ) and neo-Marxist theorist Antonio Gramsci, who championed civil society as therealm of independent and autonomous political association, holding in check the tyranny of thestate. 4 As various scholars struggle to define it, ‘the term “civil society” is an evolving and oftencontested construct whose meaning has varied in different times and places. 5One of the simplest (and perhaps most often-quoted) contemporary definitions of ‘somethingcalled civil society’ was succinctly stated by the late philosopher/sociologist Ernst Gellner in oneof the Tanner Lectures on Human Values at Harvard in 1990: ‘Civil society, in the relevantsense, is first of all that part of society which is not the state. It is a residue.’ 6 That perhaps vaguedefinition, while at first blush seemingly over-broad and too all-inclusive, is in actuality quiteaccurate. Civil society, as that term is used in contemporary political philosophy, subsumesvirtually all aspects of society in our world today, except for the state itself. Although ‘some civilsociety enthusiasts have propagated the misleading notion that civil society consists only of noblecauses and earnest, well-intentioned actors,’ civil society also has been characterized colorfully asliterature, as well as in common parlance, regarding the meaning of ‘philanthropy’ and ‘charity.’ Manysources quoted in this paper use the terms interchangeably, and every effort will be made to clarify theusage in the relevant context.2 Thomas Carothers, ‘Civil Society’ [Winter 1999-2000] Foreign Policy 18, 19.3 See, generally, Ishtiaq Ahmed, ‘Civil Society and South Asia’, Daily Times (Pakistan), 25 August 2002, at 29 June 2005.4 Not too surprising, given that Gramsci was miserably persecuted by the state, ultimately dying in prisonsolitude. See, generally, Antonio Gramsci, Selections from the Prison Notebooks (Quinton Hoare andGeoffrey Nowell Smith, eds and trans, 1971) [trans of selected texts from Quaderni del carcere].5 Errol E. Meidinger, ‘Environmental Law: Forest Certification’ (2001) 10 Buffalo Environmental LawJournal 211, 226.6 Andre Ernst Gellner, ‘The Civil and the Sacred,’ (Speech delivered at the Tanner Lectures on HumanValues, Harvard University, 20-21 March 1990) , at 07 July 2005.8

‘a bewildering array of the good, the bad, and the outright bizarre.’ 7 Indeed, as pointed out byThomas Carothers of the Carnegie Endowment for International Peace, civil society includeseveryone from the Russian mafia and militia groups from Montana to a local parent-teacherassociation. 8 Although ‘ some civil society groups may stand for “higher” – that is, non-material– principles and values, … much of civil society is preoccupied with the pursuit of private andfrequently parochial and grubby ends.’ 9On the brighter side, of course, civil society does include those groups which are struggling tocreate balance against the strong arm of the state, to achieve or maintain democracy, andotherwise to improve the quality of life for citizens within a given state or even globally. Asoptimistically described by another scholar of civil society and democracy, Larry Diamond, civilsocietyinvolves citizens acting collectively in a public sphere to express their interests,passions, and ideas, exchange information, achieve mutual goals, make demands on thestate, and hold state officials accountable. … Civil society encompasses “the ideologicalmarketplace” and the flow of information and ideas … [including] institutions belongingto the broader field of autonomous cultural and intellectual activity – universities, thinktanks, publishing houses, theaters, film production companies, and artistic networks. 10In fact, Diamond disagrees with the definition of civil society as ‘some mere residual category,synonymous with … everything that is not the state,’ 11 and he instead characterizes civil societymore heroically as having the following inherent qualities:(1) Civil society concerns itself ‘with public rather than private ends,’ distinguishing it fromother social groups, including political parties which might seek state power; 12(2) Civil society ‘relates to the state in some way but does not aim to win formal power oroffice in the state:’ instead, ‘civil society organizations seek from the state concessions, benefits,policy changes, relief, redress, or accountability’ and do not desire to ‘capture state power for thegroup per se;’ 13(3) Civil society ‘encompasses pluralism and diversity:’ in fact, Diamond goes so far as toassert that, ‘[t]o the extent that an organization – such as a religious fundamentalist, ethnicchauvinist, revolutionary, or millenarian movement – seeks to monopolize a functional orpolitical space in society, claiming that it represents the only legitimate path, it contradicts thepluralistic and market-oriented nature of civil society;’ 14 and(4) Civil society is distinguished by its ‘partialness,’ such that ‘no group in civil societyseeks to represent the whole of a person’s or community’s interests. Rather, different groupsrepresent different interests.’ 157 Carothers, above n 2, 20.8 Ibid.9 Ibid 21.10 Larry Diamond, ‘Toward Democratic Consolidation’ in Larry Diamond and Mark F. Plattner (eds), TheGlobal Resurgence of Democracy (1996) 228-229.11 Ibid 229.12 Ibid.13 Ibid.14 Ibid 229-230.15 Ibid 230.9

In the Asian context, particularly, there has been added to the mix of defining what is and what isnot civil society the further debate of whether civil society is a purely ‘Western’ concept thatsimply is alien to Asian cultures. While the multifarious arguments contributed by varioustheorists to this ‘Asian debate’ are beyond the scope of this article, it appears that -- regardless ofwhichever abstract historical, political, or cultural theories one proffers -- the contemporaryreality is that there is a strong and thriving civil society today in Asia. Indeed, in a recent andextensive study of Asian civil society, 16 the authors provide ample evidence of both the presenceand dramatic growth of civil society organizations in Asia, especially during the past twodecades, even though ‘their breadth, depth, and density have varied over time and acrosscountries.’ 17As with civil society elsewhere, civil society in Asia is ‘social-reality-specific.’ 18 That is, civilsociety in Asian countries has developed in response to numerous and varied factors, rangingfrom colonial domination and subsequent authoritarian governments, to the growth of capitalismand democratic transition, to increased international support and even increased domesticgovernment support. 19 In his extensive survey of the nature and development of Asian civilsociety, Mutiah Alagappa further particularizes these factors asanticolonial mobilization, weakness of states, resistance to repressive rule, governmentsponsorship of organizations, increase in democratic space, economic growth anddevelopment, the information and communication revolutions, change in internationalnormative structure, and growing international support. 20Owing in part to these varied factors which have spurred their development and growth, civilsociety organizations in Asia are ‘highly diverse in composition, resource endowment, andgoals.’ 21 There is a wide range of actors in Asian civil society, existing in virtually every aspectof Asian life, employment, and government – with an accompanying wide range of politicalorientation. 22 As a result, as noted by Alagappa, ‘struggle [is] a central feature of Asian civilsocieties,’ caused by the inequalities and wide disparities among these organizations, especiallyas catalyzed by the ‘totalizing goals’ of some civil society organizations. 23 Especially in Asia,certain civil society organizations ‘view civil society as a terrain for waging their battles againstother segments of society and against the state.’ 24Inherent legal/regulatory constraints by the state, as illustrated by the regulatory framework forawqaf in Pakistan discussed later in this article, also characterize civil society in Asia. Alagappa,for example, observes that16 Mutiah Alagappa (ed), Civil Society and Political Change in Asia (2004).17 Mutiah Alagappa, ‘The Nonstate Public Sphere in Asia’ in Mutiah Alagappa (ed), Civil Society andPolitical Change in Asia (2004) 457.18 Ibid 456.19 Ibid 456-57.20 Ibid 459.21 Ibid 464.22 Ibid 465.23 Ibid. Alagappa carefully cautions against treating Asian civil societies as a single, coherent entity -- oreven a homogenous or static group – and he does note that in some areas the ‘zero-sum struggles give wayto competition, cooperation, and compromise’: at 467.24 Ibid 465.10

[a]lthough civil society organizations have become more numerous and consequential inpolitics … the institutionalism of the realm of civil society as a legally protected spacefor autonomous organization and site for critical reflection, discourse, and governancethat is independent of the state has made comparatively less headway in Asiancountries. 25Many Asian countries do provide constitutional guarantees of the right to free association andpolitical expression. Further, in many Asian countries, the legal frameworks do expressly supportthe formation and activity of civil society organizations. Factors such as political expediency bygovernments, inadequacy and corruption in the legal system, and such nebulous (and self-serving)concepts as ‘security interests’ and ‘public order,’ however, do severely constrain the activities ofcivil society organizations in Asia. In South Asia, for instance, governments have taken a‘dominant interventionist role … [taking upon themselves] a pre-eminent and monopolisticstance’ in defining these and other related concepts. 26In some Asian countries, such as Pakistan, these factors are even more exacerbated by ‘anambiguous [legal and regulatory] framework that is made worse by the high discretion accordedgovernment officials and their arbitrary application of laws.’ 27 Consequently, while civil societyorganizations in Asia are numerous -- Pakistan, for example, officially listed about 45,000 active,non-profit organizations operating in 2002 28 -- many prefer to be off the bureaucratic radar of thegovernment. Alagappa estimates that, especially in authoritarian and communist countries, thenumbers of civil society organizations may be dramatically higher: many civil societyorganizations avoid registration with the government or otherwise circumvent governmentregulations by registering as businesses or companies. 29III.ISLAM AS A STRONG FORCE FOR BUILDING CIVIL SOCIETYIt is against the backdrop of struggle and government constraints to the development of civilsociety in Asia that Islamic institutions, such as awqaf, could be influential. Especially in SouthAsia, religion and religious practices play a crucial role in the development of nonprofit legalsystems. 30 Indeed, recent scholarship in the field has refocused extensive attention on thereligious roots and the influences of religion on the nonprofit world in South Asia. 31 And inIslamic countries such as Pakistan, of course, Islam is a powerful socio-political force.Interestingly, scholars in the field of civil society also have found themselves at odds over theissue of whether Islam is compatible with or in opposition to civil society. 32 While such25 Ibid 470.26 Rajesh Tandon, Voluntary Action, Civil Society and the State (2002) 70.27 Alagappa, above n 17, 474.28 Ibid 457.29 Ibid 458. As explained by Barnett Baron in his Opening Remarks for a Workshop Held at the CatholicUniversity of America, April 12, 2002, ‘nonprofit organizations throughout the [Asian] region are generallymore heavily regulated than commercial firms.’ Barnett F. Baron, ‘The Legal Framework for Civil Societyin East and Southeast Asia’ (2002) 4(4) The International Journal of Not-for-Profit Law, 7 at 19 July 2005.30 Mark Sidel and Iftekhar Zaman, ‘Philanthropy and Law in South Asia: Key Themes and Key Choices’ inMark Sidel and Iftekhar Zaman (eds), Philanthropy and Law in South Asia (2004) 15, 19-20.31 Ibid 20.32 This debate, of course, is premised upon a somewhat narrow definition of civil society, and fails to takeinto account the broader definition which literally includes all non-state associational life, such as Islamicand other religious associations.11

prominent scholars as Ernst Gellner and Samuel Huntington have portrayed Islam as an ‘enemyof liberal democracy and civil society,’ others (including scholars of Islamic civil society such asElisabeth Özdalga and Suna Persson) have expressed their view of contemporary Islamicmovements as ‘modern propellants of civil society by serving to challenge the authoritarianstates of the Muslim world.’ 33 Ironically, both positions share a common foundationalassumption -- that is, that Islamic movements are invariably at odds with the secular nation-state:Islam’s role in either propelling or undermining civil society is largely assumed to occur througha struggle with the secular state … [and] the post-September 11 climate has reinforced thepredominant assumptions of clash, hostility and distrust as essential qualities of the Islamicrevival. 34Unfortunately, much of the juxtaposition between Islam, the state, and civil society -- especially‘a rich variety of state-Islam interaction, ranging from contestation and negotiation to cooperationand collusion’ -- appears to be the subject of limited (and only relatively recent)research and scholarship. 35 Moreover, much of the argument of incompatibility between Islamand civil society also appears not only to be a product of the relatively limited scholarship in thisarea but also relatively limited understanding of Islam as a powerfully public (as opposed to apurely private, inward-looking) religion. 36 Indeed, Islam is a religion which incentivizes literallyevery aspect of its adherents’ lives, ranging from purely spiritual matters to legal and socialrelationships.A. Philanthropy and Charity in IslamIt is important to realize that Islam has a very rich and extensive heritage of civil society,particularly through various philanthropic and charitable institutions. These institutions havebeen a fundamental part of Islam since its very inception. Mosques, universities, museums,libraries and other cultural treasures are the direct result of extensive private philanthropy.Nonstate philanthropy in Islamic society also has funded and otherwise assisted in providingeven more diverse, less well-known -- and often informal -- public services and other benefits tothe poor. These have included soup kitchens, hospitals, public fountains, and even scholarshipfunds and other education schemes. 37 Importantly, Islamic philanthropy traditionally has sought33 Berna Turam, ‘The politics of engagement between Islam and the secular state: ambivalences of “civilsociety”’ (2004) 55(2) The British Journal of Sociology 259, 260.34 Ibid 260.35 Ibid 263-64. Dr. Turam agrees that this area ‘has been left understudied, if not ignored, with regard tocivil society’ -- although she does reference several key works as ‘exceptions’ to her statement.36 An analysis of ‘public’ Islam and other similar religions (such as Catholicism) is outside the scope of thispaper. There is relatively limited scholarship on this issue, but a fascinating discussion is presented in JoseCasanova, ‘Civil Society and Religion: Retrospective Reflections on Catholicism and ProspectiveReflections on Islam’ [Winter 2001] 68(4) Social Research 1041 at 11 July 2005. ProfessorCasanova compares ‘various forms of public civil Islam’ with Catholicism, as a strong force fordemocratization, and further, challenges Samuel Huntington’s thesis that ‘the public mobilization of Islamis unlikely to be conducive to democracy and the emergence of civil society.’37 Jennifer Bremer, ‘Islamic Philanthropy: Reviving Traditional Forms for Building Social Justice’ (Paperpresented at Fifth Annual Conference on ‘Defining and Establishing Justice in Muslim Societies,’ Centerfor the Study of Islam and Democracy, Washington DC, 28-29 May 2004) 5 at 18 June 2005.12

to integrate economic development and social services into philanthropic and charitableactivities, more so than even in the philanthropic traditions of Anglo-European society. 38 Indeed,‘[t]he emerging literature on Islamic charities … documents the highly evolutionarynature of these important social institutions, their interaction with political, economic,and social affairs in the societies that have created them, and the diverse roles they haveplayed in building these societies, responding to their needs, and providing opportunitiesfor voice and dissent.’ 39Even though much of the institutional philanthropic structure which flourished during more thana thousand years of Islam suffered substantially throughout the past two centuries of colonialinterests, repressive and authoritarian governments, and the overall tensions between state andcivil society occurring in most of the Muslim-dominated world, the core Islamic values ofphilanthropy and charity continued unchanged.The relative immutability of these core philanthropic and charitable values in Islamic society,despite the vagaries of various socio-political power structures throughout the Islamic world,derives from their place as one of the Five Pillars of Islam -- the defining and inviolate structureupon which Islam stands. 40 The Qur'ān admonishes Muslims to be charitable, to ‘spend out ofwhat We have given them.” 41 Hadīth 42 -- such as, ‘On every bone of the fingers charity isincumbent everyday’ -- implore Muslims to charity. 43 And charity is broadly interpreted:spending out of whatever has been given to man, stands for charity in a broad sense, i.e.,for all acts of benevolence and doing good to humanity in general. For what God hasgiven to man is not only the wealth which he possesses but all the faculties and powerswith which he has been gifted. 44As Professor Azim Nanji, a leading contemporary scholar of Islamic philanthropy, furtherexplains,[c]ompassion, social justice, sharing and strengthening – all these are encompassed inthe Quranic articulation of the ethical concept of charitable giving. This ethic aims notonly to correct social ills but also to reflect the moral and spiritual value attached to theuse of wealth, resources and effort for the welfare of individuals and communities. 4538 Ibid 7 n 4.39 Ibid 7.40 Summarized, the ‘Five Pillars’ are belief in God as the one true God; dutiful prayer; the obligation ofcharity; Hajj/ pilgrimage to Mecca; and fasting during Ramadān. Some Muslims consider jihād to be asixth pillar. The ‘Five Pillars’ is essentially a Sunni term. For Shi’a Muslims, these beliefs and practicesare subsumed within the Usool-ad-deen (Roots of Religion) and Furoo-ad-Deen (Branches of Religion).See, generally, at 22 June 2005; at 22 June 2005.41 The Majestic Qur'ān: An English Rendition of its Meanings (Translation Committee, Nawawi Foundationtrans, 2000 ed) [2:3].42 Generally, the traditions, teachings and stories transmitted on the authority of the prophet Muhammad --his deeds, sayings, even tacit approval -- accepted as a source of Islamic doctrine and law. See, generally,MSA-USC, ‘Sunnah and Hadith’ < http://www.usc.edu/dept/MSA/fundamentals/hadithsunnah/> at 12 July2005, quoting from Muhammad Mustafa Azami, Studies in Hadith Methodology and Literature (1977).43 Maulānā Muhammad ‘Alī, A Manual of Hadīth (2 nd ed 2001) 171 [2].44 Maulānā Muhammad ‘Alī, The Religion of Islām (1990) 339.45 Azim Nanji, ‘Charitable giving in Islam’ (2000) 5(1) Alliance 1 at 21 June 2005.13

In essence, because Muslims believe that they are merely trustees of the wealth and propertywhich they may ultimately be given by God, ‘[t]hey are thus accountable for the ways they usetheir resources and wealth, and they earn religious merit by utilizing them in a socially beneficialway.’ 46 Indeed, the Qur'ān condemns those who ‘hoard up that which Allah has bestowed uponthem of His bounty’ 47 and extols ‘[t]hose that give charity, be they men or women … [They] willbe repaid manifold. They will receive a generous reward.’ 48The discussion above is a brief summary of religious basis for Islamic charity and philanthropy.How these beliefs and requirements are actually worked out in practice – in the struggles in theIslamic world – is the focus of the remaining sections of this article.B. Islamic Principles and Practices of Philanthropic and Charitable GivingPhilanthropic and charitable giving in Islam manifests itself in two primary practices. The firstof these is a compulsory donation known as zakāt. Loosely analogous to the less formalobligation of tithing practiced in Christian churches, zakāt is generally defined as obligatoryalmsgiving (that is, for the benefit of the poor) by every Muslim. 49 Essentially, zakāt is a ‘chargeon accumulated wealth, and is intended to do away with the inequalities of Capitalism. Wealthhas a tendency to accumulate, and zakāt aims at its partial redistribution in such a manner thatthe community, as a whole, may derive advantage from it.’ 50Traditionally, zakāt has been levied at a rate of 2.5% of income and other wealth generated byone’s resources (after meeting basic family obligations), with the exception of zakāt on animalswhich was levied according to a complex set of rules. 51 Moreover, zakāt is to be collected anddistributed as public money by the state or, where a non-Muslim government is not able orwilling to undertake collection and distribution of zakāt, then by the Muslim community itself. 52Importantly, zakāt ‘must take the shape of a national Muslim institution in every country wherethere is a Muslim population.’ 53 Indeed, when the prophet Muhammad established hisgovernment, ‘he made zakāt a state institution, appointing officials to collect it and directing hisgovernors to do the same in distant provinces.’ 54Whereas zakāt is obligatory, the second type of Islamic philanthropic and charitable practice,known generally as sadaqah, can well be described as ‘supererogatory – beyond the demands of46 Ibid 1.47 The Majestic Qur'ān: An English Rendition of its Meanings, above n 41, [3:180].48 The Majestic Qur'ān: An English Rendition of its Meanings, above n 41, [57:18].49 See, e.g., Azim Nanji, above n 45, 2.50 Maulānā Muhammad ‘Alī, above n 44, 350. There also is authority that, because zakāt is collected bythe government or community, a portion of zakāt collected may be used for defraying the costs of itscollection and distribution. In addition, while zakāt is to be used primarily for aiding the poor, there isauthority that zakāt may be used for the ‘defence and advancement of the Muslim community as a whole’ -- the fi sabīli-llā (‘in the way of Allah’), meaning ‘warriors defending the faith’: at 352-53.51 Zakāt on camels, for example, was ‘one goat for five camels, and after that, one for each five or part offive, up to 24. When the number reached 25, a young she-camel, one year old sufficed up to 34 … [and soforth].’ Maulānā Muhammad ‘Alī, above n 44, 349 n 20. In addition, traditions provide that zakāt be paidby a woman out of her ornaments, by a trader on his goods, and even the property of an orphan. MaulānāMuhammad ‘Alī, above n 43, 170.52 Ibid 169-70.53 Maulānā Muhammad ‘Alī, above n 44, 350-51.54 Ibid 347.14

duty.’ 55 In contrast to zakāt, sadaqah is voluntary giving for unrestricted purposes. 56 In theQur'ān, the terms ‘sadaqah’ and ‘zakāt’ are often used interchangeably. Analogous to zakāt,sadaqah is also interpreted as obligatory upon Muslims, albeit through moral imperative only. 57Traditionally, while sadaqah includes philanthropy in its broadest sense, sadaqah more oftensignifies charity -- through ‘good deeds’ and non-material gifts of voluntary effort. 58Unlike zakāt, which is more like a public tax, sadaqah is often a more discreet act of charity.Hadīth praises a man’s discretion in giving charity, ‘where the left hand does not know what theright spends’ 59 . In addition, even the slightest charitable act or ‘refrain from doing evil to anyone’ 60 is sadaqah. Examples in Hadīth abound with such diversity as a salutation to people,feeding oneself, feeding one’s wife or children, and or simply saying a good word. 61 As theseexamples also demonstrate, sadaqah -- unlike zakāt -- is unrestricted as to its recipients. It neednot be given, for instance, only to the poor or used for the defence and advancement of theMuslim community. Indeed, it is directed to the public at large, Muslim as well as non-Muslim.IV.THE WAQF: A DYNAMIC INSTITUTION PROMOTING ISLAMIC CIVIL SOCIETYGiven the paramount importance placed upon philanthropy and charity in Islam, formalizedinstitutions evolved in order to facilitate the practices of zakāt and sadaqah. As Azim Nanjiexplains, ‘[w]ith the growth of the Muslim Umma in Medina, procedures for the collection anddistribution of sadaqa and zakat were elaborated with the interconnected and evolving political,moral and social order.’ 62 By the time of the prophet Muhammad’s death in 632 CE, ‘aframework of practices governing the collection and distribution of the sadaqa and zakatcontributions had already developed.’ 63 Out of this ‘Prophetic precedent’ there arose otherformal institutions for voluntary charity and philanthropy, as well as for the collection of zakātby the government or Islamic community. 64 Most significant among these today are the zakātfund and the waqf. The zakāt fund, especially as a privately-managed institution (and the evenmore-innovative local zakat-funded development organization), is a relatively new, somewhatuntested innovation in the Muslim world. The waqf, on the other hand, is a much older and moreestablished philanthropic vehicle in Islam.The zakāt fund, an outgrowth from the mandatory system of zakāt collection and distribution byMuslim governments and communities, collects and aggregates funds from many differentindividuals for charitable purposes. These funds are then disbursed directly to needy individualsor are used to deliver necessary social services, either directly by organizations established andoperated by the zakāt fund itself or through nonprofit organizations that deliver services to the55 Azim Nanji, above n 45, 3.56 See, generally, Azim Nanji, above n 45, 2; Bremer, above n 37, 8.57 See, e.g., Azim Nanji, above n 45, 2; Maulānā Muhammad ‘Alī, above n 44, 340-41; MaulānāMuhammad ‘Alī, above n 43, 169.58 See, generally, Maulānā Muhammad ‘Alī, above n 44, 340-41; Zafar Hameed Ismail and Quadeer Baig,above n 1, 254.59 Maulānā Muhammad ‘Alī, above n 43, 173 [7].60 Maulānā Muhammad ‘Alī, above n 44, 341.61 Ibid.62 Azim Nanji, above n 45, 3. Nanji notes that Clifford Geertz and other Western scholars of Muslimcivilization have observed, generally, that ‘the interconnectedness of “the right” and “the real” is a constantin all aspects of the application of Islamic ideals to society.’ Ibid.63 Ibid.64 Ibid 4.15

poor or provide other social services. 65 Zakāt funds are established by governments (the moretraditional model), by banks, or by similar funds-management institutions. As mentioned above,non-governmental zakāt fund institutions appear to be a relatively recent development in Islamiccharity. Dubai Islamic Bank, for example, claims that it established the ‘first’ Islamic ZakātFund in 1975, ‘as a pioneering initiative by Dubai Islamic Bank, as part of its belief in fulfillingthe Zakat obligation imposed by God.’ 66 Moreover, although evidence of this is ‘anecdotalrather than the result of in-depth study of zakat institutions,’ there may be emerging a variety ofnew models. 67 This includes such cross-border innovations as the recently-announced jointventure between Dubai eGovernment and the Zakat Fund in Abu Dhabi. 68 Interestingly, whileapparently they have not been studied enough yet to reach any concrete conclusions as to whythese zakāt funds may be growing in popularity, it may reflectthe opening of Islamic societies to more pluralistic and democratic approaches; theemergence of a new and powerful Muslim middle class in the United States, Europe,South Asia, Southeast Asia, and even in the Middle East; and the increasinglyinternational nature of relationships within the Islamic world. 69In contrast to the contemporary zakāt fund, the ‘idea of the waqf is as old as humanity.’ 70 Formillennia, societies have established temples and other places of religious worship, as well asproperties exclusively dedicated as monasteries, schools, and libraries. Some scholars argue thatthe modern form of the waqf derives from Byzantine practice and, in the Abrahamaic tradition,Abraham is regarded as the founder of the first waqf in establishing endowed temples. 71Professor Timur Kuran elaborates in an in-depth study of the origins and development of thewaqf:The institution did not have to be developed from scratch because various ancientpeoples – Persians, Egyptians, Turks, Jews, Byzantines, Romans, and others – haddeveloped similar structures. Just as Islam itself did not emerge in a historical vacuum,so the first founders of Islamic trusts and the jurists who shaped the pertinent regulationsalmost certainly drew inspiration from models already present around them. 72In turn, the waqf not only established itself as a ‘defining feature of Islamic civilization … [but] itwent on to become a source of cross-civilizational emulation.’ 73 Scholars credit the waqf withhaving influenced the development of trusts in Western Europe -- most notably the establishment65 Bremer, above n 37, 8.66 Dubai Islamic Bank website at 12 July 2005: ‘Thebank set up the Zakat Fund to channelise the zakat from the bank funds, such as reserve amounts and theforwarded profits. The Fund also collects the zakat of those clients who wish the bank to distribute it ontheir behalf.’67 Bremer, above n 37, 11.68 ‘Dubai eGovernment joins hands with Zakat Fund’, AME Info FZ LLC (United Arab Emirates), 21March 2005, < http://www.ameinfo.com/56214.html> at 12 July 2005.69 Bremer, above n 37, 11.70 Monzer Kahf, ‘Waqf and its sociopolitical aspects’ (1992) [published by Islamic Research and TrainingInstitute (IRTI) of the Islamic Development Bank (IDB), Jeddah, Saudi Arabia] at 20 June 2005.71 Bremer, above n 37, 9, citing John Robert Barnes, An Introduction to Religious Foundations in theOttoman Empire (1987) 5-6, 12-15.72 Timur Kuran, ‘The Provision of Public Goods under Islamic Law: Origins, Impact, and Limitations ofthe Waqf System’ (2001) 35 Law and Society Review 841, 848.73 Ibid.16

of such venerable educational institutions as the University of Oxford and Merton College 74 --‘where the institution of the trust emerged only in the 13 th century, a half millennium after itstruck roots in the Islamic Middle East.’ 75Interestingly, the institutional structure of the waqf has remained relatively uniform throughoutmost of its history. The basic elements are:(1) A declaration of the waqf made by the legal owner of property – usually made inwriting, according to a form supplied by a notary, although oral forms appear to havebeen acceptable,(2) that he is immobilizing that property in perpetuity,(3) for a particular purpose,(4) to be managed according to certain criteria and priorities established by the founder,(5) for the benefit of a selected class of beneficiaries, and(6) designating a mutawalli (essentially the trustee) to manage the waqf, and prescribingthe appointment of successor mutawallis;(7) any employees, if necessary, hired and managed by the mutawalli;(8) a fiduciary duty on the part of the mutawalli to manage the waqf according to thefounder’s declaration and in the interests of the beneficiaries, and(9) judicial oversight of the mutawalli’s appointment and activities by a local judge. 76Over time, one more crucial element could be said to be added to this list: the role of the state.Especially in more modern times, as discussed further below, the state has exerted considerablepressure on judges and mutawallis, and has heavily regulated the creation and operation of thewaqf. But otherwise -- even though the rules for forming awqaf somewhat ‘have varied acrossregions, time, and the schools of Islamic law’ 77 -- the institutional structure of the waqf has notchanged.Within this structural framework, traditional awqaf may be categorized into three types: thereligious waqf, the philanthropic waqf, and the family (or posterity) waqf. Religious awqafestablish mosques and provide revenues for the maintenance and operation of mosques. InIslamic history, ‘the first religious waqf is the mosque of Quba’ in Madinah … which was builtupon the arrival of the Prophet Muhammad in 622 … [and which still] stands now on the samesite with a new and enlarged structure.’ 78Philanthropic awqaf are broader in their scope than merely religious awqaf: they are establishedfor the benefit of the poor, as well as for wide-ranging public interests such as basic socialservices, education, health care, libraries, roads and bridges, and parks -- and even for the care ofanimals. Islamic jurists credit the prophet Muhammad with creating the first philanthropic waqf:according to Tradition, the Prophet inherited by Will seven orchards, which he made into a74 See, e.g., Monica M. Gaudiosi, ‘The Influence of the Islamic Law of Waqf on the Development of theTrust in England: The Case of Merton College’ (1988) 136 University of Pennsylvania Law Review 1231;AbdulHasan M. Sadeq, ‘Waqf, perpetual charity and poverty alleviation’ (2002) 29 (1/2) InternationalJournal of Social Economics 135, citing at 139, Gaudiosi and M. Cizakca, ‘Awqaf in history andimplications for modern Islamic economics’ (Paper presented at the International Conference on Awqaf andEconomic Development, Kuala Lumpur, 2-4 March 1998).75 Kuran, above n 72, 848.76 See, generally, Kuran, above n 72, 861.77 Ibid.78 Kahf, above n 70, 3.17

charitable waqf for the benefit of the poor. 79 A Hadīth also speaks of the prophet Muhammaddirecting his Companion (and second successor to the caliphate) to establish a waqf, and sets forthclearly many of the conditions of this form of charity:Ibn ‘Umar reported, ‘Umar ibn al-Khattāb got land in Khaibar; so he came to theProphet, peace and blessings of Allah be on him, to consult him about it. He said, OMessenger of Allāh! I have got land in Khaibar than which I have never obtained morevaluable property; what dost thou advise about it? He said: “If thou likest, make aproperty itself to remain inalienable, and give (the profit from) it in charity.” So ‘Umarmade it a charity on the condition that it shall not be sold, nor given away, nor inherited,and made it a charity among the needy and the relatives and to set free slaves and in theway of Allāh … 80According to Tradition, after making the above-described waqf, ‘Umar decided to declare it inwriting and he invited some of the Prophet’s Companions to attest the document. According toJaber, one of the Companions, when word got around of what ‘Umar was doing, other real estateowner’s starting creating their own awqaf. Supposedly, some of them not only created awqaf forthe benefit of the needy, but also included a condition that their own children and descendantsshould have priority to the waqf revenues, with only the surplus going to benefit the poor. 81 Thiswas apparently the genesis of the third type of waqf, the family or posterity waqf. Soon, Islamicjurists rested authority for this type of waqf institution on sayings attributed to the prophetMuhammad -- such as, ‘It is better to leave your heirs rich than to leave them destitute, beggingfrom others’ and ‘One’s family and descendents are fitting objects of charity … To bestow onthem and to provide for their future subsistence is more pious and obtains greater reward than tobestow on the indigent stranger.’ 82 Indeed, a Hadīth reports that, at the express recommendationof the Prophet, a certain Abu Talha created a waqf of his expansive date-palm garden from whichthe wealth was to be disributed among his relatives. 83Of the three types of awqaf, the family waqf was the most troubling to most rulers of Islamic andpredominantly-Islamic states. 84 Unlike the religious and purely philanthropic awqaf, the familywaqf usually added little in the way of social services, 85 yet it took away part of the state’s taxbase and protected properties from confiscation in times of fiscal emergency. As such, rulerssought to curb the creation of family awqaf by their Muslim subjects. Particularly in Islamicstates, however, they also had to walk a fine line between discouraging certain awqaf and79 Ibid; Monzer Kahf, ‘Waqf: A Quick Overview’ [undated, unpublished paper] < http://monzer.kahf.com/papers/english/WAQF,%20A%20QUICK%20OVERVIEW.pdf > at 20 June 2005.80 Maulānā Muhammad ‘Alī, above n 43, 275 [14].81 Kahf, above n 70, 4.82 See, e.g., Kuran, above n 72, 855; David S. Powers, ‘The Islamic Family Endowment (Waqf)’ (1999) 32Vanderbilt Journal of Transnational Law 1167, 1176; Jeffrey A. Schoenblum, ‘The Role of Legal Doctrinein the Decline of the Islamic Waqf: A Comparison with the Trust’ (1999) 32 Vanderbilt Journal ofTransnational Law 1191, 1207-8.83 Muhammad Ismâ'îl al-Bukhârî, Hadīth 4:30 < http://www.sacredtexts.com/isl/bukhari/bh4/bh4_29.htm>;see also, Maulānā Muhammad ‘Alī, above n 44, 516.84 More recent governments have shared these concerns, for various reasons, including for example theBritish Raj in South Asia which declared invalid family awqaf and, subsequently re-validated them, andthen placed regulatory strictures on them. See discussion, below, pp. 25-26.85 It should be noted that, owing to the social norms of the time, even family awqaf apparently did deliversome social service: one empirical study of Ottoman awqaf shows that only 7% of awqaf registered duringthe 18 th century did not provide any service outside the founder’s family; as many as 75% were familyawqaf that also served non-family interests, and the remaining 18% were strictly charitable awqaf. Kuran,above n 72, 858.18

avoiding the appearance of impiety, the latter of which might weaken the ruler’s legitimacy orauthority. Ironically, the same ruling elite who sought to curb the establishment of family awqafalso needed to tread somewhat lightly because of their own interests in sheltering property inawqaf. The ruling elite -- be they the political leadership, bureaucrats, military officials, judgesor clerics -- were also the predominant land owners and those who had the most wealth. Often,they were vulnerable to loss of political power and, with that, having their assets confiscated.Accordingly, ‘[m]embers of the ruling class established family waqfs as a means of ensuring theirfamilies against loss of political influence and earning capacity. Over the centuries, countlessoverconfident state officials who failed to take this precaution in a timely manner saw their assetsexpropriated and their families driven into poverty.’ 86 Especially as options for shelteringproperty were quite limited in early Islamic societies, therefore, it was in their own best intereststo preserve the institution of the family waqf.Traditionally, all three types of waqf enjoyed enormous growth and popularity 87 -- at least untilmodern governments, as well, began to see the waqf as a threat to their absolute power andcontrol of society, and began seizing, nationalizing, replacing with state-run substitutes, oraltogether closing down awqaf and other forms of Islamic philanthropy and charity. 88Throughout Islamic history, a remarkably large proportion of lands were dedicated as waqf landsand the awqaf were responsible for much of what comprised the classical Islamic city and society.Typically, dedicated waqf properties would include ‘a mosque, a mausoleum for the founder, amadrasa (Islamic school), and commercial complexes such as a hostel for traveling traders or acovered bazaar, to generate income for the social services and religious facilities,’ and even‘housing owned by the waqf, also rented for income, as well as other social service facilities, suchas a hospital, public water fountain, soup kitchen, or orphanage.’ 89 Various studies indicate thatfully three-fourths of the lands consisting of the Ottoman Empire were established as waqf lands;in the mid-19 th century, waqf ‘agricultural land constituted half of the size of land in Algeria’ andone-third in Tunisia; and even in the mid-20 th century, one-eighth in Egypt. 90 Today, more than8,000 educational institutions and more than 123,000 mosques in Bangladesh alone are waqfinstitutions. 91 A University in Karachi is financed by a waqf. 92 A large shopping complex inDakha is a waqf, providing employment to a large number of people and even financing apublication house, a large auditorium, and a mosque. 93These and other innumerable examples underscore the preeminent role of the waqf in Islamiccivil society throughout history. The waqf connected together all segments of Islamic society,86 Ibid 857.87 The various reasons for this tremendous popularity are outside the scope of this paper, but it should benoted that -- not unlike the motives of many modern Western benefactors -- they include more than merealtruistic zeal: founders of awqaf were often motivated by the desire to enhance their reputations for piety,generally enhance their status in the community, spread political and religious ideology, shelter wealthfrom opportunistic taxation and government confiscation, ‘launder assets,’ and to preserve pre-Islamicinheritance customs. For a thorough discussion of these motives, see, e.g., Kuran, above n 72, 842-843,853-861.88 Bremer, above n 37, 12.89 Ibid 10.90 Sadeq, above n 74, 140.91 Ibid 140-41.92 Ibid 141.93 Ibid.19

even the poor and humble with the rich and influential. 94 Moreover, while each individualestablishing a waqf had his or her 95 own reasons for doing so -- be they altruistic or for thepreservation of family wealth -- one overriding reason for the waqf’s preeminence in Islamicsociety, and that which distinguished the waqf from many types of Anglo-European trusts andstrengthened it as an integral part of civil society, was the waqf’s perpetuity. 96 In Arabic,‘waqafa’ means ‘he was still’ or ‘stationary’. 97 Waqf property is locked-up forever, as anirrevocable gift to God, for the ultimate good of mankind. 98The element of perpetuity -- both in the sense of duration as well as the repeated flow of itsbenefits -- has positive economic benefits for society, especially that part of civil societyconcerned with delivering important social services. As observed by leading Islamic economistMonzer Kahf, societies benefit from the establishment of ‘revenues/services generatingpermanent assets devoted to social objectives … [p]roviding for capital accumulation in the thirdsector that, over time, builds necessary infrastructure for providing social services on a non-forprofit[sic] basis.’ 99 So important was the waqf to the provision of social services in early Islamiccultures, that[f]or centuries the Muslim caliphates and states did not have departments or ministries totake care of “public works, roads, bridges, mosques, schools, libraries or hospitals, forthe yields of the [waqf] endowment properties used to cover those public needs”(Boudjellal, 1998, p. 4). As a micro-example, Zubaidah, the wife of Caliph Harun al-Rashid, made a waqf of all her wealth for the purpose of a road from Baghdad toMakkah. 100Interestingly, it has been the element of perpetuity that also has caused modern states to seek tosuppress, control, and at times, eliminate waqf institutions. Many of the same concerns that ledthe early ruling elite in Islamic countries to curb the establishment of especially the family awqaf,also has troubled modern rulers. Perpetual philanthropic institutions, such as the waqf, ‘are themost state-threatening forms of charity, because they can endure and even grow over an indefiniteperiod, and because they reinforce the leadership role of private families or religious institutions94 Nanji, above n 45, 5, observes, ‘with so much wealth tied up in them, awqaf could become importantinstruments of civil society, if they were ell administered and used for the public good (and not just for theperpetuation of family wealth).’95 Under Islamic law, women -- as well as men -- could found awqaf. Indeed, given their ‘economichandicaps’ they had a greater need to preserve their assets. Reportedly, during the 15 th through 18 thcenturies, ‘anywhere from 10 % to 50% of all waqfs were founded by women.’ Kuran, above n 72, 860.96 While perpetuity is regarded as an essential element of the waqf, generally, it should be mentioned thatthe issue of waqf perpetuity vs. temporality is not entirely settled in Islamic jurisprudence (fiqh). Withinthe Maliki school of fiqh, for instance, there is some authority that temporality in waqf may be accepted byvirtue of the will of the founder. Moreover, all schools apparently agree that temporality, in a sense, mayexist (and does not defeat the validity of a waqf) by virtue of the temporary nature of the waqf assets, suchas trees, horses, slaves, etc. While this debate is well-outside the scope of this paper, a good introduction isprovided by Monzer Kahf, ‘Towards the Revival of Awqaf: A Few Fiqui Issues to Reconsider’ (Paperpresented at the Harvard Forum on Islamic Finance and Economics, Harvard University, 1 October 1999).97 Maulānā Muhammad ‘Alī, above n 44, 516.98 Jon E. Mandaville, ‘The Cash Waqf Controversy in the Ottoman Empire’ (1979) 10 InternationalJournal of Middle Eastern Studies 289, 293.99 Kahf, above n 96, 3.100 Sadeq, above n 74, 140.20

…’ 101 Throughout the Islamic world, ‘Islamic charities emerged as the spread of wealth andinfluence created an elite with the ability and the desire to establish charities.’ 102Unfortunately, concomitant with the rapid growth of institutional Islamic philanthropy, ‘poorgovernance’ also became a problem within the sector -- providing the modern states just theexcuse they needed to step in and expropriate awqaf assets. 103 As Jennifer Bremer dramaticallysummarized in a presentation at the annual meeting of the Center for the Study of Islam andDemocracy:In country after country, the state seized upon these abuses as the excuse it needed tosuppress privately-managed charities. In the name of “reform,” the state moved toassume control over how charitable assets could be used, or to take the revenues for itsown, and then to seize the assets themselves, greatly limiting or even eliminatingprivately-managed charities altogether.… Within the limited scope for dissent available, the elite fought back to maintain theseimportant assets for social and economic power. … In country after country, the periodof contention for control ended with the end of independent Islamic charitableinstitutions as significant institutions for social bridging, justice, or alternative voices tothe state. …The nature of the government in power did not appear to affect this overall progressionfrom emergence to independence to decay and takeover. In the Ottoman empire, thesultan’s position as caliph, and thus defender of the faith, did not protect private charitiesfrom being seized. The Ottoman’s severely secular successor, Kemal Ataturk, continuedthe seizure of private charities begun by his religious predecessors. The sultan’scounterparts in Egypt’s royal family progressively suppressed private charities, but noless aggressively than did their Arab socialist over-throwers. The British colonialpowers worked to limit the power and flexibility of Islamic charities, whether inPalestine or British India, and their efforts were continued and expanded upon by thedevoutly Muslim government leaders of Pakistan. 104It is interesting to observe also that, throughout the Islamic world and throughout time, it does notappear to be Islam itself or Islamic movements -- as a part of civil society -- which are incontention with the state. Instead, it is the strength of the civil society, and the assets it controls,which is the threat to modern states in the Islamic world. As discussed above and in thefollowing section of this article examining regulation of awqaf in Pakistan, this struggle is evenmore pronounced in Asia and is expressed in greater state regulation of the creation, governanceand operation of Islamic philanthropies and charities, such as the waqf. Under the British Raj, forexample, the colonial government in what is now Pakistan initiated a legal structure to regulateawqaf and other endowments. 105 This included requiring disputes be brought before unfamiliarBritish-controlled courts, instead of the traditional religious (local) courts, placing local waqf101 Bremer, above n 37, 12.102 Ibid.103 Ibid.104 Ibid 13.105 An interesting study by the late Gregory C. Kozlowski, Muslim Endowments and Society in British India(1985), asserts that the British, rather than recognizing that Muslim property customs were different in eachcountry and very situation-specific, ‘concocted’ rules out of the Qur'ān and Sharī'ah to apply uniformlythroughout the British Raj -- which actually may have incentivized Muslims in what is now India, Pakistanand Bangladesh to create awqaf in an attempt to preserve their estates by circumventing the new rules.21

founders -- the local elite -- at a disadvantage. 106 These moves, which diminished the socioeconomicpower of the local elite in contrast to the colonial powers, were resisted by Muslimlegal activists constantly struggling with the new state. 107 But, somewhat ironically, even afterthe end of the British Raj, the emergent Islamic states themselves continued tight control ofIslamic charities.V. THE ROLE OF THE WAQF VIS-À-VIS THE STATE IN PAKISTANA. Brief Overview of Civil Society in PakistanCivil society in Pakistan is an area which is only recently being studied in any meaningfulmanner. While philanthropic and charitable activities have a long tradition in the region,primarily through the creation of trusts for providing public services as an ancillary to the state, 108even the term ‘civil society’ has been in vogue in Pakistan only since the 1990’s and there is noequivalent term in any of the country’s many vernacular languages. 109 It is generally recognizedthat philanthropy, volunteerism, and self-help activities enjoy a rich tradition in the Indus Valleydating back as much as 5,000 years -- building on religious traditions of Hinduism, Buddhism,Islam, Christianity, and Sikhism. 110 Yet, there are those today who see civil society in Pakistan asdisintegrating, the victim of ‘unresolved questions of identity, ideology and ethnicity furthercompounded by a monolithic state structure.’ 111 Still others are more optimistic and view civilsociety in Pakistan as ‘emerging from an abysmal state and redefining itself.’ 112 This moreoptimistic view relies on a perception that exposure of government corruption, a stronger andmore critical judiciary, and the discomfort of the populous with the ‘existing oligarchic tripolarrelationship between the bureaucracy, the military and politicians which smacks of age-olddynastic elitism’ 113 is leading to a resurgence of civil society organizations in Pakistan in the faceof an uneasy state.Whether optimist or pessimist, most scholars appear to concur that civil society in Pakistan isstruggling due to its somewhat ‘symbiotic relationship’ with a powerful state, in which a weakcivil society remains in many ways merely another branch of the monopolistic and interventioniststate structure. 114 Civil society in Pakistan struggles to define itself, define its place in theemerging sociopolitical order, and obtain some independence from the authoritarian strictures ofa state that often displays mixed and ambiguous attitudes toward civil society, embracing itspublic service delivery yet often viewing it in competition and often as a direct threat to theinterests of the state. Moreover, this struggle is further complicated by the virtual absence of theoverall societal attributes that would provide a fertile ground from which civil society couldflourish. As even one of the self-proclaimed optimists readily admits, ‘[a]ccountability, a decenteducational system, egalitarian economic policies to help the have-nots and minorities, a non-106 Bremer, above n 37, 14.107 Ibid.108 Muhammad Asif Iqbal, Hina Kahn, and Surkhab Javed, ‘Nonprofit Sector in Pakistan: HistoricalBackground’ (2004) (Social Policy and Development Centre Working Paper No. 4, in collaboration withthe Aga Khan Foundation (Pakistan) and the Center for Civil Society Studies, Johns Hopkins University) 4.109 Adnan Sattar Rabia Baig, ‘Civil Society in Pakistan: A Preliminary Report on the CIVICUS Index onCivil Society Project in Pakistan’ (2001) 1(11) CIVICUS Index on Civil Society Occasional Paper Series 1.110 Muhammad Asif Iqbal, Hina Kahn, and Surkhab Javed, above n 108, 5.111 Iftikhar H. Malik, State and Civil Society in Pakistan (1997) 9.112 Ibid.113 Ibid.114 Ibid 12, 115.22

partisan judiciary, a vigilant press, participation by women – all those necessary requirements of avibrant civil society – have suffered from constant erosion.’ 115The legal environment within which civil society organizations must operate in Pakistan is alsocomplicated and often contradictory, at least in practice. For example, while the constitution ofthe Islamic Republic of Pakistan guarantees freedom of association, 116 the government also hasconstrained that right -- such as through bans on public assemblies and arrests of civil societyleaders -- in the interest of sovereignty or otherwise whenever it claims that ‘national interests’are at stake. 117 As a practical matter, so long as civil society relegates itself to the role of servicedelivery, philanthropy and charity, the state is relatively comfortable. It is when civil societyorganizations become involved in advocacy roles that ‘national interests’ are triggered and thestate generally steps in. 118In addition, the legal framework itself is widely-regarded as confusing and, in many ways,outdated or even obsolete. 119 To illustrate the confusing maze of laws, for example, a review ofrecent studies of the legal framework of philanthropic organizations in Pakistan reveals one studythat states there are ‘six different laws under which organisations can be registered’; 120 anotherstudy that states there are ‘at least seven laws that are of principal relevance to the registrationand operation of nonprofit organizations either singly or are [sic] applicable alongside others’,while also mentioning that there are ‘eleven laws which either require registration or conferregistration either explicitly or implicitly’ to NPOs; 121 and yet another study that notes the‘plethora of laws which impact – or at the very least, marginally impinge on – philanthropicorganisations consists of a total of eighteen federal acts.’ 122 . While it is a somewhat subjectivedetermination by the authors of these studies as to which laws may ‘impact’ or be ‘relevant’ toregistration and/or operation of philanthropic organizations, one can easily imagine the difficultyfor the Pakistani civil society sector in determining what law(s) may apply. Even the languageemployed in the laws is complex and, as one study found, severely restricts the ability of thepublic to understand the laws. 123 Some of the laws are derived from laws enacted in the UnitedKingdom during the early 19 th century. Still others are derived from laws enacted by the Britishin an effort to control civil society in the wake of the War of Independence in 1857 (or, as Britishhistorians refer to it, the ‘Indian Mutiny’) -- ‘draconian laws used primarily either to intimidatephilanthropic organizations or pursue a vendetta against those that were critical of thegovernment of the day.’ 124 Some of these early colonial laws, such as the Societies RegistrationAct of 1860, the Religious Endowment Act promulgated in 1863, and the Trusts Act of 1882,remain valid laws today regulating certain philanthropic organizations in Pakistan.115 Ibid.116 Article 17(1): ‘Every citizen shall have the right to form associations or unions, subject to anyreasonable restrictions imposed by law in the interest of sovereignty or integrity of Pakistan, public order ormorality.’ Zafar Hameed Ismail and Quadeer Baig, above n 1, 254.117 Adnan Sattar Rabia Baig, above n 109, 11.118 Ibid.119 See, e.g., Zafar Hameed Ismail, ‘Law and the Nonprofit Sector in Pakistan’ (2002) (Social Policy andDevelopment Centre Working Paper No. 3, in collaboration with the Aga Khan Foundation (Pakistan) andthe Center for Civil Society Studies, Johns Hopkins University) 3; Adnan Sattar Rabia Baig, above n 109,12-13.120 Adnan Sattar Rabia Baig, above n 109, 7.121 Zafar Hameed Ismail, above n 119, 3.122 Zafar Hameed Ismail and Quadeer Baig, above n 1, 252.123 Adnan Sattar Rabia Baig, above n 109, 12.124 Zafar Hameed Ismail and Quadeer Baig, above n 1, 253.23

Under which law a civil society organization is registered is important, inasmuch as it is then thatlaw which will govern the operation of the organization. 125 There are only two laws under whichregistration appears to be mandatory, however, one applicable only to nonprofit organizationsproviding for the welfare of specific disadvantaged people or for specific purposes, and the otherapplicable to awqaf. 126 Although certain tax and other advantages may accrue from registration,many civil society organizations in Pakistan are never even registered. As observed in one study,a number of nonprofit organizations are established despite a lack of awareness of thelegal/regulatory procedures and consequences regarding their establishment and operation. 127This contributes to a great deal of mistrust between civil society organizations and thegovernment. 128 Of the 45,000 active civil society organizations in Pakistan, according to anestimate in 2000, more than a third (34.1 percent) were not willing to be registered under any lawand more than half (55.7 percent) registered under only two laws. 129B. THE WAQF AS AN ELEMENT OF CIVIL SOCIETY IN PAKISTAN1. BACKGROUNDAgainst the sociopolitical and legal/regulatory backdrop described above, the waqf (or wakf, as itis often spelled in Pakistan) has remained virtually intact as a philanthropic and charitableinstitution. Indeed, in today’s sociopolitical climate in Pakistan -- where the state is trying tostrike a balance between operating as a secular institution (resisting efforts to create a theocracy)and yet appease the religious (especially Islamic) elite -- waqf institutions may be an effectiveway for the state to strengthen its political legitimacy, remedy its problems with public servicesdelivery and, at the same time, endorse a venerable Islamic institution. In addition, becauseawqaf are almost always local in scope and management, they could more likely be viewed asnon-threatening in a society where foreign-based philanthropy is not trusted, especially as it isperceived by conservative religious groups as ‘trying to subvert [Pakistani] traditional andreligious value system … [wanting] to introduce western cultural practices and values someaspects of which, according to the conservatives, are obscene and vulgar, and therefore, a threatto [Pakistani] way of life.’ 130The tradition of creating awqaf in Pakistan traces its roots back to the introduction of Muslim rulein that region, between the 8 th and 18 th centuries. While there were indigenous practices ofphilanthropy and charity already evident, Muslim rulers recognized that through establishment ofawqaf they not only fulfilled their religious obligations of zakāt and sadaqah, but they alsogained greater authority and power. 131 As such, the Muslim aristocracy and other wealthy elite(the enormous wealth of South Asia was centered in the hands of a few) established a great125 Ibid 254.126 Zafar Hameed Ismail, above n 119, 3: Ismail refers to the first law as the only law under whichregistration of civil society organizations is mandatory; however, as is clear from the discussion of waqfregulations below, the filing of a ‘statement of particulars’ with the court, including a copy of the waqfdeed, is clearly mandatory with respect to awqaf. In addition, the various provincial waqf ordinances alsoexpressly require registration of waqf property.127 Ibid 1.128 Ibid.129 Zafar Hameed Ismail and Quadeer Baig, above n 1, 252.130 Muhammad Asif Iqbal, Hina Kahn, and Surkhab Javed, above n 108, 39, quoting Mubarak Ali, ‘AreNGOs Serving West’s Interests?’, The News (Karachi), 10 May 2003.131 This was especially important for early Muslim rulers who had foreign origins. Ibid 7-8.24

number of awqaf for myriad public purposes ranging from building mosques and schools to evenestablishing an organization for financially assisting the marriage of poor girls. 132Following the end of the Muslim-era of rule in Pakistan, classical Islamic rules of establishingand managing awqaf continued to be influential. Notwithstanding this, however, the state(beginning with the colonial government as well as the series of governments followingindependence) also has sought to maintain tight control over the registration and, especially, themanagement of awqaf. Generally, the regulations promulgated by the state have not interferedwith traditional waqf principles. As is discussed below in the context of those regulations,however, some of the contemporary laws do place constraints on the waqf and give the stateunilateral power that never existed under Sharī'ah and fiqh, Islamic law and jurisprudence.Prior to 1913, awqaf in British India (including modern Pakistan) were simply created andmanaged in accordance with traditional Sharī'ah and fiqhi principles, and the state maintained afairly ‘hands-off’ approach. When the colonial government promulgated the first major law for‘improving the legal condition’ of voluntary associations -- the Societies Registration Act of 1860(in response to the 1857 ‘Mutiny’) -- the law merely created a juridical personality and provided aregistration scheme for voluntary associations established by seven or more persons for, amongother purposes, charity. 133 No specific mention was made of awqaf. Similarly, when the TrustsAct, 1882, was passed -- extensively regulating the creation and management of trusts, settingforth the rights and liabilities of beneficiaries and the powers and duties of trustees -- it expresslyprovided that ‘nothing herein contained affects the rules of Muhammadan law as to waqf.’ 134Only in response to a decision in 1894 by the British Privy Council declaring a family waqfinvalid 135 did the colonial government pass any law specifically addressing the establishment ofawqaf in British India. The Mussalman Wakf Validating Act, 1913, ironically, was enacted inorder to overturn the Privy Council decision. Together with the subsequent Mussalman WakfValidating Act, 1930, which gave the 1913 Act retrospective effect over awqaf created prior to itsenactment, 136 the Mussalman Wakf Validating Act, 1913, expressly ratifies the ‘validity of wakfscreated by persons professing the Mussalman faith in favour of themselves, their families,children and descendants and ultimately for the benefit of the poor or for other religious, pious orcharitable purposes.’ 137 Interestingly, the Privy Council decision was based upon its observationthat family awqaf -- so popular among the wealthy and politically powerful Muslims in BritishIndia -- were created merely for the aggrandizement and economic benefit of the founders’families, contrary to true Islamic concepts of philanthropy and charity. The Privy Council notedthat ‘the provision for charity is so illusory that the poor are not entitled to receive a rupee till132 Muhammad Asif Iqbal, Hina Kahn, and Surkhab Javed, above n 108, 8.133 The Societies Registration Act, 1860, The Pakistan Code (1966), Volume I, from 1836-1871 bothinclusive, 69.134 The Trusts Act, 1882, The Pakistan Code (1966), Volume III, from 1882-1897 both inclusive, 5-6: alsoexcluded are all public or private religious or charitable endowments.135 ‘The Privy Council declared the waqf alal aulad [family waqf] invalid in 1894 in the famous case ofAbul Fata Mohomed-versus-Russomoy. The decision of the Privy Council caused considerable stir amongthe Muslims who believed that the verdict was an infringement of the Muslim personal law.’ at 18 July 2005. See also, R.Upadhyay, ‘WAQF(CHARITABLE ISLAMIC TRUST) -Under sustained controversy in India?’ (2004) South Asia AnalysisGroup, Paper No. 1136 < http:// www.saag.org/papers12/paper1136.html> at 19 July 2005.136 The Mussalman Wakf Validating Act, 1930, The Pakistan Code (1966), Volume VIII, from 1924-1933both inclusive, 484.137 The Mussalman Wakf Validating Act, 1913, The Pakistan Code (1966), Volume VI, from 1911-1919both inclusive, 164-5.25

after total extinction of a family.’ 138 Notwithstanding this perhaps noble attempt to rein in themisuse of this important philanthropic institution -- and even despite concurrence with the PrivyCouncil decision by many Muslim clerics and experts in Islamic law -- powerful politicalinterests (backed largely by the financial resources of awqaf founded by wealthy Muslims)prevailed in the passage of the 1913 Act. As commented by a leading contemporary authority onMuslim philanthropic endowments in British India and modern Pakistan, the late ProfessorGregory Kozlowski, ‘[t]he controversy over endowments also pointed to the possibility thatpolitics sometimes shaped Islam quite as much as Islam shaped politics.’ 139Importantly, perhaps in deference to the powerful Muslim political interests which instigated itspromulgation, the Act carefully avoids any direct conflict with Sharī'ah or fiqh. The Actexpressly defines a waqf as the ‘permanent dedication of any property for any purpose recognisedby the Mussalman law as religious, pious or charitable.’ 140 The Act allows creation of a waqf that‘in all other respects is in accordance with the provisions of Mussalman law.’ 141 And it includes asaving clause expressly providing that ‘[n]othing in this Act shall affect any custom or usagewhether local or prevalent among Mussalmans of any particular class or sect.’ 142Significantly, while the Act declares as valid all family awqaf which ultimately fulfill religious,pious or charitable purposes, it does not exclude any other types of awqaf as invalid. As such, theAct does not interfere with the establishment of religious or purely philanthropic awqaf, nor doesit appear to interfere with the establishment of awqaf for purposes outside its scope. 143 The Actvery simply operates in a very limited and targeted fashion to negate the decision of the PrivyCouncil regarding family awqaf.2. The Mussalman Wakf Act, 1923The subsequent regulation of awqaf in Pakistan following the Privy Council decision and theconsequent validating acts appear to have some positive features as well as some drawbacks.Clearly, some regulation of awqaf -- leading to greater transparency and accountability -- wasnecessary and is good. Under Islamic Rule, mutawallis were supervised by the Kazis, judges inIslamic courts. After establishment of the British Raj, however, the Islamic courts were abolishedand mutawallis no longer feared the strictness and harshness of Islamic law. As was highlightedby the Privy Council decision, misuse of the waqf for personal gain and corruption by mutawalliswas an increasing problem in British India throughout the 18 th , 19 th and early 20 th centuries.Although British colonial policy was generally not to interfere in native religious matters, thesituation worsened to such a point that the colonial government could no longer avoid taking amore active role toward reform. Following the 1857 ‘Mutiny’, a number of waqf propertieswere placed under British control and, with passage of the Religious Endowment Act, 1863, theseawqaf were transferred to local trustees and jurisdiction for any administrative disputes was givento the British courts. As awqaf grew in wealth and political power (including the ability todeliver financial support and blocks of votes behind ‘friendly’ politicians), however, it becameincreasingly impossible for the British to avoid undertaking more stringent reforms. Even theMuslim press began stridently to call for action, decrying that ‘All Waqf properties have been138 R. Upadhyay, above n 135, quoting from S. Khalid Rasid, Wakf Administration in India (1978), 127.139 Gregory C. Kozlowski, above n 105, 167, quoted in R.Upadhyay, above n 135.140 The Mussalman Wakf Validating Act, 1913, above n 137, 165 [2]: emphasis added.141 Ibid [3]: emphasis added.142 Ibid [5]: emphasis added.143 This might include awqaf established for purely educational purposes or even for purely social orpolitical activism.26

made over to the plundering hands of the non-Godfearing and evil following Mutawallies, and theMasjids and the other places of worship have merged into the depths of oblivion’ 144Finally, in 1923 the colonial government enacted the first legislation to actually regulate awqaf inBritish India (including what is now Pakistan). The Mussalman Wakf Act, 1923 -- which stillcontinues in force today -- was promulgated for the stated purpose of making ‘provision for thebetter management of wakf property and for ensuring the keeping and publication of properaccounts in respect of such properties.’ 145 Toward that end, the 1923 Act requires that themutawalli of every religious, pious or charitable waqf, within six months of its creation, mustfurnish to the local court a ‘statement of particulars’ containing the following:(1) a description of the waqf property sufficient for identification;(2) the gross annual income from such property;(3) the gross amount of such income which has been collected during the past five years or,if shorter, since the creation of the waqf;(4) the amount of Government revenues, local taxes and rents annually payable with respectto the property;(5) an estimate of expenses annually incurred in realizing the waqf income;(6) an accounting of amounts set apart under the waqf for salary of the mutawalli andallowances to individuals, for purely religious purposes, for charitable purposes, and forany other purposes; and(7) ‘any other particulars which may be prescribed.’ 146The statement of particulars must be accompanied by a copy of the waqf deed or other instrumentcreating the waqf; if none is available, then the statement must also contain ‘full particulars’ ofthe ‘origin, nature and objects’ of the waqf. 147 Once the statement of particulars has been filedwith the court, the 1923 Act further provides that the court shall ‘cause notice thereof to beaffixed to some conspicuous place in the Court-house and to be published in such other manner,if any as may be prescribed.’ 148 After such public posting, any person may petition the court foran order requiring the mutawalli to provide further information, and the court has specificjurisdiction to so order. 149Continued transparency and accountability is also a prominent feature of the 1923 Act. Inaddition to the initial statement of particulars, the mutawalli must file with the court an auditedannual statement of accounts ‘of all moneys received or expended by him on behalf of the wakfof which he is the mutawalli.’ 150 And the audited annual statement of accounts (as well as theinitial statement of particulars) must be signed and verified in the same manner as pleadings filedin accordance with Code of Civil Procedure. 151144 Ashan-ul-Akbar (Calcutta), 24 October 1902, 7, quoted in R.Upadhyay, above n 135, quoting fromS. Khalid Rasid, Wakf Administration in India (1978), 20.145 The Mussalman Wakf Act, 1923, The Pakistan Code (1966), Volume VII, from 1920-1923 bothinclusive, 686-7.146 Ibid 688 [3.(1)(a)-(g)].147 Ibid 689 [3.(2)].148 Ibid 689 [4].149 Ibid.150 Ibid 690 [5].151 Ibid 691 [8].27

Like the waqf validating acts, the 1923 Act avoids direct conflict with Sharī'ah or fiqh, bydefining a waqf as the ‘permanent dedication of any property for any purpose recognised by theMussalman law as religious, pious or charitable.’ 152 Interestingly, the 1923 Act also expresslyexcludes from its definition of waqf, ‘any wakf, such as is described in section 3 of theMussalman Wakf Validating Act, 1913, under which any benefit is for the time being claimablefor himself by the person by whom the wakf was created or by any of his family ordescendants.’ 153 So long as the subject waqf is operating essentially as a family waqf, theregistration and reporting requirements of the 1923 Act do not apply to it. On the other hand, ifthe personal or family benefit of the waqf ends at some point and the waqf reverts to a ‘religious,pious or charitable’ purpose, then the mutawalli is required to register the waqf as such with thecourt and his annual reporting requirements commence. The reasons for this exclusion of familyawqaf are not evident in either the 1923 Act or relevant literature, although it is likely that it wassimply in deference to powerful Muslim clerics or political interests at the time who advocated onbehalf of family awqaf.Possibly unable to completely ignore that considerable institutional corruption and the apparentperversion of Islamic principles of philanthropy and charity were then-occurring in the context offamily awqaf, however, the framers of the 1923 Act did include an initial filing requirementapplicable to family awqaf where ‘the person creating the wakf or any member of his family orany of his descendants is at the commencement of this Act alive and entitled to claim any benefitthereunder.’ 154 Although the continuing annual reporting requirement does not appear to apply tothis latter category of family awqaf -- until and unless the waqf reverts to religious, pious orcharitable purposes -- the added provision at least had the initial effect of greater transparencyand public accountability with respect to family awqaf which existed at the time of the law’senactment.3. The Provincial Waqf OrdinancesThe provisions of the 1923 Act have been criticized more recently as providing ‘relatively looseregulatory oversight’ of waqf affairs. 155 Addressing this concern, various provincial governmentspromulgated ordinances in 1979 which ‘drastically supplemented’ the 1923 Act. 156 While the1923 Act may be seen as a bit loose in its regulation of awqaf, the 1979 ordinances could easilybe said to have gone to the other extreme. One such ordinance, the Punjab Waqf PropertiesOrdinance, 1979, 157 is an example of these ordinances. Significantly, the Punjab waqf ordinanceillustrates the extent to which the provincial governments have undertaken not only morecircumscribed regulation of awqaf, but also the direct control of waqf management in some cases.Much of this regulation is quite broad and gives the government potentially arbitrary powers.The Punjab waqf ordinance states its purpose as providing ‘for the proper management andadministration of waqf properties in the Province of Punjab.’ 158 In conjunction with the 1923 Act,the Punjab waqf ordinance requires that every waqf property in the province be registered, as152 Ibid: emphasis added. Unlike the validating acts, however, the 1923 Act does not contain any ‘saving’language resolving conflicts between the Act and any local or prevalent Muslim custom or usage in favorof the latter. Presumably, the Act -- not Sharī'ah or fiqh -- controls in the event of any such conflict.153 Ibid 688 [2(e)]: emphasis added.154 Ibid 689 [3.(3)(b)]: emphasis added.155 Zafar Hameed Ismail and Quadeer Baig, above n 1, 272.156 Ibid. There are four provincial Waqf Properties Ordinances of 1979.157 The Punjab Waqf Properties Ordinance, 1979 at 07 July2005.158 Ibid [Preamble].28

prescribed by law. 159 Like the 1923 Act, however, the Punjab waqf ordinance also does not applyto family awqaf, ‘under which any benefit is for the time being claimable for himself by theperson by whom the wakf was created or by any of his family or descendants.’ 160 The Punjabwaqf ordinance does apply once the subject waqf reverts to a purpose ‘recognised by Islam asreligious, pious or charitable.’ 161Unfortunately, the Punjab waqf ordinance provides extremely broad measures by which theprovincial government may accomplish its stated purpose. These are effected through the newlycreatedoffice of a provincial Chief Administrator of Auqaf (Awqaf). Under the ordinance, theChief Administrator has supervisory authority over all awqaf in the province, and in certaincircumstances, he may even assume direct responsibility for waqf administration.Pursuant to his supervisory authority, the Chief Administrator may require ‘any person-in-chargeof or exercising control over the management of any waqf property … to furnish him with anyreturn, statement, statistics or other information regarding such waqf property, or a copy of anydocument relating to such property.’ 162 There is no limitation as to scope or relevance, or withrespect to undue burden or expense (borne by the waqf), and the authority of the ChiefAdministrator in this regard is simply open-ended.Further, the Chief Administrator may issue to the person in charge or control of a waqf, ‘suchinstructions or directions for the proper administration, control, management and maintenance ofsuch waqf property as he may deem necessary.’ 163 This authority also is not limited in any way bythe ordinance. To the contrary, it is incredibly broad and arbitrary in its scope. The ChiefAdministrator has the express authority -- within his absolute discretion -- even to issue directions‘prohibiting delivery of sermons, khutbas or lectures,’ if he determines that they may contain ‘anymatter prejudicial to the sovereignty and integrity of Pakistan or calculated to arouse feeling ofhatred or disaffection amongst various religious sects or groups in the country,’ or that they mayindulge in ‘party politics.’ 164In those situations where the provincial government wants to do more than merely monitor andcontrol every aspect of a waqf’s administration and activities, the Punjab waqf ordinance provideseven broader regulation: the government, through the Chief Administrator, can actually take overcompletely the waqf and (with little limitation) do as it pleases with its assets. And this action issubject to no meaningful judicial oversight or other legal intervention.In particular, the provincial government may vest in the Chief Administrator any waqf propertiessituated in the province, including all rights, assets, debts, liabilities and obligations relating tothose awqaf. 165 Furthermore, even if the provincial government as a body does not itself takesuch action, the Chief Administrator has discretion on his own initiative to take over waqfproperty and assume its administration, control, management and maintenance. 166 Only twoconditions restrict the take over of waqf property by the Chief Administrator. First, the Chief159 Ibid [6.].160 Ibid [2.(e)]. Again, there is no explanation in the ordinance or in any literature regarding the ordinanceas to why this continues to be an exception to waqf regulation in Pakistan.161 Ibid.162 Ibid [20.(1)]: emphasis added.163 Ibid [20.(2)].164 Ibid: emphasis added.165 Ibid [3].166 Ibid [7].29

Administrator must give notification (but not necessarily prior notice) to the waqf management ormutawalli that the Chief Administrator is taking over the waqf property. 167 Second, during thelifetime of a person founding a waqf property, the Chief Administrator may only take over thewaqf with the consent of the founder and on such terms and conditions as may be agreed uponbetween the founder and the Chief Administrator. 168 Significantly, the Chief Administrator’spower to take over waqf property expressly includes ‘control over the performance andmanagement of religious, spiritual, cultural and other services and ceremonies (Rasoomat) at or ina waqf property.’ 169Once the Chief Administrator has taken over a waqf property, he has relatively unfettereddiscretion to do with it as he wishes. The only restriction is that a waqf property must be used forthe purpose for which it was dedicated, has been used, or for any purpose recognised by Islam asreligious, pious or charitable -- all as the Chief Administrator ‘may deem fit.’ 170 Furthermore, theprovincial government may even permit the Chief Administrator to sell or dispose of the propertyand invest the proceeds in accordance with its directions, provided that the government is‘satisfied’ that sale or disposal of the waqf property is necessary in order(a) to secure maximum economic benefits out of such property and to avoid loss ordamage to such property; or(b) to serve the best public interest and public purpose for which such property wasdedicated; or(c) to give effect to such wishes of the person dedicating the property as can beascertained; or(d) in the absence of evidence of express dedication, to enable the property to be used forthe purpose for which it has been used or for any purpose recognised by Islam asreligious, pious or charitable; or(e) to provide maintenance to those who, on account of unemployment, sickness,infirmity or old age, are unable to maintain themselves; or(f) to provide education, medical aid, housing, public facilities and services such as roads,sewerage, gas and electric power; or(g) to prevent danger to life, property or public health. 171While this seems to contravene the very essential and distinctive element that has alwayscharacterized waqf property -- its perpetual dedication to the waqf purpose -- at least theregulation does require that the proceeds of the sale must first be used to satisfy the main purposeof the waqf. 172Allowing even greater government control and intervention in the administration -- andessentially the ownership -- of awqaf properties, the Punjab waqf ordinance also eliminates anymeaningful judicial oversight regarding action taken under the ordinance. The right to appeal aChief Administrator’s take-over of a waqf property, for example, is extremely limited under thePunjab waqf ordinance. Although an appeal may be lodged with the District Court, andsubsequently appealed to the High Court, the petitioner may only seek a declaration that the167 Ibid.168 Ibid.169 Ibid. In this regard, the Chief Administrator may prevent such services or ceremonies from taking place.170 Ibid.171 Ibid [16].172 Ibid.30

property is not a waqf property or that it is ‘waqf property within limits stated in the petition’ 173 --such as, presumably, a family waqf or one where the founder is still living. Further giving theChief Administrator an inherent advantage, during the pendency of such an appeal neither theDistrict Court nor the High Court have jurisdiction to enter any temporary injunction orrestraining order enjoining the Chief Administrator from actually proceeding with taking over thewaqf property for which a notification has been issued. 174Any action taken under the ordinance or otherwise by the Chief Administrator is also beyond thejurisdiction of any civil or revenue court, or any other authority to ‘question the legality’ ofanything done, nor can any injunctive relief be issued in that regard. 175 All persons taking action‘in good faith’ pursuant to the ordinance are immune from suit, prosecution or other legalproceeding. 176 Indeed, every action taken under the ordinance is deemed by the ordinance to haveeffect, regardless of anything inconsistent with that action ‘contained in any document, decree ororder of any court, deed, enactment or any instrument having effect by virtue of any suchenactment other than this Ordinance.’ 177The Punjab waqf ordinance also has harsh punitive provisions. If any person obstructs resists,impedes or otherwise interferes with anyone acting pursuant to the ordinance, he is punishable byfine and/or imprisonment up to five years. Similarly, willful disobedience or failure to complywith any requisition, instruction or direction issued by the Chief Administrator is punished with afine of up to five hundred rupees, and as well as up to fifty rupees for every day the disobedienceor failure continues after the date of the conviction. 178As succinctly summarized in a comprehensive study of law and philanthropy in Pakistan, thePunjab waqf ordinance ‘allows the government arbitrary and non-justiciable powers to take overand assume the administration, control, management and maintenance of any waqf property afterthe lifetime of the person creating the waqf.’ 179 Moving perhaps from the realm of mere politicalauthority to acting on behalf of Allah, ‘[t]he power to assume waqf property is not merely a penalor remedial measure but is based on the premise that the state has an overriding right to oust themutawalli given that the property has in effect been gifted to Allah.’ 180 Despite such rigorousregulation, however, the waqf in Pakistan appears likely to fare better than other parts of civilsociety. While no studies have been undertaken directly comparing the success of awqaf withother philanthropic and charitable institutions in Pakistan today, various studies do give theimpression that Islamic institutions in Pakistan, such as awqaf, are courted by the government andsubjected to less intimidation, than other civil society organizations. 181 Other areas ofgovernment regulation encourage Islamic philanthropy and charity. Under the current income taxregulations, for example, the only tax-deductible donation that is exempt from the usual limits fortax deductibility is zakāt. Under the Income Tax Ordinance, 2001, in computing taxable income,the amount of zakāt paid is deducted from the total amount of income for the year. As observed173 Ibid [11].174 Ibid [21].175 Ibid.176 Ibid [23].177 Ibid [22].178 Ibid [24].179 Zafar Hameed Ismail and Quadeer Baig, above n 1, 272.180 Ibid.181 See, generally, Baig, above n 109; Bremer, above n 37; Santosh C. Saha and Thomas K. Carr, ReligiousFundamentalism in Developing Countries (2001), esp. at 35; Iftekar H. Malik, State and Civil Society inPakistan (1997).31

ecently in a study of Islamic politics in Pakistan, Islam is important to political success in thatcountry. 182 Most Pakistani leaders use it to ‘appease and undermine their political adversaries,win over a predominantly illiterate, religious, and gullible population, and get money from oilrichMuslim countries (especially from the early 1970s).’ 183 Certainly, they do not want to pushthe envelope too far in confronting Islamic institutions such as the waqf.VI. CONCLUDING THOUGHTSJust as there is a vibrant and dynamic civil society today throughout the world, including Asia,Islamic civil society also continues to flourish. As Muslims look to traditions of zakāt andsadaqah in creating innovative institutions such as the privately-managed zakāt funds and localzakāt-funded development organizations, the waqf is a time-honored and proven institution thatalso is beginning to enjoy a rebirth. 184 Unlike other philanthropic and charitable institutions thatare subject to being modified or terminated -- or having their assets wasted or even expropriated-- as a result of disgruntled beneficiaries or greedy governments, the waqf is relatively protectedfrom these events by more than a millennium of Islamic law, jurisprudence and tradition.Even in countries such as Pakistan where civil society is constantly locked in a struggle not onlywith the state but also within its own ranks, the waqf -- while not immune from that struggle -- atleast has the best chance of survival. Unlike most other civil society organizations operating inthese countries, the waqf benefits from age-old traditions of individual Islamic philanthropy andcharity. And unlike most other civil society organizations, the waqf also benefits from being atradition within the second-largest (and fastest growing) religion in the world. When statesdominate and intervene in the administration and control of waqf properties, they are confrontinga powerful sociopolitical and economic force. Little research has been undertaken in comparingthe experiences of awqaf with other civil society organizations vis-à-vis dominant andinterventionist states such as Pakistan. In the post-9/11 world where many states (especiallyIslamic and predominantly-Islamic states) walk a fine line between authoritarian control andappeasement of Islamic groups, particularly those viewed as less radical, the role of the waqf as adynamic actor in civil society should make interesting study. And as Islamic movementscontinue to struggle to redefine Islam in a modern context, studying the role of awqaf as theymove from traditional charitable purposes to more activist roles within civil society, may becomeeven more imperative.182 Mir Zohair Husain, ‘The Politics of Islam in Pakistan’ in Saha and Carr, above n 181.183 Ibid 35.184 Bremer, above n 37, 5: ironically, the ‘process is proceeding more rapidly in non-Islamic democracies,such as the United States, than in Islamic countries.’32

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The Societies Registration Act, 1860, The Pakistan Code (1966), Volume I, from 1836-1871both inclusiveThe Trusts Act, 1882, The Pakistan Code (1966), Volume III, from 1882-1897 both inclusiveC. Other SourcesAli, Mubarak, ‘Are NGOs Serving West’s Interests?’, The News (Karachi), 10 May 2003 [op-edpiece quoted in Muhammad Asif Iqbal, Hina Kahn, and Surkhab Javed, ‘Nonprofit Sector inPakistan: Historical Background’ (2004) (Social Policy and Development Centre Working PaperNo. 4, in collaboration with the Aga Khan Foundation (Pakistan) and the Center for Civil SocietyStudies, Johns Hopkins University) 4]al-Bukhârî, Muhammad Ismâ'îl, ‘Hadīth 4:30’ < http://www.sacred-texts.com/isl/bukhari/bh4/bh4_29.htm> at 20 July 2005Banglapedia at 18 July 2005Dubai Islamic Bank at 12 July 2005 at 22 June 2005 at 22 June 2005MSA-USC, ‘Sunnah and Hadith’ at 12 July 200536

STUDENT ARTICLESINTERNATIONAL INSTRUMENTS FOR THE PROTECTION OFTHE RIGHTS OF MINORITIES AND THE STATUS OF THE MACEDONIANMINORITIES IN THE NEIGHBOURING COUNTRIESBY SLAVICA CHUBRIC© Central European University November 30, 2005Table of ContentsExecutive summary.................................................................................................................p.3Introduction.............................................................................................................................p.4Chapter 1: Overview of International instruments relevant for the protection of minorityrights........................................................................................................................................p.61.1 Protection of minority rights in the UN system................................................................p.61.1.1 Article 27 of ICCPR...................................................................................................p.61.1.2 The UN Declaration on the Rights of Persons Belonging to National or Ethnic, Religiousand Linguistic Minorities..........................................................................p.71.1.3 International Convention on Elimination of All Forms of Racial Discrimination....p.81.2 Protection of minority rights in Europe...........................................................................p.81.2.1 Framework Convention for the Protection of National Minorities...........................p.81.2.2 European Charter for Regional or Minority languages.............................................p101.2.3 European Convention for Human Rights..................................................................p.111.2.4 1990 Document of the Copenhagen meeting of the Conference on the Human Dimensionof theCSCE........................................................................................................................p.11Chapter 2: A note on the "Macedonian question" on theBalkan...................................................................................................................................p.13Chapter 3: The Macedonian minority in Albania.................................................................p.163.1 Legal framework for the protection of minority rights...................................................p.163.2 Implementation of minority rights..................................................................................p.17Chapter 4: The Macedonian minority in Greece...................................................................p.214.1 Legal framework for protection of minority rights.........................................................p.214.2 Implementation of minority rights..................................................................................p.234.2.1 Citizenship, repatriation and restoration of property..................................................p.274.3 Case law of the European Court for Human Rights related to the Macedonian minority inGreece...................................................................................................................................p.304.3.1 The Case of Sidiropoulos and others v . Greece..........................................................p.314.3.2 The case of Ouranio Toxo and Others v. Greece..........................................................p.33Chapter 5: The Macedonian minority in Bulgaria.................................................................p.375.1. Legal framework for the protection of minority rights...................................................p.375.2 Implementation of minority rights...................................................................................p.4037

5.3. Case law of the European Court for Human Rights related to the Macedonian minority inBulgaria..................................................................................................................................p.435.3.1 The case of Stankov and the United Macedonian Organization Ilinden vBulgaria..................................................................................................................................p.445.3.2 The Case of the United Macedonian Organization Ilinden and Ivanov vBulgaria..................................................................................................................................p.455.3.3 Case of the United Macedonian Organization Ilinden-Pirin and Others vBulgaria..................................................................................................................................p.47Chapter 6: The Macedonian minority in Serbia and Montenegro.........................................p.496.1 Legal framework for the protection of minority rights....................................................p.496.2 Implementation of minority rights...................................................................................p.50Conclusion.............................................................................................................................p.52Bibliography..........................................................................................................................p.55EXECUTIVE SUMMARYThis paper analyzes the international instruments for protection of minority rights and comparesthem with national solutions for minority protection and relevant state practice. The analysis isintended to show what sort of effect those factors have on the real position of the personsbelonging to the Macedonian minority in the countries studied. Namely, are the institutionalarrangements within national legislation in accordance with international legal principles and inaddition, is national legislation implemented or just formal ornament?The analysis demonstrates that the basic problem faced by the Macedonian minority is thedenial of its existence and the non- recognition of its right to identity. The main reasons for theseshortcomings are, unfortunately, political interests and considerations, which are linked to thecontesting of a distinct Macedonian nation. In the same time the overview of internationalinstruments protecting minorities, presented that there is a broad consensus that the right toidentity, in essence is the underlying value of all the other rights, which though are objectives tothemselves, in the same time are instrumental, for protecting the group’s identity. This study,further illustrates how the violations of individual rights are linked with the contesting perceptionof the group's identity. In turn, the paper proves that where the identity is acknowledged, there arebetter conditions for integration.INTRODUCTIONOne of the issues in international law that have not been yet firmly defined and fully regulated isthe question of the protection of minorities. In the same time one of the most controversialconcerns on the Balkan, are the minorities, their treatment and the consequences they have on thestability and political relations in the region. However, through the years, the Macedonianminority and its status in the neighboring countries of the Republic of Macedonia, despite all the38

interest for the Balkan, minorities and majorities, reserved its position as an "invisible" group, avague notion, subject to approximate conclusions and speculations.The interest on the group, was increased by the dispute over the name with Greece, and thecases won at the European Court for Human Rights, which became landmark decisions in theCourt's jurisprudence linked with minorities, freedom of association and freedom of assembly.However, most of the literature focuses on political, rather than on legal dilemmas which aresurrounding the minority and does not present (sufficient) information on the current situation.Therefore, the scope of this analysis shall be the legal aspects and recent developments of thestatus of the minority, providing with brief information on the indisputable influence of politicalfactors. The study shall focus on compliance of the states under consideration, primarily withinternational but with national legal rules on minority protection, as well.The first chapter provides with overview of the main international instruments for minority rights.It shows how, even documents which refer to individual can be practical for protection ofnational, religious, ethnic or linguistic groups. In addition, the main emphasis is on the right toidentity of the group, despite the disputable collective dimension of minority rights.The second chapter is a concise introduction to the so called "Macedonian question" on theBalkan. It is included, because it gives a substantial historical and political background, necessaryfor a clearer comprehension of the origins of the current problems faced by the members of theMacedonian minority.The third, fourth, fifth and the sixth chapter present the minority in Albania, Greece, Bulgaria andSerbia and Montenegro, respectively. Each chapter has a part dealing with formal arrangementson minority rights and part which examines their implementation. The chapters on Greece andBulgaria have special section concentrating on the case law of the Strasbourg Court related to theMacedonian minority within their jurisdiction.The conclusion, summarizes the most important findings of the research, and advocates certainsolutions to the identified problems.CHAPTER 1-INTERNATIONAL INSTRUMENTS RELEVANT FOR THE PROTECTION OF MINORITYRIGHTSThe overview of the International instruments from which minorities can benefit is divided in twoparts, the first one focuses on the system in the United Nations, while the second one on theregional level, Europe in particular. I will illustrate how, many rights which are included ininstruments for protection of individuals, can be utilized by minorities as well, especially in lightof the fact that various provisions dealing specifically, with minority rights, do not relate tominorities as group but to the persons which are their members. In addition, the instruments shallbe analyzed mostly in the context of provisions, which are valid to the specific issues connectedto the Macedonians as a minority in the countries covered by the research.1.1Protection of minority rights in the United Nations system1.1.1Article 27 of the International Covenant for Civil and Political Rights 185"In those States in which ethnic, religious or linguistic minorities exist, persons belongingto such minorities shall not be denied the right, in community with the other members of185 International Covenant for Civil and Political Rights, [hereinafter referred to as ICCPR] available athttp://www.unhchr.ch/html/menu3/b/a_ccpr.htm39

their group, to enjoy their culture, to profess and practice their own religion, or to usetheir own language."On first reading, especially because the ICCPR focuses on individual rights, the article does notconfer any rights to minorities as a group, and merely imposes a negative obligation on the Statesnot to deny the rights enumerated. However, the Human Rights Committee in its GeneralComment on the Article, explained that the rights protected under the Article, depend on theability of the minority group to maintain its culture, language or religion and that positiveobligations by States may be necessary to protect the identity of the minority.(emphasis added) 186 .In that regard, as the rights stipulated are to be enjoyed by members of the minority, inherent inthe Article is the existence of a group 187 . Subsequently, it has been argued that it is clear that thearticle "enshrines a complete and absolute prohibition of forced assimilation and a right toidentity for minorities". 188 A certain political dimension of the right to identity could be includedin the scope of the Article, as well. 189 In addition, the General Comment on the Article insists onits positive nature and on its "horizontal" effect. 190 These aspects of the Article are furtherheightened by the obligations that the States have under Article 2 of the ICCPR, namely that theyshall respect all the rights recognized in the Covenant, to all individuals within their jurisdiction,without any distinction of any kind, including, among various grounds, race, language, religion,political or other opinion and national origin.1.1.2 The UN Declaration on the Rights of Persons Belonging to National or Ethnic, Religiousand Linguistic MinoritiesAlthough, as its name suggests, the Declaration is not legally binding on States, it is a significantcontribution to the existing body of norms for protection of minority rights. In the context of thepreviously elaborated identity issues, linked to minorities, the Declaration provides that thenational, ethnic, religious, linguistic or cultural identity shall be protected by the States and thatthey ( the States) shall encourage the conditions for the promotion of that identity. 191 Thisrequirement, that the States encourage the condition for promotion of the identity of minorities,would likely require positive measures by states to foster the development of such minorities. 192The group protection nature of the instrument, and the mandatory protection of existence andidentity, are evident by the use of the term "shall". 193 Subsequently, the Declaration guaranteesthe rights of participation of the persons belonging to minorities in a number of areas of publiclife, to form associations, expression of their culture, tradition and customs. Its collective186 Human Rights Committee General Comment on the Article 27 ICCPR, available athttp://www1.umn.edu/humanrts/gencomm/hrcom23.htm187 John R. Valentine, Towards a definition of national minority,32 Denv. J. Int'l L. & Pol'y 445 (2004)188 Kristin Henrard, DEVISING AND ADEQUATE SYSTEM OF MINORITY PROTECTION.INDIVIDUAL AND HUMAN RIGHTS,, MINORITY RIGHTS AND THE RIGHT TO SELF-DETERMINATION (The Hague/Boston/London:Martinus Njihoff Publishers, 2000) [hereinafter referredto as Henrard]189 Id190 Patrick Thornberry and Maria A.M. Estebanez, MINORITY RIGTHS IN EUROPE, (Council of Europepublishing, 2004)191 The UN Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and LinguisticMinorities, Article 1, available athttp://www.unhchr.ch/html/menu3/b/d_minori.htm192 See John R. Valentine, supra at 3193 Patrick Thornberry, THE UN DECLARATION ON THE RIGTHS OF PERSONS BELONGING TONATIONAL, ETHNIC, RELIGIOUS AND LINGUISTIC MINORITIES:BACKGROUND ANALYSISAND OBSERVATION, (Minority Rights Group, London, 1993)40

dimension is emphasized with Article 3, which provides that the rights of the persons, membersof the minorities, may be exercised individually as well as in community with the other membersof the group, without any discrimination. 1941.1.3 International Convention on the elimination of all forms of racial discriminationThis instrument is of relevance for minority rights, in so far as it defines racial discrimination ascovering national or ethnic origin. The states are obliged to eliminate discrimination andguarantees to everyone equality before law, without distinction on basis of race, color, national orethnic origin, in thee enjoyment of inter alia, political rights, other civil rights (freedom ofreligion, opinion and expression, peaceful assembly and association) as well as economic andsocial rights. 1951.2 Protection of minority rights in Europe1.2.1The Framework Convention for the Protection of National MinoritiesRegardless of the fact what its title may suggest, the Convention does not contain a definition of anational minority, nor it guarantees the rights in form that would imply group dimension. Theframework Convention is the first legally binding multilateral instrument devoted to theprotection of national minorities in general and contains mostly programme-type provisionswhich are not directly applicable, but leave the States discretion in the implementation of theobjectives which they have undertaken to achieve, thus enabling them to take particularcircumstances into account, implementing the principles is through national legislation andappropriate governmental policies. 196The Framework Convention gives the members of national minority a right to freely chooseto be treated as such (Article 3) and guarantees that no disadvantage shall arise from that choice.The Explanatory Report specifies that the objective criteria in that regard are linked to a person'sself-identity. 197 In turn, States do not have an unqualified right to determine which groups withintheir jurisdiction meet the criteria of constituting a national minority. 198 Article 5 guarantees theright of persons belonging to national minorities to maintain their culture and preserve theiridentity. 199 Article 7 guarantees the freedom of peaceful assembly, freedom of association,freedom of expression and freedom of conscious, thought and religion. In accordance with theExplanatory Report to the Convention, in Article 10, the recognition of the right of every personbelonging to a national minority to use his or her minority language freely and withoutinterference, confirms that it is particularly important. and is one of the principal means by whichsuch persons can assert and preserve their identity, which in turn enables them to exercise theirfreedom of expression. 200 In addition, the Convention pledges that the persons belonging tonational minorities have a right to learn their minority language (Article 14). This right is also oneof the principal means by which such individuals can assert and preserve their identity, and there194 Id195 International Convention on the elimination of all forms of racial discrimination, Article 5, available athttp://www.unhchr.ch/html/menu3/b/d_icerd.htm196 Explanatory Report to the Framework Convention on the Protection of National Minorities, available athttp://conventions.coe.int/treaty/en/Reports/Html/157.htm, [hereinafter referred to as Explanatory Report ofthe FCNM]197 Id198 See John R. Valentine, supra at 3199 The Framework Convention for the Protection of National Minorities, , [hereinafter referred to asFCNM] available at http://conventions.coe.int/Treaty/en/Treaties/Html/157.htm200 See Explanatory Report to the FCNM, supra at 1041

can be no exceptions to this, while the right to have education in that language, is subject tolimitations depending on the available sources of the particular State. 201 Although, there arearguments that the term used "framework", implies a decrease in the legal strength of theobligations undertaken by the States 202 , the Convention, is a major step forward in protectingminorities.1.2.2 European Charter on Regional or Minority languagesThe Charter does not provide with neither individual nor collective rights of the minorities, but itsobjective are to promote the regional or minority languages. 203 It functions upon a sliding- scale,the bottom end of the scale suggests the minimum right which members of a smaller, thoughsufficiently numerous, linguistic minority can expect, whereas the higher end of the scaleincludes more generous rights, in recognition of the larger number of individuals involved. 204None of the countries under consideration has signed neither ratified the Charter, and therefore,this analysis covers the basic aspects of the document. 2051.2.3 European Convention for Human RightsThe European Convention for Human Rights is an instrument which protects the rights of theindividuals. However, persons belonging to minorities can benefit from the Convention, throughits relatively effective system based on the jurisprudence of the European Court for HumanRights, indirectly. Namely, Article 14 prohibits discrimination in the enjoyment of the rights andfreedoms guaranteed by the Convention, on many grounds,, including language, religion, opinionand association with a national minority 206 (emphasis added). In this context, this article does nothave its distinct existence, but needs to be invoked in conjunction with other rights provided forin the Convention. In general, many so-called "minority" problems could be resolved through theeffective guarantee of "ordinary" human rights, such as the rights to life, personal security, nondiscrimination,and participation in a democratic political process. 207In addition, even when the Strasbourg Court does not specifically find a violation of Article14, it gives important arguments, on minority issues. Thus, in a decision regarding theMacedonian minority in Greece, in the Case of Sidiropoulos and others v. Greece , it wasarticulated that the existence of minorities was a "historical fact" which democracies must tolerateand even protect in accordance with international legal principles. 2081.2.4 1990 Document of the Copenhagen meeting of the Conference on the Human Dimension ofthe CSCE201 Id202 See Patrick Thornberry and Maria A.M. Estebanez, supra at 6203European Charter for Regional or Minority languages, available athttp://conventions.coe.int/Treaty/EN/Reports/Html/148.htm204 Fernand de Varennes, The Protection of linguistic minorities in Europe and Human Rights: Possiblesolutions to Ethnic Conflicts?, 2 Colum. J. Eur. L. 107 (1996)205Frckoski Lubomir, MEGJUNARODNO PRAVO ZA PRAVATA NA COVEKOT [International HumanRights Law], (Magor, Skopje, 2001)206 European Convention for Human Rights, available athttp://conventions.coe.int/treaty/en/Treaties/Html/005.htm207 See Hurst Hannum, infra at 25208 Case of Sidiropoulos and others v. Greece ( Application no. 57/1997/), Judgment, Strasbourg, 10 July1998, para 4142

The Copenhagen document deals with minority rights in its Part IV, again using the sameterminology, namely, that these are rights to be guaranteed to the persons belonging to theminorities, and not to the group as such.. The principles are vague in many respects and leave agreat deal of discretion to governments in considering minority questions, and in some aspectsbasically repeat existing provisions, but they are a significant achievement in efforts to defineminority rights in other international forums, including the United Nations. 209 Thus, the principlesprovide inter alia that the members of minorities have a right to freely express, preserve anddevelop their ethnic, cultural, linguistic or religious identity and while the States in turn have anobligation protect that identity of national minorities on their territory and create conditions for itspromotion 210 The document, enumerates a number of rights linked to the use of language, in lightof the fact that, that language usage, has been one of the tools for assimilation, but "the principleat stake is not use of language per se; it is rather the ability of a minority to preserve its culturaldistinctiveness, including its language, in a manner that is compatible with its relationship withthe majority society in which it lives" 211 , which further intensifies the above mentioned right toidentity of a minority. Furthermore, in paragraph 35 the States are obliged to respect the right ofpersons belonging to national minorities to effective participation in public affairs, includingparticipation in the affairs relating to the protection and promotion of the identity of suchminorities.CHAPTER 2-A NOTE ON THE "MACEDONIAN QUESTION" ON THE BALKANSIn order to apprehend the reasons that could explain the status of the Macedonian minority in theneighbouring countries of The Republic of Macedonia, this chapter shall be a brief note whichexplains the political and historical considerations associated with the status of the minority.Although the analysis in this paper is from the legal point of view, these considerations cannot bestrictly separated and are essential for understanding the substance of certain dilemmassurrounding the minority or the persons belonging to it.Macedonia, geographically consists of the Aegean Macedonia (North-western Greece),the Pirin Macedonia (now part of Bulgaria) and Vardar Macedonia ( on the territory of theRepublic of Macedonia). 212 After the Balkan Wars in 1912 and 1913, the part of the OttomanEmpire, at the time, was divided when Greece gain the Aegean part, Bulgaria the Pirin and Serbiathe Vardar, which was a start of a politics of assimilation and propaganda of the named countriesover the Macedonians, who still have not constituted their own State. 213 The Socialist YugoslavRepublic of Macedonia was formed in 1945 and the Macedonian people for the first time gain theformal status of nation, the Macedonian language was codified in its modern form and the OhridArchiepiscopy ( abolished in 1767) was renewed in 1967 as the Macedonian Orthodox Church.However, the existence of the separate Macedonian nation has been contested by Bulgaria,Greece and Serbia. Bulgaria, perceives the Macedonians to be ethnic Bulgarians, and especially209 Hurst Hannum, Contemporary development sin the International protection of the rights of theminorities, 66 Notre Dame L. Rev. 1431 (1991)2101990 Document of the Copenhagen meeting of the Conference on the Human Dimension of the CSCE,paragraphs 32 and 33, respectively, available athttp://www1.umn.edu/humanrts/osce/basics/copenhagen1990.html211 See Hurst Hannum, supra at 25212 See generally in ISTORIJA NA MAKEDONSKIOT NAROD [History of the Macedonian people],Institut za nacionalna istorija [Institute for national history-Skopje], ( Prosvetno delo, Skopje, 1972)213 Id43

insists on the similarities of the languages. From a Macedonian perspective, however, Bulgaria’sself-declared big brother status has more often than not been regarded with suspicion. 214For Greece, there is no "Macedonian question” regarding the "so-called 'Macedonian'minority"; but it rather refers to the fact that "Skopje appropriates" Greek history and traditionsand "usurps the Greek name of Macedonia" implying territorial claims” 215 Serbia’s position wasthat Macedonia is southern Serbia and that ethnic Macedonians are Serbs by origin, positionwhich has evolved to a formal recognition of a distinct Macedonian nation. 216 Albania, in turn,does not reject the existence of a Macedonian nation but given the relatively large Albanianpopulation in the Republic of Macedonia, objected to its constitutional structure 217 which after theOhrid Framework Agreement in 2001, resulted in a constitutional changes which fall withinArend Lijphart's concept of consociationalism, 218 The denial of separate existence of theMacedonian nation, is however, not a new phenomenon which occurred recently, based uponclaims that the nation was constituted by a decree of the Communist Party in Former Yugoslavia.A book written by one of the greatest intellectuals from (Aegean) Macedonia, which talks of thedistinctive features of the Macedonian language, the nation and the propaganda of Bulgaria,Serbia and Greece, published in Sophia, in 1903, was ceased and destroyed by the authorities(only ten copies were saved). 219As a result of Greece's opposition of the application of the name ‘Macedonia’ to any otherplace than northern Greece, and denial of the existence of Macedonian national minority, towhich it refers as Slavophone Greeks, Macedonia could not have diplomatic recognition unlessit changed its name. 220 These pressures amounted to an unprecedented shifting of a bilateral andpolitical problem, to a legal and international issue. Namely, the process of internationalrecognition of the young Macedonian state, besides the conditions set forth in the UN Charter,the conditions set for the other four former Yugoslav republics, two additional requirements weremade: to give constitutional guarantees that it has no territorial aspirations towards Greece in lightof the constitutional declaration for paying due regard to the status of the Macedonian minorityin the neighboring countries., and to change the name "Macedonia" 221 The first one was satisfiedby adoption of a Constitutional amendments, 222 and the second resulted with the acceptance of thestate in the United Nations, with the provisional name, Former Yugoslav Republic of Macedonia.Chapter 3-The Macedonian minority in Albania3.1 Legal framework for the protection of minority rights214 Jenny Engström, The Power of Perception: The Impact of the Macedonian Question onInter-ethnic Relations in the Republic of Macedonia, in The Global Review of EthnopoliticsVol. 1, no. 3, March 2002, 3-17, available athttp://www.ethnopolitics.org/archive/volume_I/issue_3/engstrom.pdf215 Kathimerini (March 4,1990), cited from Evangelos Kofos, infra at 142216 See Jenny Engström, supra at 30217 Id218See Constitution of the Republic of Macedonia, available athttp://www.mlrc.org.mk/ustav_i_amandmani.htm219 Krste Petkov Misirkov, ZA MAKEDONCKITE RABOTI [On the Macedonian matters], ( MaticaMakedonska, Skopje, 2002, Reprint)220 See Jenny Engström, supra at 30221 Svetomir Skaric, MAKEDONIJA NA SITE KONTINENTI [Macedonia on all continents], (UnionTrejd, Skopje, 2000)222 See Constitution of the Republic of Macedonia, supra at 3444

Historically, the 1946 Constitution guaranteed equality and prohibited discrimination on thegrounds of nationality, race and religion, proclaimed protection of the cultural development of thenational minorities and the free use of their language 223 Subsequently, the 1976 Constitutionadded the right of the minorities to study their language at school, guaranteed to them equality inall areas of social life and proclaimed that any discrimination which violated the rights ofminorities is unconstitutional and that it will be punished. 224 The same Constitution outlawedreligion, and under the 50 year long communist dictatorship, Albania was the only country in theworld with a Constitutional prohibition of freedom of conscience and religion, and wasproclaimed to be the first atheist state in the world. 225The existing basic norms which are of significance for the legal and institutional status ofminorities are to be found in the Albanian Constitution of 2003. 226 This legal act of paramountimportance, guarantees equality before the law to all persons and prohibits discrimination onnumerous grounds, including race, religion, ethnicity, language, political, religious orphilosophical beliefs (Article 18). In addition, in the Chapter II- Personal Rights and Freedoms,the Constitution guarantees freedom of expression and prohibits censorship. 227 The 2003Constitution guarantees freedom of religion and conscious, the right to choose and to changereligious beliefs, as well as to express them in public or private (Article 24) and asserts that theState is neutral in matters of religion recognizing the equality of religious communities,concurrently in Article 10. Another noteworthy aspect of the Constitution is Article 17, whichstipulates that the constitutional limitations of the guaranteed rights and freedoms may notinfringe the essence of the rights and freedoms and in no case may exceed the limitationsprovided for in the European Convention on Human Rights. Besides, the basic human rights andfreedoms which are of substance for minorities as well, the constitutional framework is completedwith a section which explicitly guarantees that persons belonging to national minorities shallexercise human rights and freedoms in full equality before the law in addition to the right tofreely express, preserve and develop their "ethnic, cultural, religious and linguistic belonging". tohave education in their mother tongue and to form associations for protection of their interestsand identity. 2283.2 Implementation of minority rights|: identifying positive trends and problemsUnlike in Greece and Bulgaria, the Macedonian national minority is recognized that it exists inAlbania. Namely, Albania recognizes as national minorities the Macedonian, the Greek and theMontenegrin in line with the understanding of national minorities as those groups, which havetheir own motherlands with which they have common characteristics such: the spiritualconstitution, the language, culture, customs and traditions, religious belief, etc. 229During the 1945-48 period, the Macedonian national minority was recognized as such,had opportunities to freely express culture and to use mother tongue 230 . The 1975 administrative223 Vladimir Ortakovski, MINORITES IN THE BALKANS,p.300 (Stip, Vtori Avgust, 1998)224 Id, Ortakovski225 Milco Balevski, ALBANIJA DENES [Albania today], (Matica Makedonska, Skopje, 1998)226 Constitution of Albania, approved by the Parliament on 21 October 2003, available at the web site ofthe Albanian Council of Ministershttp://www.keshilliministrave.al/english/kushtetuta/kushtetuta%20e%20Shqiperise%201.htm227 Constitution of Albania 2003, § 22228 Constitution of Albania 2003, § 20229 Report submitted by Albania pursuant to Article 25 of the Framework Convention of NationalMinorities, 2001, available athttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/1st_SR_Albania.asp#TopOfPage, [hereinafter referred to as 2001 Report]230 See Ortakovski, supra at 3945

Decree introduced changing of names and surnames which were "inappropriate" and "offensive",followed by a issuing of a Lexicon on the names of people, prepared by the Institute for AlbanianLanguage, which included names which can and should be given to all newborn children,regardless of national, racial or other belonging, but in effect it specifically targeted the membersof the minorities 231 . Furthermore, Decree No.225 in 1975 instigated the changing of names thathave religious connotations, while the 1979 Decree5.912 provided for internment of those who"represent a danger to the social system" ,used to diffuse the minorities throughout the countrywith an aim to reduce their rights, in light of the fact that the education in mother tongue up tofourth grade was possible only in villages settled entirely with minorities and if they were in asufficient number. 232 The change of names and toponomy, is a practice adopted in Greece as well.As regards names, it can be argued that this is a direct intervention in what is, by its very nature,an extremely private affair. 233The 1989 census in Albania showed that only 64.816 or 2.0 % of the population arenational minorities, and it is the last one, which gives information on the national minorities,since the 2001 census did not include declaration on nationality and religion. 234 The Governmentclaims that there are approximately 5, 000 persons belonging to the Macedonian national minorityliving mostly in the region of Mala Prespa. However, Macedonian sources allege that there areMacedonians living in other parts of Albania, as well, but which still have not had the opportunityfor national identification and that the number is much bigger, than the one officially presented. 235Nevertheless, the minority practices ( through its members) the freedom of association, and has anumber of organizations such as "Prespa", "Mir" (Peace), "MED" and "Gora", which since 2002are organized in "Association of the Macedonians in Albania", still not registered by theauthorities. 236 In addition, after three delays, the court in Tirana, registered recently, the firstpolitical party of the Macedonians -"Macedonian Alliance for European Integration" which shallstrive that the members of the minority living in the areas of Gora and Golo Brdo and in otherareas where there is large percentage of Macedonians, are acknowledged as a national minority,and to get education in their mother tongue ( the benefits of minority rights are limited to the socalled "minority zones", and in the case of the Macedonians, that is only the Mala Prespa region),as well as for a better participation in the state institutions. 237 The regions were the minority lives(Mala Prespa, Golo Brdo, Gora and others) are one of the least developed in the country, and theorganizations of the minority are requesting for financial help from the state in the fields ofculture, infrastructure and for creating minimal conditions for economic development. 238 Theright to participation (which is ensured through freedom of association, expression, the formingof the political party of the Macedonian minority) is meaningless unless a group has the abilityand the resources to exercise it and where minorities have been economically or sociallydisadvantaged, unless special programmes, such as educational facilities, access to the public231 See Balevski, supra at 41, p259232 Ortakovski, supra at 39, p.301233 See Varennes, supra at 20234Report submitted by Albania supra at 45235 Fakti za Makedonskoto Nacionalno Malcinstvo vo sosednite zemji[ Facts on the Macedonian NationalMinority in the Neighboring Countries,] given to author by the Ministry of Foreign Affairs of the Republicof Macedonia[hereinafter referred to as Facts on MNM]236 Id Facts on the MNM,237 Dnevnik, 9 June 2005238 Facts on the MNM supra at 5146

service, or sometimes 239 special financial loans, are established to enable them to catch up withother communities, the disparities between them and others increase. The lack of financialresources is a problem for the functioning of the newly established Special State Committee onMinorities tasked with making recommendations to the government with respect to the promotionof the rights of minorities in all fields of life, composed of one member of the three officiallyrecognized national and the two linguistic minorities (Vlach and Roma). 240Chapter 4-The Macedonian minority in Greece 2414.1 Legal framework for the protection of minority rightsOn the international level, Greece has accepted many international instruments which are relevantfor minority rights .However, it has still not made a declaration on Article 14 of the UNConvention on the Elimination of All forms of Racial Discrimination., which allows theCommittee for the Elimination of Discrimination to consider individual communications.Furthermore, it has signed but not yet ratified the Framework Convention for the Protection ofNational Minorities, and in addition the authorities have not signified an intention to sign andratify the UNESCO Convention against Discrimination in Education or the European Charter forRegional and Minority Languages. 242 In this context, it is important to emphasize that the relationbetween national and international law are regulated by part three of the Constitution of Greece(Organization and Functions of the State). 243 Thus, Article 28, paragraph 1, stipulates thatinternational conventions and generally recognized rules of international law, when ratified forman integral part of and take precedence over national legislation.The national framework is naturally based upon the set of provisions in the Constitutionadopted on June 11th, 1975, in which individual and social rights are regulated within the parttwo. Thus, article 4(1) of the Greek Constitution provides with a basic equality clause that allGreeks are equal before the law. 244 Furthermore, the constitutional provisions regulate that allpersons have the right to freely develop their personality and participate in the public life's aslong as they do not infringe the right of the others. 245 The principle of equal treatment. isguaranteed, by providing that all the persons living in Greece enjoy full protection of life andliberty, irrespective of their nationality, race or language and of religious or political beliefs, andthat exceptions are permitted only in cases provided by international law. 246Further articles, which may be of a relevance to minorities residing in Greece, are article 11 and12, which guarantee the right to peaceful assembly, and the right to form non-profit associations,in compliance with law, respectively. Freedom of religion is guaranteed in article 13, which reads239 Yash Ghai, PUBLIC PARTICIPATION AND MINORITIES, (London, Minority Rights GroupInternational, 2003)240 Third Report on Albania, ECRI, 2005, available at http://www.coe.int/T/E/Human_Rights/Ecri/1-ECRI/2-Country-by-country_approach/Albania/Albania_CBC_3.asp#P75_4025241 Due to reasons explained below, Greece refers to the minority as "Slavophone Greeks" or"Slavo-Macedonians", I shall simply call them Macedonian minority242 European Commission against Racism and Intolerance, Third Report on Greece, available athttp://www.coe.int/t/E/human%5Frights/ecri/1%2DECRI/2%2DCountry%2Dby%2DCountry%5Fapproach/Greece/Greece_CBC_3.asp#P103_11509243 Greek Constitution, available at the website of the Greek Ministry of Justice,http://www.ministryofjustice.gr/eu2003/constitution.pdf244 Id245 Article 5(1), Greek Constitution 1991246 Article 5(2) Greek Constitution 199147

that the enjoyment of civil rights and liberties does not depend upon individual religious beliefs.However, mainly due to the special relations between the States and the Greek Orthodox Church,regulated in the Constitution in its first part, there have been many applications lodged withrespect to Greece at the European Court of Human Rights. 247 Accordingly, article 14 protects thefreedom of expression, while its third paragraph enumerates the exceptions of the constitutionalprohibition of seizure of newspapers and publications.As to the citizenship question, in accordance with the Constitution in article 4 (3), citizenshipmay be withdrawn only in case of voluntary acquisition of another citizenship or of undertakingservice contrary to national interests in a foreign country, under the conditions and proceduresmore specifically provided by law. Based on the former article 19 of the Citizenship Act manyMacedonians have been stripped off their citizenship, and have lost their property, which shall bediscussed in more detail below.In addition to the Constitutional provisions, Greece has adopted a number of laws, whichprovide with certain rights for the minorities, but all of them are only available to the Muslimminority in Greece. This is due to the fact, that Greece invokes the Lausanne Treaty of 1923according to which in Greece, there is only a Muslim minority. 248 In addition, the only case ofpositive discrimination formally provided for by the legislature concerns this minority. 249The Code of Civil Procedure 250 and the Code of Penal Procedure 251 include provisions on theuse of language (appointment of an interpreter), but they are applicable when a subject in theprocedure does not sufficiently know the Greek language. Thus, the Macedonian minority cannotbenefit from this rights, and even more in light of the fact that the Greek authorities in 1982adopted a decree which declared the Macedonian language as "internationally unrecognized" 2524.2 Implementation of minority rights: identifying positive trends and problemsThe official attitude of the Greek authorities toward the Macedonian minority can be brieflysummarized by the response of the government to the Third report on Greece, by the EuropeanCommission against Racism and Intolerance ( hereinafter referred to as ECRI):“Indeed 2.500.000 Greeks who live in Greek Macedonia identify themselves asMacedonians ( Makedones). The use of the term 'Macedonian minority' by a smallnumber of Greeks in Northern Greece speaking a Slavic idiom, usurps the name and theidentity of the above vast majority of Greek Macedonians"247 See Case of Serif v Greece, Application no. 38178/97, Strasbourg, 16 December 1999; Case of Larissisand Others v. Greece, Application nos. 23372/94;26377/94;26378/94, Strasbourg 24 February 1998; Caseof Canea Catholic Church v. Greece, Application no. 25528/94, Strasbourg. 16 December 1997, Case ofKokkinakis v. Greece, Application no. 14307/88,Strasbourg, 25 May 1993248 Human Rights Watch/Helsinki, DENYING ETHNIC INDENTIY: THE MACEDONIANS INGREECE, 1994, available at http://www.hrw.org/reports/pdfs/g/greece/greece945.pdf249 European Monitoring Centre on Racism and Xenophobia, ANTI-DISCRIMINATION LEGISLATIONIN EU MEMBER STATES, available athttp://europa.eu.int/comm/employment_social/fundamental_rights/pdf/aneval/legel.pdf250Article 252, Code of Civil Procedure, unofficial translation available athttp://www.ciemen.org/mercator/butlletins/44-20-gb.htm251 Article 233, Code of Penal Procedure, unofficial translation available athttp://www.ciemen.org/mercator/butlletins/44-19-gb.htm252 Balevski, Milco, SOSEDSKI MITSKI PAJAZINI [Neighborly webs of myth],( Nova Makedonija,Skopje,1994)48

This position by the Greek government leads to the basic problem faced by the minority inGreece. Namely, they deny the national identity of its members and claim that the group does notspeak a separate language. On the contrary, the officials tend to perceive them as Greeks whospeak a Slavic idiom. Thus, there are studies, which elaborated, “the distinct Slavic dialect spokenin certain villages in Greek Macedonia does not necessarily certify the existence of an ethnicminority." 253 On the other hand, there are authors, which confirm that there is a sizeablepopulation in Greece which has a separate ethnic identity and which was put under a number ofmeasures for assimilation. 254 One of the explanations for the non-recognition of the minority is"that the problem is not the fact that people of Slavonic-speaking origin wish to belong to, andfunction as, an ethnic or national minority; it is the name they have chosen —Makedones in theGreek language" which is used to "define the Greeks inhabitants of Greek Macedonia in theregional and cultural sense of the term." 255 Even if we accept this claim, it cannot be maintained,that the occurrence in the early 1990s, of "a small group of Slavonic-speaking activists,presenting themselves as representatives of a (Slav) Macedonian minority" is collateral dimensionof the dispute over the name. 256 In addition, some scholars argue that denial on the part of theGreek government that a Slavic cultural or ethnic group exists in the northern region contributedto the "rise in pro-FYROM Macedonian national identification and sentiment among Slavicspeakersin Greece". 257After the First World War, on the basis of 1920 Treaty of Sèvres Greece was obliged tospecial protection of its minorities, which guaranteed equal rights regardless; of nationality,language and religious beliefs. 258 Based upon obligations toward the minorities which had beendefined by this treaty, Greece introduced the Abecedar. Following the decision to employ thelocal Slavic dialect(emphasis added) in the minority schools, the Greek government entrusted to athree-member committee of specialists the preparation of a primer for "the Slavic speakingpopulation" , that became known as the “Abecedar (in Latin alphabet, and not Cyrillic) .” 259Iakovos D. Michailidis underlines that the Abecedar was never accepted by the local population,and was therefore this "experiment never undertaken". 260 In addition, it is maintained that even ifthe Abecedar was successful, the "Slav-Macedonian" , like any other traditional language, hadfew if any chances to compete effectively with the official state language which secures economic253 Vlassis Vlassidis, Veniamin Karakostanoglou, Recycling propaganda: Remarks on Recent Reports onGreece's "Slavo-Macedonian" minority, in Balkan Studies, Vol. 36/1, Thessaloniki 1995, pp. 151–170.available at http://www.datatone.com/~angelos/Vlasidis.htm254 See generally, Hugh Poulton, THE BALKANS: MINORITIES AND STATES IN CONFLICT,(Minority Rights Publications, London, reprint 1994)255Evangelos Kofos, THE UNRESOLVED "DIFFERENCE OVER THE NAME": A GREEKPERSPECTIVE, in (Kofos and Vlasidis eds., Athens-Skopje: An uneasy symbiosis, 1995-2002, HellenicFoundation for European and Foreign Policy (ELIAMEP), Athens, 2003[hereinafter referred to as Kofoseds.]256 Id, Kofos eds.257 Anastasia Karaksidou, Contending Nationalisms in the Macedonian Controversy, in The Politics ofviolence Vol. 1, No. 1( Spring 1996), available at http://www.hfg.org/hfg_review/1/karakasidou-2.htm258 Frckoski et al, MEGJUNARODNO JAVNO PRAVO, [Public International Law] (TabernakulSkopje,1994)259Iakovos D. Michailidis, Minority Rights and Educational Problems in GreekInterwar Macedonia: The Case of the Primer “Abecedar”, in Journal of Modern Greek Studies Volume14.2 (1996) 329-343, available athttp://muse.jhu.edu/journals/journal_of_modern_greek_studies/v014TL/14.2michailidis.html260 Id49

and social advancement. 261 However, the primer was issued in typical Macedonian form, whichclearly shows that the Greek authorities were precisely distinguishing the linguistic and nationalpeculiarities of the Macedonian minority. 262 This is especially relevant in light of the attempts tochallenge the existence of the minority by asserting that it has always been perceived as ofBulgarian descent, rather than “Slavo-Macedonian”. 263Human Rights Watch 264 notes that a Decree No. 332 of 1926 ordered the Slavic names oftowns, villages, mountains and rivers changed to Greek names , Law No. 87 of 1936 orderedMacedonians to change their names to Greek names, while on July 15, 1927, there was adecree ordering the erasure of all old Slavic inscriptions from churches; and upon which churchservices in the Slavic language were forbidden, and Slavs (Macedonians) were forbidden to usethe Slavic (Macedonian) language. The Macedonian language was banned even in personalcommunication between parents and children, among villagers, at weddings and work parties, andin burial rituals. 265 Some authors argue that this were practices which were normally followed inby nation-states. 266 However, as the toponomy remains unchanged up to present, it can bechallenged with the argument that under Article 27, the state can require the use of names it haschosen in official activities or areas, the individual use of toponomy in a minority language fornon-state functions should be free of state intervention. 267In 1959, The Government passed a law on forced giving of statements of loyalty, and inaccordance with this law the population in villages near Lerin (Florina), Kostur (Kastoria) andKailari was asked to publicly confirm that it did not speak Macedonian. 268 There are positionsaccording to which the oaths were taken by villagers after church service "under yet unknowncircumstances, probably at the initiative of local officials" in no more than three villages and thatthey were discontinued once they became known to authorities in Athens. 269 These acts werefollowed by an internal regulation which in 1967 banned the use of the Macedonian language anda Constitutional act depriving the Macedonians of their citizenship. 270 Besides these formal legalrules, in 1982 there was a confidential document by the Greek Ministry of public order, sector fornational security which insisted not to employ "Slav speakers" in public services in the Florina(Lerin) region. 271 The document contained information that the "Skopje idiom" was widely usedin the region of Florina and Edessa ( Voden), even by administrative employees, and that it wasestablished practice to perform songs, music and traditional dances "from Skopje." 272 Efforts aremade to diminish the effect of this document, by asserting that it was just a bundle ofrecommendations by a national security official, and that there was no evidence if it has ever beentranslated into governmental policy. 2734.2.1 Citizenship, repatriation and restoration of propertyCitizen is “a person who, by either birth or naturalization, is a member of political community,owing allegiance to the community and being entitled to enjoy all its civil rights and protections;261 Vlassidis and Karakostanoglou, supra at 66262 See Balevski, supra at 68263 On the contestations of the separateness of the minority’s identity see generally Dean M. Poulakidas,Macedonia : far more than a name to Greece, 18 Hastings Int’l & Comp. L. Rev. 397264Human Rights Watch/Helsinki, supra at 64265 John Shea, MACEDONIA AND GREECE: THE STRUGGLE TO DEFINE A NEW BALKANNATION, 1997 London: McFarland & Co266 Vlassis and Karakostanoglou, supra at 69267 See Varennes supra at 20268 See Ortakovski, supra at 39269 Vlassis and Karakostanoglu, supra at 69270 Id,271 Balevski, supra at 68272 Id273 Vlassis and Karakostanoglu, supra at 6950

a member of the civil state, entitled to all its privileges" 274 In light of this defintion, whenanalyzing the citizenship issues, it is important to point out that the Greek legal orderdifferentiates among Greeks by origin (homogeneis,) , who are considered as Greeks regardless oftheir citizenship status, and Greeks who do not have Greek national descent (alogeneis), non-Greek even if they posses Greek citizenship 275 The use of the concept of allogeneis was the mostcommon method for depriving both ethnic Turks and to a lesser extent, ethnic Macedonians ofGreek citizenship, during the second half of the twentieth century. 276During the Civil War (1946-49) in Greece, the Macedonians were fighting on the side of theCommunists, and as they were seen as potentially disloyal to the Greek state, on October 1, 1947Greece passed a decree for the withdrawal of their citizenship. 277 As a consequence of the DecreeNo. 2536 of August, 23, 1953 numerous Macedonians- refugees from Greece - were deprived oftheir Greek citizenship and their properties were confiscated. 278The Greek Nationality Law, Article 19 (repealed in 1998) read:"a person of non-Greek ethnic origin, who has left Greece with no intention to return,may be declared as having lost Greek citizenship. This also applies to an allogenis bornand domiciled abroad. His/her minor children living abroad may be declared as havinglost their Greek citizenship if both their parents and their surviving parent have lost it aswell. Decisions on these matters are reached by the Interior Minister, with the concurringopinion of the Citizenship Council" 279When it comes to repatriation, Greece passed the Law 3370/1955 on the Greek nationalityand Ministerial decree No 106841/29 Dec. 1982 on the free repatriation and return to Greekcitizenship of political refugees of the Greek Civil War. However, the acts are criticized that they"both accept as a criterion ethnic identity (genos) of the citizens and apparently contradict theGreek Constitution" 280 . In practical terms, they discriminate on grounds of ethnic origin, so inorder to apply for Greek citizenship; one would have to express possessing a Greek nationalidentity. In the Constitution, there is a basic constitutional equality clause, which guarantees "fullprotection of life, honour ad liberty irrespective nationality, race or language and of religious orpolitical beliefs" and exceptions from it are allowed only in accordance with international law.(Article 5, paragraph 2). In addition, the International Convention for Elimination of all Forms ofRacial Discrimination, which Greece has ratified, in Article 5, obliges the states not todiscriminate and ensure full equality before the law in the enjoyment of certain rights, includingthe right to nationality. In that context, though the granting of citizenship is clearly a state'sprerogative, in the sense that the state is not obligated to grant it to any individual, once the statehas established a naturalization process, it must respect the human rights to equality and nondiscriminationin its policies, 281 which is applicable to restoration of citizenship as well.The realisation of property rights of Macedonians in Greece was hindered with the passing ofLaw No. 1540 in 1985.282 The right to property is regulated in Article 17 of the Greek274 BLACK’S LAW DICTIONARY 237 (7 th ed. 1999).275 Konstatinos Tsitselikis, Citizenship in Greece: Present challenges for future changes,, University ofMacedonia, Thessalonica, Greece, available at http://www.kemo.gr/gr/index.asp [hereinafter referred to asTsitselikis, Citizenship]276 Id, Tsitselikis, Citizenship277 See Ortakovski, Vladimir, supra at 39278 Id,279 See Tsitselikis, supra at 90280 Vlassis Vlasidis, Veniamin Karakostanoglou, supra 69281 See Fernand de Varennes, supra at 20282 See, Ortakovski , supra at 3951

Constitution, which stipulates that "no one shall be deprived of his property except for publicbenefit which must be duly proven, when and as specified by statute and always following fullcompensation corresponding to the value of the expropriated property at the time of the courthearing". Apparently, these constitutional provisions have a questionable application as regardsthe Macedonian minority in Greece.Nevertheless, there are attempts not to justify the instruments, but at least to perceivethem in light of "the Macedonian question on the Balkans, its special and complex relation to theGreek Civil War, when Greek Macedonia became the target of Yugoslav territorial expansionismusing Slav-Macedonian activists in Greece as a vehicle for these aspirations" 283 .Thus, Kofosargues that the return to Greece of thousands of people "with a deeply entrenched Slav-Macedonian consciousness and attitude" may not be perceived as repatriation., but as an"arbitrary transplant of an alien nationalist minority" . 284 The result of a possible repatriationwould be:- Creation of risks of conflicts,- The domino effect, meaning that similar claims would arise from Albanian Chamrefugees , Bulgarian political exiles as well as from the Thrace and Turkish Muslims- Inevitable mini cultural war at the prize of the history, the culture and the very name ofMacedonia. 285However, legally speaking there must be recognition that the majority should be subjected to therestraint of fundamental human rights or the desire to arrive at a political compromise thatrecognizes minority interests. 2864.3 Case law of the European Court for Human Rights related to the Macedonian minority inGreeceIn the two cases under analysis, the Court found a violation of freedom of association, and in thesecond of the right to fair trial as well. With no ambition to generalize, it can be argued that thefindings of the Court raise issues, in view of the obligation not to discriminate in the enjoymentof freedom of association under the Convention for Elimination of All forms of RacialDiscrimination (Article 5). Furthermore, as it was indicated in the overview of internationalinstruments, there is an obligation on the states to respect the right set forth in the ICCPRregardless of, inter alia, language, political or other opinion and national origin. Article 14 of theICCPR guarantees the right to be tried without undue delay, which is relevant for Ouranio Toxocase, while freedom of association is covered in Article 22.4.3.1 The Case of Sidiropoulos and others v . GreeceThe Court in Strasbourg has found a violation of freedom of association by the Greek State,because of the refusal of the national courts to register an association of the Macedonian minorityin Greece. 287 The applicants wanted to form a non-profit association called "Home of Macedonian283 Id, supra at 11284 Evangelos Kofos, Unexpected initiatives : Towards the resettlement of a Slav-Macedonian minority inMacedonia?, To Vima, June 25, 2003285 Id286 See Fernand Varennes, supra at 20287 Case of Sidiropoulos and others v. Greece ( Application no. 57/1997/), Judgment, Strasbourg, 10 July1998 [hereinafter referred to as Sidiropoulos]52

Civilization" with headquarters in Florina (Northern Greece), which was supposed to deal withpromotion of the culture of the minority in Greece. However, their request was refused by theCourt of First Instance in Florina because the "true aim of the association was a promotion of theidea that there is a Macedonian minority in Greece, which is contrary to the country's nationalinterests, and consequently contrary to law." This conclusion was based upon writings innewspapers which provided with information that the applicant took part in the Conference ofSecurity and Co-operation in Europe, where they maintained that there is a Macedonian minorityin Greece, and that one of the applicants in former court proceedings refused to accept that he wasGreek 288 The Sallonica Court of Appeal, refused the complaint lodged by the applicants, and heldthat the very name of the association envisages specifically Slavic civilization which does notexist in the region, and that the purpose of using the term "Macedonian" showed intention of thefounders to undermine Greece's territorial integrity. 289The Strasbourg Court had no problems in establishing that the refusal to register theassociation had amounted to inference with freedom of association. 290 It then went on to examineif the interference has been "prescribed by law", and found that this requirement was satisfied.Subsequently, it was the protection of national security and preventing disorder that were held tobe "legitimate aims", and not the objective raised by the Government of upholding Greece'scultural traditions and historical and cultural symbols 291 The last part of the test, was to determineif the interference was "necessary in a democratic society", by the Courts jurisprudence, thispresupposes that there was "a pressing social need" and that the means are proportional to thatneed. In this context, the Court explained:"That citizens should be able to form a legal entity in order to act collectively in a filed ofmutual interest is one of the most important aspects of the right to freedom of association,without which that right would be derived of any meaning. The way in which nationallegislation enshrines this freedom and its practical application by the authorities revealthe sate of democracy in the country concerned." 292It went on to emphasise that only convincing and compelling reasons can justify restrictionsto the freedom of association, and that in the same time in determining if the necessity defined inArticle 11, paragraph 2 exists, have "only a limited margin of appreciation". 293 Subsequently, thejudgement reaffirms that is primarily the national courts role to asses the evidence, but however,notes that it is by giving decisive influence in the outcome of the case on press articles, and bygiving regard to the political dispute between Greece and FYROM, domestic courts held that theassociation as a danger to Greece's territorial integrity. This amounted to "mere suspicion" on thetrue intentions of the applicants. 294 Without the threatening nature, it is quite possible that theEuropean Court's analysis could have ended with a determination that there was no legitimate aimin denying the application. 295 It was also underlined that it was possible that an association canhave aims, other then those in memorandum, but in the present case, it was impossible to288 Sidiropoulos, para 10289 Sidiropoulos, para 11290 Sidiropoulos, para 31291 Idem, para 37292 Idem, para 40293 Idem, para 40294 Idem, para 45295Lance S. Lehnhof, Freedom of religious association: the right of religious organizations to obtain legalentity status under the European Convention, 2002 B.Y.U. L. Rev. 56 (2002)53

determine because the association did not have time to take any action, and that according to theGreek constitution forming of associations cannot be subjected to prior authorization. 296 TheEuropean Court for Human Rights consequently held that the last part of the test was notsatisfied, namely the "refusal to register the applicant's association was disproportionate to theobjectives pursued", and this constituted a violation of Article 11 of the ECHR.One of the most important aspects of this judgment is the fact that it stresses, "the existence ofminorities and different cultures in a country is historical fact that a democratic society has totolerate and even protect and support according to the principles of international law." 2974.3.2 The case of Ouranio Toxo and Others v. GreeceThis case is about the political party of the Macedonians in Greece, called Rainbow founded in1994, which was from the very beginning not welcomed, and not only by the local population.Thus, Kofos argues that the activists of the party "chose to be identified as a distinct ‘national’group, a part of the ‘Macedonian nation’ —the Makedonci" and this was "supported, if notprompted of by pro-minority activists in Greece and abroad, as also by the Slav Macedoniannationalists in FYROM". 298 In addition, it is said that the poor results of the party at electionsdemolished the myth of demolished the myth of a sizeable and ‘oppressed’ minority. 299When the party established its headquarters in Florina, 1995 it affixed a sign with the party’sname in the two languages spoken in the region, Greek and Macedonian, on its premises. Theyincluded the word “vinozito”, written in the “Slav alphabet”, which means “rainbow” inMacedonian, but was also the rallying cry of forces who had sought to take the town of Florinaduring the civil war in Macedonia. 300 The priests of the church in Florina and town council calledthe population on protests against the party, and on the following night, the police removed thesign, while after midnight the headquarters have been broken into by a number of people. 301 Theydid so, ostensibly, because the sign contained Cyrillic "(i.e., Slavic) lettering", which is oftenregarded in Greece as somehow threatening to national solidarity. 302In the Chamber judgement Ouranio Toxo and Others v. Greece 303 . The Strasbourg Courtunanimously found violation of the right to fair trial (Article 6, paragrapgh1 of the ECHR), onaccount of the length of the proceedings, and a violation of the freedom association and assembly( Article 11 of the ECHR). First, the Court held that the fact that the procedure lasted for sevenyears and one moth, solely for the investigation of the case, in light of the facts of the case, wasexcessive and was in contravention with the requirement of "reasonable time". In addition, whatconcerns the freedom of association, the Court noted that Rainbow (Ouranio Toxo) was a legallyconstituted party of the Macedonian minority in Greece and putting a sign to the front of itsheadquarters with the party’s name written in Macedonian could not constitute in itself a presentand imminent threat to public order. Furthermore, although it acknowledged that the use of the296 Idem, paras 45-46297 Idem, para 41298 See Kofos eds, supra at 71299 Id300 Case of Ouranio Toxo (The Rainbow Party) and Others v. Greece, (Application no. 74989/01)Judgement, Strasbourg, 20 October 2005,The judgement is available only in French, so this analysis isbased upon a summary by the Registry of the Court, available athttp://www.echr.coe.int/Eng/Press/2005/Oct/ChamberjudgmentOuranioToxovGreece201005.htm#_ftn1[Hereinafter Ouranio Toxo summary]301 Case of Oranio Toxo summary302 See Anastasia Karaksidou, supra at 73303Case of Ouranio Toxo (The Rainbow Party) and Others v. Greece, supra at 9754

term "vinozhito"(rainbow) could possibly offend the political views of the majority in Florina, theStrasbourg court stressed that the risk of causing tension within the community could not in itselfjustify interference with freedom of association. 304 What is important in representing the attitudeof the authorities towards the Macedonian minority, the judgment points out that they actedcontrary to their roles as promoters of democratic values, and have "clearly incited the townpopulation to gather in protest and had thus helped to arouse the hostile sentiment of a section ofthe population against the applicants." Another aspect of the reasoning of the Court is useful forthe purposes of this paper. Firstly, it is emphasized that the police could have foreseen the dangerof violence and the violations of the freedom of association, but failed to undertake appropriatemeasure, for an alleged lack of manpower, for which the Greek Government had not providedany explanation despite the fact that the when the incidents were foreseeable. 305 Secondly, it isnoted that it was the applicants who lodged a complaint to open investigation, and not the publicprosecutor, which is not in line with the duty of competent authorities to take effectiveinvestigative measure when freedom of association is violated by individuals. 306 Furthermore, itwas the applicants who have been prosecuted for "sowing discord among the local population”but were acquitted in 1998. 307Expressions of Slavic cultural or ethnic distinctiveness are not tolerated in north-westernGreece, and persons who utter about such differences are labelled by Greek nationals as traitors,specifically as "Skopians," a derogatory term used for Macedonia and its citizens and they arestill continue marginalized in the economic life of the region, many facing discrimination in thejob market. 308 In addition, “cross-border interaction and exchange among the region's minoritymembers, including those living in Greece but with relatives in the FYROM, is discouraged andthose who cross the Greek-FYROM border are reported to Greek security agencies.” 309CHAPTER 5-THE MACEDONIAN MINORITY IN BULGARIA5.1 Legal framework for the protection of minority rightsThe Bulgarian Constitution of 1991 makes no explicit mention of the concept of "nationalminority". 310 In Judgment 2 of 18 February 1998, the Constitutional Court elaborated that there isno definition of the term in international law as well, that the notion national minority was a termof convenience, and that it was not necessary for every term of convenience to be present in theConstitution for its constitutional validity to be recognised. 311 However, the equality clause inArticle 6, paragraph 2 among the grounds for non-discrimination enumerates "race,nationality 312 , ethnic self-identity, sex, origin, religion, education, opinion, political affiliation,personal or social status or property status." (emphasis added). Historically, the 1947 Constitution304 Id305 Id306 Id307 For reactions of the public, articles from newspapers, statements during the procedure of the trial of theleaders of Rainbow, see generally in GREECE AGAINST ITS MACEDONIAN MINORITY: THERAINBOW TRIAL, Greek Helsinki Monitor ( Etepe, 1998)308 See Anastasia Karaksidou, supra at 73309 Id310 Bulgarian Constitution, State Gazette No 56/13.07.1991, available at the web site of the BulgarianInstitute for Legal Development, http://www.bild.net/legislation/311 Decision No. 2 of 18 February 1998, Bulgarian Constitutional Court para 7-11available athttp://www.bild.net/ccourt/1998/2_18_2.htm (in Bulgarian) [hereinafter referred to as Decision 2/1998]312 It is more likely that the term nationality does not refer to citizenship, but to national belonging[NARODNOST]55

guaranteed the minorities a right to be educated in their mother tongue and to develop culture 313 ,which is also mentioned in the above mentioned Decision of the Constitutional Court. The 1991Constitution, does not stipulate such a right, but a right to citizens whose mother tongues is notBulgarian, to use and study their language (so, not education in that language, but a right tolearn it). 314 Other provisions, which can be used to the benefit of the minorities can be also foundin the Second Chapter of the Constitution, under the title Fundamental Rights and Obligations ofCitizens. In that context, there are guarantees for freedom of religion, conscience and thefreedom of thought ( Article 37), to express an opinion or to publicize it through words ( Article38), right to peaceful assembly under condition laid down by law ( Article 43), as well as the rightto develop one's own culture in accordance with ethnic self-identification (Article 56).One of the provisions which are very important to analyse in respect of the status of theMacedonian minority, is the Constitutional prohibition of formation of political parties "onethnic, racial or religious lines" as well as on parties "which seek the violent usurpation of state"(Article 11, paragraph 4). This provision has been qualified as an example of "constitutionalauthority" for militant democracy, whose meaning and scope are "not self-evident and ultimatelyrequire judicial interpretation". 315 Indeed, the Bulgarian Constitutional Court delivered twodecisions, which are connected to the prohibition of forming political parties on the groundsenumerated above. Namely in 1992, there was a petition to the Court to declare asunconstitutional the Movement for Rights and Freedoms (political party of the Turkish minorityin Bulgaria), on the grounds of Article 11 (4). In its Decision No. 4, dated 21st of April 1992, theCourt rejected the request and interpreted the provision. The decision clarifies that this provisionhad two functions, the first one being the protective, meaning that the objective was to protect thestate and the state authority 316 The second purpose of the provision was not to ban political partiesformed by members of ethnic, ethnic, racial or religious minorities, but not to allow the formationand functioning of parties which are closed for persons who do not share the ethnic, racial orreligious characteristics as the members of the party in question. 317The second provision which proved to be vital for the Macedonian minority, is the stipulationon freedom of association, Article 44, its second paragraph in particular, which prohibitsorganizations to act to the detriment of the country's sovereignty and national integrity, or theunity of the nation, to incite racial, national, ethnic or religious enmity or to encroach on therights and freedoms of citizens; or to establish clandestine or paramilitary structures or shall seekto attain its aims through violence. In the same time this is a second constitutional norm whichcould fall under the auspices of militant forms of democracy. In the absence of a clearerunderstanding of the legality of militant democracy, constitutional provisions -explicitly orimplicitly- authorizing militant forms of democracy create ostensible authority for abusive stateaction. 318 Thus, on the grounds of these provisions, the political party of the Macedonians inBulgaria (UMO Ilinden-Pirin), was declared as unconstitutional and consequently dissolved. Injudgment No.1 of 29 February 2000, it was said that all the activities if the party were incontravention with the Constitution, aiming against the territorial integrity of the State, and thebreach was established even in absence of effective damage. 319 The Court stated that the action to313 See Ortakovski, p.263, supra at 39314 Bulgarian Constitution, Article 36, paragraph 1315 Patrick Macklem, Militant Democracy, Legal Pluralism and the paradox of Self-Determination, paperpresented at Conference on Islam, Budapest, 3-4 June 2005, on file with author316 Decision No. 4, 21 April 1992, Bulgarian Constitutional Court, available athttp://www.bild.net/ccourt/1992/R4-d1. ( in Bulgarian), [hereinafter referred to as Decision 4/1992]317 Id, Decision 4/1992318 See Macklem, supra at 124319 See UMO Ilinden Pirin, para 27,infra at 9856

declare the party as unconstitutional was in line with Article 22 (2) of IICPR as well as withArticle 11 ( 2) of the ECHR. 320 However, the Chamber Judgment of the European Court forHuman Rights delivered recently, in the case of UMO Ilinden-Pirin v Bulgaria (which shall beanalyzed below in detail), proved the contrary. Interestingly, in the decision on theconstitutionality of the party, the Constitutional Court held that the party was not incompatiblewith Article 11(4) of the Constitution, since it found that there was no Macedonian ethnos inBulgaria, and hence it could not be said the party was based on ethnic origin. 321As regards the right of peaceful assembly and freedom of association, the Bulgarianauthorities have refused to register an association of the Macedonians and conducted a practice ofsweeping bans on its planned meetings. With due regard to all circumstances, this has beenalready found as a violation of the right to peaceful assembly in the case of Stankov and UMOIlinden v Bulgaria in 2001 (discussed in detail below). However, the practice has continued evenafter the judgment by the Strasbourg court, and had resulted in another case against Bulgaria,which also showed a violation of Article 11 of the ECHR (UMO Ilinden and Ivanov v Bulgaria,analyzed below). The Stankov case in conjunction with the Ivanov judgment ( which is not yetfinal) raise another issue under of the European Convention for Human Rights, in view of theobligation of the Contracting Parties to abide by the final judgment in cases to which they areparties.5.2 Implementation of minority rights: identifying positive trends and problemsThe Bulgarian Constitutional Court elaborated that "the existence of a given ethnic, religious andlinguistic minority in the Republic of Bulgaria is not dependent on any state body’s decision, butrequires evidence of objective criteria" 322 How is this applied to the Macedonians, it shall beexplained in more detail, below.In accordance with the census in 2001, in Bulgaria of a total population of 7 928 901, 746664 persons, or 9.4% of the population belongs to the Turkish ethnic group, 370 908 persons, or4, 6 % Roma ethnic group, while all the remaining ethnic groups number of 69 204. 323 The1992 census, showed that 10 803 persons identified themselves Macedonians, and 3109 of themdeclared Macedonian as their mother tongue. 324 However, in the census administered in 1946,according to some sources 252,908 declared themselves as Macedonians. 325 This, variation innumbers, the authorities explain, is a result of activities of the Communist party, which at thetime encouraged the Macedonian identity and pursued a policy of making forced entries in thestatistical data. 326 However, the variation in the numbers of the people who declared asMacedonians can be also analyzed by the changes of the official policy towards the minority.In order to fully comprehend the status of the minority, it has to be noted that Bulgaria claimsthat the Macedonians are of Bulgarian ethnicity. While, there are arguments that for the Greeksthe very name Macedonians (Makedontsi) is a problem, the Bulgarian attitude was to accept the320 Id321 Id322 See Decision 2/1998, supra at 126323 Report submitted by Bulgaria pursuant to Article 25 of the FCNM, available athttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/1st_SR_Bulgaria.asp#TopOfPage [hereinafter referred to as Bulgarian Report on the FCNM]324 Id, Bulgarian Report on the FCNM325 See Ortakovski, p.271, supra at 39326 See Bulgarian Report on the FCNM, supra at 13857

term as one which defined the Bulgarians of the Macedonian region at large. 327 The changes ofthe official attitude can be exemplified by the fact that during the period of 1945-48 Bulgariafully recognized the Macedonian as a distinct nation, and allowed contacts between PirinMacedonia and the, at the time, People's Republic of Macedonia. 328 In this period, the culturalautonomy of Pirin Macedonia was recognized and it was possible to learn the Macedonianlanguage, teachers from PR of Macedonia were sent to Bulgaria for this cause, followed byopenings of theatres and many cultural organizations. 329 Nevertheless, very soon there was adeterioration of the Yugoslav-Bulgarian relations, which resurrected the claims that there was noseparate Macedonian nation, which logically had reflections on the status of the minority. 330Subsequently, the 1960s, witnessed that Bulgarian authorities, wrote in the new identificationcards of all who declared Macedonians, to be ethnic Bulgarians, followed by political trials withaccusations of Macedonian nationalism. 331 In this context, the 1968 Criminal Law was used forthe trials of those accused for "agitation and propaganda against the state" and of forming,leading or for membership of illegal groups, while the forceful resettlement of the members of theMacedonian minority, was facilitated with the adoption of the 1976 Law on the People's Militiawhich had provisions on administrative punishment without trial. 332 Some authors note that inBulgaria it was forbidden to sing Macedonian songs, traditional dances, and other traditionalcustoms, which characterizes the national identity of the Macedonians. 333The denying of the existence of the minority has continued up to present moment. On therequest to the Government to acknowledge that there is Macedonian national minority, theauthorities have responded that the Bulgarian law does not recognize the notion of nationalminority and in that regard it could not “better acknowledge” anyone’s existence specifically as a“national” minority, in addition to the fact when such claims stem from groups of individualswhich effectively enjoyed all rights and freedoms guaranteed to all Bulgarian citizens. 334However, it is essential to put the denial of the existence of the minority in context with thetraditional perception of Bulgaria that the Macedonian people originate from the Bulgarian nationand that the Macedonian language is simply a dialect of Bulgarian. 335 In addition, in so far as theexercise of political influence and participation is concerned, the general principle of nondiscriminationis not sufficient., considering that as a minority, group’s interests may well bedifferent from those of the majority; and its culture is likely to be marginalized by that of themajority 336 , regardless of the fact that Bulgaria, denies the existence of such minority ( the right toidentity and the questionable practice so states to deny existence of minorities on their territoriesshall be discussed below).5.3. Case law of the European Court for Human Rights related to the Macedonian minority inBulgaria327 Evangelos Kofos, Greece's Macedonian adventure: Controversy over FYROM's Independence andRecognition, p.361-394, in Van Coufoudakis et al eds. GREECE AND THE NEW BALKANS:CHALLENGES AND OPPPORTUNITIES Pella, New York, 1999)328 See Ortakovski, p.269, supra at 39329 See Balevski, p. 131, supra at 68330 Id, p 132-134331 Id, Ortakovski, p.271, supra at 39332 Id, p.271333 See, supra at 68334 See Appendix to ECRI's Third Report on Bulgaria, available athttp://www.coe.int/T/E/human_rights/Ecri/1-ECRI/2-Country-bycountry_approach/Bulgaria/Bulgaria_CBC_3.asp#TopOfPage335 See Jenny Engström, supra at 30336 See Yash Ghai, supra at 5558

The cases analyzed below, exemplify, violations of freedom of assembly in conjunction withfreedom of expression, since the bans on the planned meetings, are mostly a reaction to viewsexpressed on history and politics. Besides with the ECHR, the violations are in contraventionwith the obligation for non- discrimination in the enjoyment of freedom of expression, opinionand assembly, as set forth in the Convention for Elimination of All Forms of RacialDiscrimination. 337 In addition, Article 2 of the ICCPR obliges the Sates to respect the rightguaranteed by the Covenant, to all individuals with no distinction on a number of grounds,including political or other opinion and national origin.5.3.1 The case of Stankov and the United Macedonian Organization Ilinden v BulgariaThe United Macedonian Organization Ilinden, according to its statute worked to unite all theMacedonians in Bulgaria on regional and cultural basis and to achieve recognition of theMacedonian minority in Bulgaria, without recourse to violent and unlawful means. 338 TheBlagoevgrad Regional and the Supreme Court refused to register the association, on the basis,that it was directed against the unity of the nation, promoted national, ethnic hatred, wasdangerous for the territorial integrity of Bulgaria, and consequently, its registration would becontrary to the Constitution. 339 In addition, the organization had attempted to organize meetings,which were banned by the authorities.The reasoning of the Court followed the traditional test and at the outset, it inquired if therehad been interference. In this regard, it found that there was established practice of theauthorities to ban the assemblies which have been planned by the applicants, which has notchanged since 1992. 340 Furthermore, the analysis showed that the repeatedly invoked lack ofregistration of the applicant association, could not in itself under the applicable law justify the banof the meetings, but the alleged danger to public order did satisfy the prescribed by lawrequirement. 341 After determining that there was legitimate aim pursued, the Court continued toexamine if the interference was "necessary in a democratic society". In this context the judgment,points out that although, Article 11 has it's autonomous meaning, it must be considered in light offreedom of expression, especially in cases like the present, where the reactions of the authoritieswas at least in part as a result of the views presented by the applicants. 342 The Court emphasisedthat "demanding territorial changes in speeches and demonstrations does not automaticallyamount to a threat to the country’s territorial integrity and national security." 343 It then gave oneof the most important parts of the reasoning, which reads:"Freedom of assembly and the right to express one’s views through it are among theparamount values of a democratic society. The essence of democracy is its capacity toresolve problems through open debate. Sweeping measures of a preventive nature to337 Convention for Elimination of All Forms of Racial Discrimination, Article 5, supra at 11338 Case of Stankov and the United Macedonian Organization Ilinden v Bulgaria, Application nos 29221/95and 29225/95, Strasbourg, 2 October 2001[ Hereinafter referred to as Stankov] , para 10 available athttp://www.worldlii.org/eu/cases/ECHR/2001/567.html339 Stankov paras 12-13340Stankov paras 79-80341 Stankov, paras 81-81342 Stankov, para 85343 Stankov, para 9759

suppress freedom of assembly and expression other than in cases of incitement toviolence or rejection of democratic principles (...) do a disservice to democracy and ofteneven endanger it." 344The Court concluded that by preventing the applicants from dissemination of their viewswhen there was no real risk of violence and where it could not be determined that they pursuedundemocratic values, the authorities have overstepped their margin of appreciation, and thatconsequently the interference was not necessary in a democratic society. 3455.3.2 The Case of the United Macedonian Organization Ilinden and Ivanov v BulgariaThis case is closely connected to the case of Stankov and UMO Ilinden v Bulgaria. Namely, theone of the applicants is the same organization (Ilinden), whose subsequent attempts to registerwere unsuccessful (1998-99 and 2002-2004), and the practice of prohibiting its meetings tocommemorate historical events has also continued. 346Unlike in the Stankov case, in the present case the Government, had a position that themeetings of the organization were of a peaceful character. 347 The Court concluded that there havebeen interferences with the applicants' freedom of assembly on all occasion under examination,except on three the events. 348 Therefore, it continued to examine, if the interference was"prescribed by law". In that regard, it reaffirmed the position in Stankov, that the applicable lawdid not expressly require the non-registration of the association, but as it was relied on othergrounds, it accepted that the requirement was satisfied. 349 An interesting aspect in the Court'sreasoning in this part of the judgment, is that although, on some occasions there were no formalbans, it still accepts that the interference was prescribed by law. However, the European Court,noted that "when the authorities have grounds to believe that there is a genuine risk that seriousoffences may be committed during a public event, they may act pre-emptively", but underlinedthat "such a power must however be used sparingly and only when indeed warranted." 350 Theaims of the interference claimed by the Government were accepted as legitimate ones.Subsequently, the judgement emphasizes that with few exceptions, the authorities continued thepractice from the Stankov case, and provided with substantially the same justification for doingso from the Stankov case, which was consequently held as not necessary in a democraticsociety. 351 The Court made a very important point, based on the its case law, by stating that aneffective freedom of assembly, does not only presuppose that the state shall not interfere with it,but it enshrines a duty on part of the state to undertake reasonable and appropriate measures toenable lawful demonstrations to proceed peacefully. 352 In the present case, this was not satisfied,and hence it was held that Bulgaria failed to fulfil the positive obligations under Article 11 of the344 Id, para 97345 Id, paras 110-112346The case of The United Macedonian Organization Ilinden and Ivanov v Bulgaria, Application no. .44079/98, Strasbourg, 20 October 2005, paras 10-11 [hereinafter referred to as UMO Ilinden and Ivanov]available at347 Case of UMO Ilinden and Ivanov, para 98348 Case of UMO Ilinden and Ivanov para 106349 Id, para 108350 Id, para 109351 Id, para 114352 Id, para11560

ECHR, and based upon this analysis, found that there has been a violation of the freedom ofassembly 3535.3.3 Case of the United Macedonian Organization Ilinden-Pirin and Others v BulgariaUMO Illinden Pirin was a political party founded in 1998, but was dissolved since it was declaredas unconstitutional by the Bulgarian Constitutional Court, on the grounds that it was de facto asuccessor of the organization Ilinden (from the cases elaborated previously), and that the partythreatened to secede Pirin Macedonia from Bulgaria, which threat constituted an activity aimedagainst the territorial integrity of the country within the meaning of Article 44 § 2 of theConstitution 354The dissolution of the party was found as amounting to interference within the scope ofArticle 11 of the ECHR. 355 The European Court, did not accept the arguments of the applicants,and underlined that the variation from the Constitutional Court's case law, was not such as tobecome arbitrary and thus it satisfied the requirement "prescribed by law". 356 The alleged threat tonational security was accepted as legitimate objective of the interference. 357 In analysing if theinterference was "necessary in a democratic society", the judgement emphasizes that it could notestablished that the party leaders rejected democratic values and the party had not engaged in anypractical actions which could effectively endanger the country’s territorial integrity (which wasused as grounds for declaring the party unconstitutional). 358 Furthermore, the fact that theapplicant party’s political programme was considered incompatible with the current principlesand structures of the Bulgarian State did not mean that it is incompatible with the rules andprinciples of democracy. 359 In this part of the reasoning, the Court underlined:"In a democratic society based on the rule of law, political ideas which challenge theexisting order without putting into question the tenets of democracy, and whoserealisation is advocated by peaceful means must be afforded a proper opportunity ofexpression through, inter alia, participation in the political process. However shockingand unacceptable the statements of the applicant party’s leaders and members may appearto the authorities or the majority of the population and however illegitimate theirdemands may be, they do not appear to warrant the impugned interference." 360Consequently, it was held that there was no pressing social need, which required the dissolutionof the party, and thus the interference with Article 11 of the ECHR was not necessary indemocratic society. 361 These three interrelated judgements clearly show, how besides denial ofright to identity, the minority members have trouble in exercising fundamental rights and how theEuropean Court, contributes to minority rights protection, though it deals exclusively withindividual rights.353 Id para 115-117354 Case of the United Macedonian Organization Ilinden-Pirin and Others v Bulgaria, Application no.59489/00, Judgement, Strasbourg, 20 October 2005 [hereinafter UMO Ilinden- Pirin], paras 26-27355 UMO Ilinden Pirin, para 51356 UMO Ilinden-Pirin, para 54357 UMO Ilinden-Pirin, para 55358 Id, para 58359 Id, para 61360 Id, para 61361 Id, para 6261

Chapter 6-The Macedonian minority in Serbia and Montenegro6.1 Legal Framework for the protection of minority rightsThere are not many studies on the Macedonians in Serbia and Montenegro. Due to the fact, thatmore than 90 % of the Macedonians live in Serbia, I shall analyze the Serbian Constitution. 362Thus, Article 13 guarantees equal rights and duties and equal protection before the State and otherauthorities, irrespective of race, sex, birth, language, nationality, religion, political or other belief,level of education, social origin, property status, or any other personal attribute. The Constitutionguarantees freedom of religion (Article 41), freedom of peaceful assembly ( Article 43), freedomof association( Article 44) and freedom of expression, thought and conscious. (Article 45). 363 Inaddition, Article 39, provides with the freedom to express national affiliation and culture, andfreedom to use his language and alphabet, followed by a stipulation that citizen is not bound todeclare his national affiliation.Although it is a well-established international practice to regulate minority protection withneighbouring countries through means of bilateral acts, the only country with which Republic ofMacedonia, has concluded some form of bilateral regulation, is Serbia and Montenegro. This wasdone by concluding an Agreement between, the two countries. 364 In accordance with Article 3 ofthe Agreement concluded between the Republic of Macedonia and Serbia and Montenegro, theState Parties have declared that they recognize the right of the minority to use the mother tonguein public and private life, and the right to have their names written in that language in personaland official documents. 365 The parties agreed they through national legislation, shall enable themembers of the minorities to use their mother tongue in the local administration, and with thejudicial and administrative authorities, as well as the use of topography, names of streets andinstitutions in the appropriate languages. The Agreement guarantees that they will avail themembers of the minorities the possibility to learn their mother tongue or to have education inthose languages, through national legal acts. In addition, in Article 5, they obliged that they shallenable the members of the minorities, to express individually or in community with the othermembers of the group, their ethnical, linguistic or religious identity. The Agreement establishes aspecial Intergovernmental body, a Commission, with a task to control the implementation of theconcluded agreement. 3666.2 Implementation of minority rights: identifying positive trends and problemsAccording to 1991 census, in Serbia and Montenegro, there were 47.118 Macedonians or 0, 47 %of the total population, living mostly in Serbia (46, 046 of all Macedonians), in Kacarevo and362 Constitution of Serbia, available at the web site of the Serbian Parliament,http://www.parlament.sr.gov.yu/content/lat/akta/ustav/ustav_1.asp363 Id364Agreement between Republic of Macedonia and Serbia and Montenegro on the protection of theMacedonian national minority in Serbia and Montenegro, and the Protection of the Serbian and theMontenegrin national minority in the Republic of Macedonia, 6 July 2004, given to the author by theMacedonian Ministry of Foreign Affairs [hereinafter referred to as Agreement on minority protection]365 Id366 Id, Article 1462

Jabuka in particular, recognized as a national minority. 367 In the census of 2003, only 25,847persons declared as Macedonians. 368Apparently, by recognizing the Macedonians as national minority, there is a departure; fromthe position that Macedonia is just a Southern part of Serbia an that Macedonians have Serbianethnicity. This is also confirmed by the fact, that the two countries concluded a bilateralagreement for minority protection. However, despite declarations, besides advisory help by theMinistry for Human Rights, there was no financial support in the activities for implementation ofguaranteed rights. In addition, the request for restoration of the previously guaranteed rights touse the Macedonian language as official and education in the mother tongue, have not beenrealized. 369 As linguistic rights depend on relative number of individuals and geographicconcentration, it is reasonable to permit some degree of that language's use in state services andactivities 370 . Some progress was made, when in 2004, in Belgrade formed a National Council ofthe Macedonian national minority was constituted, and in turn, when its representative wasincluded in the Council for National Minorities, institutionally confirming the states of nationalminority, which shall provide with opportunities for articulation of the distinctive characteristicsif the group, in accordance with national legislation. 371ConclusionAs far as international instruments are concerned, the research proved that although the Sates arestill not willing to undertake far-reaching obligations with respect to minorities, there is a broadconsensus that they cannot go under certain limits. Thus, forced assimilation is strictly prohibitedand while the principle of non-discrimination is very important, it is not sufficient for minorityrights. In addition, there is still not a document, which insists on collective rights, but theexistence of the community is inherent in provisions, dealing with minority rights. On of the mostimportant rights, somewhere guaranteed explicitly, while somewhere being implicit, is the rightto identity of minorities, which is an underlying value of the rights, related to minorities.The basic problem of the Macedonian minority in Greece and Bulgaria is the refusal to acceptthe existence of the minority within their jurisdiction, which as consequence has that it cannotbenefit from the rights intended for minority protection, provided for in the national legalframeworks. The denial of the identity of the minority though legally impermissible, stems fromcomplex historical and political controversies, which do not appear to be solved in near future.Consequently, it is even harder for the group itself to preserve its identity when it cannot governits own cultural affairs and feed into national plans, particularly on education. 372 Thus, from auniversalist-Kantian perspective, both national majority and national minority identities areconstitutionally protected as long as they do not limit the other group's identity or interfere with367 Report submitted by the Federal Republic of Yugoslavia, pursuant to Article 25, paragraph 2 of theFCNM, 2002, available ethttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/PDF_1st_SR_FRY.asp#TopOfPage, [hereinafter referred to as Report 2002]368 See Facts on MNM, supra at 51369 Id370 See Fernand Varennes, supra at 20371 Id372 See Geoff Gilbert, Autonomy and minority groups: a right in international law?, 35 Cornell Int'l L.J. 30763

individual autonomy. 373 On the other hand, efforts by national minorities to protect their uniqueidentities and traditions are not attempts to garner special treatment and should be respected. 374Ironically, a principle in the minority rights, that the existence of minorities is a question offact, and not question of law, was established in the Advisory Opinion Greco-BulgarianCommunity by the Permanent Court of International Justice in 1930. 375 In this context, theHuman Rights Committee has stated, in its General Comment 23 that "the existence of an ethnic,religious or linguistic minority in a given State party does not depend upon a decision by the Stateparty but requires to be established by objective criteria". 376 The Strasbourg Court, as well,confirmed that the "existence of minorities is a historical fact". 377By denying the right to identity of the persons belonging to the Macedonian minority, Greeceand Bulgaria, deny the very essence of the relation between rights and minorities- "the claim todistinctiveness" and their contribution to the cultural heritage of mankind" 378 . As the PCIJ notedin 1935, "[There] would be no true equality between a majority and a minority if the latter weredeprived of its own institutions, and were consequently compelled to renounce that whichconstitutes the very essence of its being as a minority." 379The aforementioned problems of restoration of citizenship of the refugees from the GreekCivil War, as well as the problems of expressing their own identity and separate characteristics inboth Greece and Bulgaria, are questionable under Kymlicka’s concept of ethnocultural justice. 380Namely, in order to be legitimate nation-building in a liberal democracy must include in"membership of the nation" all long-term residents, which also would apply to restoration ofcitizenship, especially when the process is privileging only persons of Greek descent (the norm isformally repealed but in fact there is still no improvement). 381 Subsequently, nation-buildingmust promote a pluralist and tolerant conception of national identity and national integration andin the same time allow the minorities to maintain themselves as distinct societal cultures. 382 TheGeneral Comment on article 27 ICCPR, clarifies that the protection of the rights enumerated in itis "directed towards ensuring the survival and continued development of the cultural, religiousand social identity of the minorities concerned, thus enriching the fabric of society as a whole." 383Even if we accept the objections on the distinctiveness of the Macedonian nation, liberalStates recognize that "territorially concentrated groups" involuntarily concentrated into the stateshould not be forced to adopt the majority's national identity. 384 On the contrary, the members of373 Andras Sajo, Protecting nation states and national minorities: a modest case for nationalism in EasternEurope, 1993 U. Chi. L. Sch. Roundtable 53374 Andras Sajo, Id375 Advisory Opinion Greco-Bulgarian Community by the Permanent Court of International Justice in 1930,cited from Kymlicka eds, infra at 193376 Human Rights Committee,General Comment on article 27, supra at 2377 See Sidiropoulos supra at 102378 See Patrick Thornberry, supra at 9379 Advisory Opinion of 6 April 1935 on Minority Schools in Albania, 1935 P.C.I.J. (ser. A/B) No. 64, citedfrom Geoff Gilbert, supra at 187380 Will Kymlicka and Magda Opalski eds, CAN LIBERAL PLURALISM BE EXPORTED? WESTERNPOLTICAL THEORY AND ETHNIC RELATIONS IN EASTERN EUROPE, (Oxford University press,Oxford, 2001) [hereinafter referred to as Kymlicka eds]381 Id, Kymlicka eds382 Id383 See General Comment, supra at 2384 Id64

the minority still face problems in expressing their identity, their views over history in exercisingfreedom of association and peaceful assembly, rights to which they are entitled not only by thenational, but by virtue of international norms to which the states have adhered. This, especiallywhen in accordance with the Bulgarian Constitution international agreements form part ofnational legal order and prevail over national legislation 385 and with basically the same obligationin Article 28 of the Greek Constitution. 386As regards what was said so far, it is not constructive to discuss about possible solutions,which presuppose a group, when the existence of the minority is not recognized, but solutionshould be sought within the corpus of individual rights. While the full guarantee of existinghuman rights norms may adequately redress minority complaints of discrimination, physicalviolence, or land seizures, these norms are not adequate to respond to economic and politicaldemands. 387 Nevertheless, although, the rights of expression, association, and privacy remainessentially individualistic in their outlook, they also protect minority views and cultures. 388 Andwhen, these rights are violated within a particular state, the minority (through its members), maytheoretically, try to seek redress by applying to the European Court for Human Rights, as it wasillustrated before. So far, the Court in Strasbourg has considered the protection of the right toidentity (Sideropoulos v Greece) and political participation (dissolution of political parties,freedom of expression and assembly, even political representation). 389 The case law of theEuropean court of Human Rights suggests "the combination of rights to freedom of expressionand freedom of assembly for minority groups show how political participation for such groupscan be upheld through a judicial process". The Court has, however, with regard to languagerights, held that these rights of minorities are limited to the right not to be discriminated in theenjoyment of the Convention rights.When it comes to Serbia and Albania, the situation is largely better. The main inconveniencein Albania is the concept of the so-called minority zones, in accordance, which, minorities enjoythe guaranteed rights only in those zones where they are recognized as such. Thus, theMacedonians, which do not reside in the only recognized zone, have a problem in enjoying therights guaranteed by the Constitution. The whole conception of universal and human rightssuffers when some individuals or groups are denied rights on the grounds of their religion,language or colour, 390 even in cases such as this one, when the rights as such, are not denied buttheir effective exercise. In both, Serbia and Albania, there are problems with funding, especiallyin the fields of culture. Having a publicly funded education in one's mother tongue is crucialbecause it guarantees the passing of the language and its associated traditions to the futuregenerations. 391 Furthermore, there is ample room for improvement of the political participation,especially when participation in public affairs by minorities is central to their sense of identityand essential to the protection of their interests. 392 The problem of unequal distribution offinancial and other resources remains an open question, but no constitutional or human rights385 Article 5, Constitution of Bulgaria, supra at 125386 Constitution of Greece, supra at 59387 Hurst Hannum, Rethinking Self-Determination, 34 Va. J. Int'l L. 1,(1993)388 Id389 Roberta Medda-Windischer, The European Court for Human Rights and Minority Rights, in EuropeanIntegration, Vol. 25 (3), September, 2003, available athttp://taylorandfrancis.metapress.com/openurl.asp?genre=article&issn=0703-6337&volume=25&issue=3&spage=249390 See Yash Ghai supra at 55391 See Kymlicka, eds, supra at 182392 See Yash Ghai supra at 5565

principle exists which would guarantee equal distribution of resources. 393 The granting of specialsubsidies remains a matter of government discretion although the State should not discriminateamong members within the same class of beneficiaries. 394 In these two countries answers, can andshould be found through an integrationist approach, which values minority cultures and identities,but seeks to establish a political system in which all citizens participate equally, and providesconstitutional and political incentives for people of different groups to cooperate. 395393 See Andras Sajo supra at 188394 Id395 Id66

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Vlassis Vlassidis, Veniamin Karakostanoglou, Recycling propaganda: Remarks on RecentReports on Greece's "Slavo-Macedonian" minority, in Balkan Studies, Vol. 36/1, Thessaloniki1995, pp. 151–170 available at http://www.datatone.com/~angelos/Vlasidis.htmAlbaniaConstitution of Albania, approved by the Parliament on 21 October 2003, available at the website of the Albanian Council of Ministershttp://www.keshilliministrave.al/english/kushtetuta/kushtetuta%20e%20Shqiperise%201.htmReport submitted by Albania pursuant to Article 25 of the Framework Convention of NationalMinorities, 2001, available athttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/1st_SR_Albania.asp#TopOfPageThird Report on Albania, ECRI, 2005, available at http://www.coe.int/T/E/Human_Rights/Ecri/1-ECRI/2-Country-by-country_approach/Albania/Albania_CBC_3.asp#P75_4025BulgariaBulgarian Constitution, State Gazette No 56/13.07.1991, available at the web site of theBulgarian Institute for Legal Development, http://www.bild.net/legislation/Decision No. 2 of 18 February 1998, Bulgarian Constitutional Court available athttp://www.bild.net/ccourt/1998/2_18_2.htm (in Bulgarian)Decision No. 4, 21 April 1992, Bulgarian Constitutional Court, available athttp://www.bild.net/ccourt/1992/R4-d1. (In Bulgarian)Report submitted by Bulgaria pursuant to Article 25 of the FCNM, available athttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/1st_SR_Bulgaria.asp#TopOfPageEuropean Commission against Racism and Intolerance, Third Report on Bulgaria, available athttp://www.coe.int/T/E/human_rights/Ecri/1-ECRI/2-Country-bycountry_approach/Bulgaria/Bulgaria_CBC_3.asp#TopOfPageGreeceEuropean Commission against Racism and Intolerance, Third Report on Greece, available athttp://www.coe.int/t/E/human%5Frights/ecri/1%2DECRI/2%2DCountry%2Dby%2DCountry%5Fapproach/Greece/Greece_CBC_3.asp#P103_11509Greek Constitution, available at the website of the Greek Ministry of JusticeEuropean Monitoring Centre on Racism and Xenophobia, ANTI-DISCRIMINATIONLEGISLATION IN EU MEMBER STATES, available athttp://europa.eu.int/comm/employment_social/fundamental_rights/pdf/aneval/legel.pdfCode of Civil Procedure, article 252, unofficial translation available athttp://www.ciemen.org/mercator/butlletins/44-20-gb.htmArticle 233, Code of Penal Procedure, unofficial translation available athttp://www.ciemen.org/mercator/butlletins/44-19-gb.htmMacedoniaFakti za Makedonskoto Nacionalno Malcinstvo vo sosednite zemji[ Facts on the MacedonianNational Minority in the Neighboring Countries] Ministry of Foreign Affairs of the Republic ofMacedoniaConstitution of the Republic of Macedonia, available athttp://www.mlrc.org.mk/ustav_i_amandmani.htm69

Serbia and MontenegroConstitution of Serbia, available at the web site of the Serbian Parliament,http://www.parlament.sr.gov.yu/content/lat/akta/ustav/ustav_1.aspAgreement between Republic of Macedonia and Serbia and Montenegro on the protection of theMacedonian national minority in Serbia and Montenegro, and the Protection of the Serbian andthe Montenegrin national minority in the Republic of Macedonia, 6 July 2004, MacedonianMinistry of Foreign AffairsReport submitted by the Federal Republic of Yugoslavia, pursuant to Article 25, paragraph 2 ofthe FCNM, 2002, available ethttp://www.coe.int/T/e/human_rights/Minorities/2._FRAMEWORK_CONVENTION_%28MONITORING%29/2._Monitoring_mechanism/3._State_Reports_and_UNMIK_Kosovo_Report/1._First_cycle/PDF_1st_SR_FRY.asp#TopOfPageTable of cases(all cases available at http://www.echr.coe/int)Case of Serif v Greece, Application no. 38178/97, Strasbourg, 16 December 1999;Case of Larissis and Others v. Greece, Application nos. 23372/94;26377/94;26378/94,Strasbourg 24 February 1998;Case of Canea Catholic Church v. Greece, Application no. 25528/94, Strasbourg. 16 December1997,Case of Kokkinakis v. Greece, Application no. 14307/88, Strasbourg, 25 May 1993Case of Ouranio Toxo (The Rainbow Party) and Others v. Greece, (Application no. 74989/01)Judgement, Strasbourg, 20 October 2005http://www.echr.coe.int/Eng/Press/2005/Oct/ChamberjudgmentOuranioToxovGreece201005.htm#_ftn1Case of Sidiropoulos and others v. Greece (Application no. 57/1997/), Judgment, Strasbourg, 10July 1998,Case of Stankov and the United Macedonian Organization Ilinden v Bulgaria, Application nos29221/95 and 29225/95, Strasbourg, 2 October 2001Case of The United Macedonian Organization Ilinden and Ivanov v Bulgaria, Application no. .44079/98, Strasbourg, 20 October 2005,Case of the United Macedonian Organization Ilinden-Pirin and Others v Bulgaria, Application no.59489/00, Judgement, Strasbourg, 20 October 2005Advisory Opinion Greco-Bulgarian Community by the Permanent Court of International Justicein 1930Newspapers:Dnevnik, 9 June 2005To Vima, June 25 2003,Evangelos Kofos, Unexpected initiatives : Towards the resettlement of aSlav-Macedonian minority in Macedonia?Kathimerini March 4,199070

THE DIFFERING TAX TREATMENT OF INVESTMENT ADVISORY FEES AND BROKERAGEFEES; A GENERAL ANALYSIS AND AN ANALYSIS IN THE CONTEXT OF CHARITABLEINVESTMENTSBARRY RICKERT 396I.IntroductionInvesting in securities has inherent risks. The specific securities in an investor’s portfolio mayplummet overnight, the market could crash, or an investment professional could engage infraudulent activity, leading to an investor loss. A 2002 poll concluded that forty percent ofAmericans had at least $10,000 invested in the stock market at that time. 397 Considering the largepercentage of Americans investing in securities, it would seem rational to expect that tax lawswould be written in a way that encourages taxpayers to seek investment professionals who areheld to high standards of conduct. However, the tax laws not only fail to provide incentives fortaxpayers to seek the advisors with the highest degree of fiduciary duties, but they actually favorthe use of investment professionals with the least accountability. The message being sent toindividual investors is clear: “the lower the fiduciary duty, the better the tax consequences.” Thisarticle will explore the current tax laws, analyze the policy considerations and proposealternatives to the current system, especially as regards individual taxpayers.The fiduciary duty implications discussed in this paper are mainly addressed in the context oftaxable persons (individual taxpayers); however, the differing duties are also applicable to theinvestment advisors and brokers hired by charitable organizations. Trustees of charitable trusts,in making investment decisions, are “under a duty similar to that of the trustee of a privatetrust.” 398 The Introduction of the Restatement (Third) of Trusts summarized principles ofprudence designed to instruct trustees. 399 One of those principles is that “trustees have a duty toavoid fees and other costs that are not justified by the needs and realistic objectives of the trust’sinvestment program.” 400 Because trustees of charitable trusts have a duty to avoid unjustified feesand costs, an analysis of the fiduciary consequences of hiring an investment advisor or a broker isrelevant to the management of such trusts.Generally speaking, investment advisory fees may be deducted under Internal Revenue Code(“IRC”) § 212(2) 401 if: (1) an individual taxpayer elects to itemize his 402 deductions, pursuant to396 Juris Doctor Candidate, Pace University School of Law (May 2006); Student Attorney in Pace Law’sSecurities Arbitration Clinic; B.A., Villanova University. Many thanks to Professor Bridget J. Crawford,Associate Professor of Law, Pace University School of Law, for her invaluable consultation and assistancewith this article. Thanks also to Ian Yankwitt, a registered investment advisor, who provided valuableinsight on many of the topics presented.397 See J. Brent Wilkins, Comment, The Sarbanes-Oxley Act of 2002: The Ripple Effects of RestoringShareholder Confidence, 29 S. Ill. U. L. J. 339 (2005).398 Marion Fremont-Smith, GOVERNING NONPROFIT ORGANIZATIONS (Belknap, Harvard 2004) at 190-191(citing Restatement (Second) of Trusts, §389 (revised)).399 Fremont-Smith at 191 (citing Restatement (Third) of Trusts: Prudent Investor Rule, Introductory Note).400 Id.401 Unless otherwise provided all citations to the IRC are to the Internal Revenue Code of 1986, asamended.71

IRC § 67(e); and (2) only to the extent that those fees exceed two-percent of the taxpayer’sadjusted gross income. 403 Brokerage fees, in contrast, are treated as capital expenditures, 404 whichare proper adjustments to basis. 405 Therefore, when a taxpayer sells a security with a higher basis(due to brokerage fee adjustments), he does not recognize as much gain as he would without thebasis adjustment—thereby reducing his overall tax liability.Section II of this article describes the various types of fees that taxpayers incur in investing insecurities. Section III analyzes how the tax law treats investment advisory fees versus brokeragefees. Section IV examines the legislative history of particular sections of the IRC in order tounderstand Congress’ intent in enacting them. Then section V analyzes the duties that investmentadvisors and brokers owe to their clients. Section VI scrutinizes the policy implications of thecurrent Code’s differing treatment of brokerage fees and investment advisory fees. Section VIIlooks at the practical implications of this differing treatment in the context of charitableorganizations and analyzes the ways in which both private foundations and public charitiesshould address the issues. Finally, section VIII proposes revisions to the current Code to betteralign the IRC with investors’ expectations for their financial professionals.II.Fees that Taxpayers Incur in Securities InvestmentsA. Types of Financial Services Professionals:Although the National Association of Securities Dealers (“NASD”) 406 lists many designations 407used to describe investment professionals, there are two main categories: (1) brokers and (2)registered investment advisors. 408 Brokers are regulated by the NASD and investment advisorsare governed by the Securities and Exchange Commission (“SEC”). 409 Investment advisors aredefined in the Investment Advisors Act (“IAA”) as,402 Use of the masculine pronoun throughout this paper is not meant to favor one gender, but is substitutedin place of “his or her” for improved readability. See IRC § 7701(o)(1)(3) (providing that words importingthe masculine gender include the feminine as well).403 See IRC § 67(a).404 See Treasury Regulation (“Regulation”) § 1.263(a)-2(e).405 See IRC § 1016(a).406 The NASD is a self regulated organization which serves as the primary private-sector regulator ofAmerica’s securities industry. It oversees the activities of over 5,100 brokerage firms, and more than657,690 registered securities representatives. The NASD licenses individuals and admits firms to theindustry, writes rules governing their behavior, ensures regulatory compliance and sanctions those who donot comply. NASD also operates the largest securities dispute resolution forum in the world—processingover 8,000 arbitrations and 1,000 mediations per year. See the NASD website, available at www.nasd.com(last visited February 21, 2006).407 To view a complete list of NASD’s professional designations and descriptions of each seehttp://apps.nasd.com/investor_Information/resources/designations/AllDesigByAcronym.asp (last visitedFebruary 21, 2006).408 See Dean Starkman, ISO: An Advisor to Trust, Washington Post (September 18, 2005).409 The SEC was established by Congress in 1934 to enforce the Securities Act of 1933 and the SecuritiesExchange Act of 1934, promote stability in the markets and to protect investors. The SEC requirespublicly-traded companies to disclose meaningful financial and other information to the public. Further,the SEC oversees stock exchanges, broker-dealers, investment advisors, mutual funds, and public utilityholding companies. The primary concern of the SEC is to promote the disclosure of important information,enforcing the securities laws, and protecting investors who interact with these various organizations orindividuals. See the SEC website, available at www.sec.gov (last visited February 21, 2006).72

…any person who, for compensation, engages in the business of advising others,either directly or through publications or writings, as to the value of securities oras to the advisability of investing in, purchasing, or selling securities, or who, forcompensation and as part of a regular business, issues or promulgates analyses orreports concerning securities… 410The definition specifically excludes other professionals from this definition, including brokers, solong as the broker’s “…performance of such service is solely incidental to the conduct of hisbusiness as a broker or dealer and receives no special compensation therefor…” 411 Brokers aredefined under the Securities Exchange Act (“SEA”) as “…any person engaged in the business ofeffecting transactions in securities for the account of others.” 412 The core role of a broker is toexecute transactions for customers—no other investment professional can perform thisfunction. 413 Brokers may provide a wide range of services for their clients related to the securitiestransaction, such as research and advice prior to effectuating a trade, but for the most part, theirfunction is execution of trades. 414B. Common Fee Structures:According to the NASD, investment professionals are most commonly paid in one or more of thefollowing ways: (1) hourly fee; (2) fee-only; (3) commissions on the investment products theysell; (4) a percentage of the value of the assets they manage; and (5) a combination of fees andcommissions. 415 This article will examine in detail three of these: commissions; fee-only; andfee-based accounts. 416A. Commissions:For investment professionals who charge commissions, they typically earn them on a transactionby transaction basis. 417 Brokers are the only investment professionals who are authorized tocharge commissions. 418 To the extent that commissions depend on the volume of transactions,there is a built-in incentive for brokers to trade frequently (whether or not such trading isnecessary for that particular investor). 419 Commission fees are not only incurred through the useof live brokers. Several companies primarily offer brokerage services online or via automatedservicetelephone for customers to effectuate transactions themselves without the assistance of abroker. 420 Even firms that primarily market live brokers, also offer online and telephonicservices.410 IAA §202(a)(11), 15 U.S.C. §80b-2(a)(11).411 IAA § 202(a)(11)(C), 15 U.S.C. §80b-2(a)(11)(C).412 SEA §3(a)(4)(A), 15 U.S.C. §78c(4)(A).413 See Barbara Black, Brokers and Advisors – What’s in a Name?, 11 Fordham J. Corp. & Fin. L. 31, 36(2005).414 Id.415 See http://apps.nasd.com/investor%5FInformation/resources/designations/ (last visited February 21,2006).416 Interview with Ian Yankwitt (“Yankwitt Interview”), in White Plains, N.Y. (October 27, 2005).417 Id.418 Id. (Mr. Yankwitt noted that some investment advisors may also be brokers; in which case they maycharge commissions).419 See discussion infra Section V.A.ii.420 Four major companies in this category are: E*Trade, Scottrade, Fidelity and Ameritrade.73

Some examples can best illustrate the actual fees that industry-leading companies charge theircustomers in brokerage commissions. For broker-assisted trades, Charles Schwab’s commissionrates range from $35 plus 1.70% of the principal trade size, for trades between $0-$2,499, and$270 plus 0.09% of the trade size for trades of $500,000 and over. 421 Commissions for executingtrades online range from $9.95 per trade, to $19.95 per trade. 422 Automated phone stock tradecommission rates range from $14.95 per trade to $29.95 per trade—based on the frequency of acustomer’s trading. 423 Vanguard offers similar services. For broker-assisted transactions,Vanguard’s standard commission rate is $45 plus $0.05 per share. 424 The standard commissionrate for online-transactions is the greater of $25 or $0.025 per share. 425 Similarly, AmeripriseFinancial charges $75 per trade of 1,000 shares or less for broker-assisted transactions. 426 Foronline trades, Ameriprise charges $19.95 for trades of 1,000 shares or less. 427Several companies place their primary focus on services which allow investors to execute theirtrades online without the assistance of a broker. For example, E*Trade’s commissions rangefrom $6.99 to $9.99 per trade based on the number of trades per quarter. 428 E*Trade recently hasoffered one-hundred free trades to persons opening new accounts. 429 Ameritrade customers cantrade unlimited shares at a rate of $10.99 per transaction online. 430 Scottrade boasts of $7 pertransaction commissions on its online trading. 431 Fidelity Investments charges a standardcommission rate of $19.95 per trade and as low as $8.00 per trade for persons with $1,000,000 inhousehold assets or who perform 120 trades per year and have $25,000 in household assets. 432Because the commission fees are notably less expensive with online transactions, it is logical tosurmise that some level of advise is contemplated for the use of a live broker.B. Fee-Only:In a “fee-only” type arrangement the investment professional charges a either a flat annual fee ora flat percentage based on the size of the account and is indifferent to the number of transactionsthat occur. 433 Investment advisers normally charge their clients fees in this manner. 434 Ameriprisedescribes this type of an account as one in which “[y]our Ameriprise financial advisor maycharge a flat, fixed fee for your planning services based on your financial goals and adviceneeds.” 435 Charles Schwab offers two fee accounts: (1) “Schwab Portfolios with AdvisedInvesting,” and (2) “Schwab Advisor Network®.” 436 “Schwab Portfolios” charges 1.25% ofthe eligible assets in the account and “Schwab Advisor Network®” charges an average of 1% of421 See Charles Schwab website, available at www.schwab.com (last visited February 21, 2006).422 Id.423 Id.424 See Vanguard website, available at www.vanguard.com (last visited February 21, 2006).425 Id.426 See Ameriprise Financial website, available at www.ameriprise.com (last visited February 21, 2006).427 Id.428 See E*Trade Financial website, available at www.etrade.com (last visited December 1, 2005).429 Id.430 See Ameritrade website, available at www.ameritrade.com (last visited February 21, 2006).431 See Scottrade website, available at www.scottrade.com (last visited February 21, 2006).432 See Fidelity Investments website, available at www.fidelity.com (last visited February 21, 2006).433 Id.434 Id.435 See Ameriprise website, supra note 31.436 See Charles Schwab website, supra note 26, athttp://www.schwab.com/public/schwab/home/advice/advised_investing?cmsid=P-993478&lvl1=home&lvl2=advice&refid=P-1056397&refpid=P-998828 (last visited February 21, 2006).74

the assets under management. 437 Thus the fee-only arrangement, unlike a commissionarrangement, is indifferent to the quantity of transactions made on an account.C. Fee-based accounts:In the case of fee-based accounts, companies either charge both fees and commissions or chargefees and receive other revenue streams that are commission-like. 438 For these account, as in feeonlyaccounts, the fees are generated based on the amount of assets under management. 439 In feebasedaccounts, however, the investment professional receives additional revenue, either fromcommissions, 12(b)(1) fees or from other revenue sharing arrangements, depending on theproducts purchased or sold by the client. 440 When major brokerage firms began offering feebasedaccounts in 1999, there was some debate as to whether brokers would be regulated underthe IAA when servicing such accounts because the charges were based both on commissions andadvice-related fees. 441 On April 12, 2005, however, the SEC adopted Rule 202(a)(11)-1, whicheliminated “no special compensation” 442 as a requirement for exclusion from the statutorydefinition. 443 Rule 202(a)(11)-1 excludes brokers who use fee-based accounts from the definitionof investment advisors. Therefore, brokers remain excluded from IAA provisions when usingfee-based accounts.Several companies currently offer fee-based accounts. Consider, for example, AmeripriseFinancial. That company explains that its asset-based fee accounts operate as follows:Ameriprise Financial Services also offers other fee-based advisory servicesavailable in separate “wrap accounts.” Part of the annual asset-based fee for theadvice and related services on the assets in the wrap account is paid to youradvisor. This fee includes transactional fees and could be ideal for clients whoprefer not to pay fees for each transaction like they would in a typical brokerageaccount. 444Thus, Ameriprise and its brokers may enjoy the lower fiduciary duty standards imposed onbrokers while offering an investment advisory type account. Charles Schwab also offers twotypes of fee-based accounts: “Advised Investing Signature,” and “Schwab Private Client.” 445In the descriptions of both accounts, some level of advice is contemplated, yet a footnote iscareful to disclose that the accounts are “brokerage accounts.” The footnote states:These are brokerage services. The Securities and Exchange Commissionrequires all broker-dealers who give brokerage advice for a fee to make thefollowing disclosure. Accounts enrolled in these services are brokerage accountsand not advisory accounts. Our interests may not always be the same as yours.437 Id.438 See Yankwitt Interview, supra note 21.439 Id.440 Id.441 See Black, supra note 18, at 33.442 See IAA, supra note 16.443 Rule 202(a)(11)-1, 17 C.F.R. §275.202(a)(11)-1.444 See Ameriprise Financial website, supra note 31.445 See Charles Schwab website, supra note 26, athttp://www.schwab.com/public/schwab/home/advice/advised_investing?cmsid=P-993478&lvl1=home&lvl2=advice&refid=P-1056397&refpid=P-998828 (last visited February 21, 2006).75

Please ask us questions to make sure you understand your rights and ourobligations to you, including the extent of our obligations to disclose conflicts ofinterest and to act in your best interest and to act in your best interest. We arepaid both by you and, sometimes, by people who compensate us based on whatyou buy. Therefore, our profits, and our salespersons’ compensation, may varyby product and over time. Please call us at 888-878-3892 if you have questionsabout the difference between a brokerage service and an advisory service. 446The “Advised Investing Signature” account charges 0.50% on eligible assets, with a $250quarterly minimum charge. 447 The first 60 equity trades per year will not incur anycommission charges. 448 The minimum assets needed to maintain this account is$150,000. 449 The fees incurred in a “Schwab Private Client” account are a maximumof 0.75% on eligible assets, with a minimum quarterly charge of $1,000. 450 The first 120equity trades per year will not incur any commission charges. 451 The minimum amountof assets in this account is $500,000. 452The fee-based account is a compelling example of the danger of providing preferentialtax treatment for brokerage fees. Firms have successfully classified these accounts asbrokerage accounts, thereby maintaining a lower fiduciary duty standard. Fee-basedaccounts, however, resemble investment advisory accounts in that they do not charge feesbased on a transactional basis. However, as the Schwab footnote states, brokers are paidby the customers and sometimes “by people who compensate us based on what youbuy.” 453 There is a potential danger that brokers could make recommendations based onmore than what is in a customer’s best interest. An investor could foreseeably make aninvestment decision based on preferable tax treatment without considering the potentiallyharmful fiduciary consequences. 454III.How the Internal Revenue Code Treats Investment Advisory Fees and Brokerage FeesA. Investment Advisory Fees:Private investors frequently seek assistance from professionals when making investmentdecisions. Investment advisors almost always charge their clients fees for services rendered.Generally speaking, investment advisory fees are considered personal expenses and therefore arenot deductible under IRC § 262(a). 455 Yet, it will be very difficult for taxpayers to receive a taxbenefit in connection with the fees paid for investment advice due to the narrow constraints of theIRC. Therefore, taxpayers must pay nearly all investment advisory fees out-of-pocket and likelyare not able to deduct any of these expenses.446 Id.447 Id.448 Id.449 Id.450 Id.451 Id.452 Id.453 See Schwab, supra note 51, and accompanying text.454 See discussion infra Section V.455 See IRC § 262(a).76

As a preliminary matter, a taxpayer will not be concerned about the deductibility of investmentadvisory fees unless he itemizes his deductions. IRC § 63(e) states in relevant part “[u]nless anindividual makes an election under this subsection for the taxable year, no itemized deductionshall be allowed for the taxable year.” 456 Once a taxpayer makes an election under IRC § 63(e)to itemize his/her deductions, the analysis turns to whether the fees paid to an investment advisormay be deductible. IRC § 212(2) allows for a deduction of “all the ordinary and necessaryexpenses paid or incurred during the taxable year…(2) for the management, conservation, ormaintenance of property held for the production of income.” 457 Treasury Regulation(“Regulation”) § 1.212-1(b) defines income for the purposes of § 212 as: “… not merely incomeof the taxable year but also income which the taxpayer has realized in a prior taxable year or mayrealize in subsequent taxable years; and is not confined to recurring income but applies as well togains from the disposition of property.” 458 Regulation § 1.212-1(g) sets forth an example of aqualifying expenditure:[f]ees for services of investment counsel, custodial fees, clerical help, office rent,and similar expenses paid or incurred by a taxpayer in connection withinvestments held by him are deductible under section 212 only if (1) they arepaid or incurred by the taxpayer for the production of income; and (2) they areordinary and necessary under all the circumstances, having regard to the type ofinvestment and to the relation of the taxpayer to such investment. 459Case law provides further guidance on what types of expenses may be deducted under § 212.The Tax Court, in Honodel v. Commissioner 460 set forth the basic rule that “[f]ees paid forinvestment counsel and advice concerning existing and future or potential investments have beenheld to be deductible as ‘ordinary and necessary expenses paid or incurred by an individualduring the taxable year for the production or collection of income.’” 461 Courts, in determiningwhether expenses fall under § 212, look to “whether the services were performed in the processof acquisition or for investment advice.” 462 Thus fees paid to investment advisors that satisfy therequirements of § 212 may be deductible as a miscellaneous itemized deduction.Miscellaneous itemized deductions are itemized deductions other than those specifically listedunder IRC § 67(b). 463 Section 212 deductions are not listed under section 67(b), and thus areclassified as miscellaneous itemized deductions. Further Regulation § 1.67-1T(ii) provides anexample of an expense that would be classified as a miscellaneous itemized deduction:“[e]xpenses for the production or collection of income for which a deduction is otherwiseallowable under section 212(1) and (2), such as investment advisory fees, subscriptions toinvestment advisory publications…” 464If a taxpayer successfully classifies fees paid to an investment advisor as a miscellaneousitemized deduction under § 212, there is another step in determining whether that expense will berecognized as a deduction. A taxpayer still must comply with IRC § 67’s two-percent floor on456 Id.457 Id.458 Id.459 Id.460 76 T.C. 351, 364 (1981)461 Id.462 Id. at 365.463 See IRC § 67(b).464 Id.77

miscellaneous itemized deductions. As a general rule under IRC § 67(a), “[i]n the case of anindividual, the miscellaneous itemized deduction for any taxable year shall be allowed only to theextent that the aggregate of such deductions exceeds 2-percent of adjusted gross income.” 465Therefore, a taxpayer may only deduct investment advisory fees to the extent that those feesexceed 2-percent of that taxpayers adjusted gross income. 466In summary, a taxpayer may recognize a deduction for expenses that comply with § 212, if (1)those fees exceed 2-percent of the taxpayer’s adjusted gross income and (2) the taxpayer makesan election under § 63(e) to itemize his deductions.Example I:In 2004 Rhonda (an individual taxpayer) has an adjusted gross income of$100,000 and spends $2,500 on investment advisory fees. Assume Rhonda electsto itemize her deductions.Since Rhonda has decided to itemize her deductions 467 , the next inquiry is whether the fees shepaid to her investment advisor exceed 2-percent of her adjusted gross income. 468 Two-percent of$100,000 is $2,000. The amount that Rhonda spent in excess of $2,000 may be deducted.Rhonda spent a total of $2,500 on investment advisory fees. Accordingly, Rhonda is able todeduct $500 from her taxable income. The remaining $2,000 will not be deductible.B. Brokerage Fees:Fees that investors pay in connection with acquiring or disposing of securities (brokerage fees)are treated, for tax purposes, entirely differently than investment advisory fees. Brokerage feeswill result in a basis adjustment to a taxpayer’s security regardless of his adjusted gross income orwhether the taxpayer elects to itemize his deductions. Brokerage fees receive a favorable taxtreatment when compared to investment advisory fees.The Tax Court in Honodel stated: “expenditures that are capital in nature are not deductible under§ 212 because such expenditures fail to satisfy the ‘ordinary and necessary’ requirement of thatsection.” 469 Regulation § 1.212-1(n) states: “[c]apital expenditures are not allowable as nontradeor nonbusiness expenses…where, however, the item may properly be treated only as a capitalexpenditure or where it was properly so treated under an option granted in subtitle A of the Code,no deduction is allowable under section 212.” 470 IRC § 263 (“Capital expenditures”) states, “[n]odeduction shall be allowed for—(1) any amount paid out for new buildings or for permanentimprovements or betterments made to increase the value of any property or estate.” 471 Regulation§ 1.263(a)-2(e) lists two examples of capital expenditures: “[c]omissions paid in purchasingsecurities [and] [c]omissions paid in selling securities..” 472 The Supreme Court in Woodward v.465 Id.466 See William L. Rudkin Testamentary Trust v. Comm’r, 124 T.C. 304 (2005) (holding that even a trust’sinvestment advisory fees are only deductible to the extent that they exceed two-percent of the trust’sadjusted gross income).467 See IRC § 67(e).468 See IRC § 67(a).469 See Honodel, supra note 62, at 364. (citing Regulation § 1.212-1(n) and Woodward v. Commissioner,397 U.S. 572, 575 (1970)).470 Id.471 Id.472 Id.78

Commissioner further summarized the law concerning capital expenditures as follows: “[i]t haslong been recognized, as a general matter, that costs incurred in the acquisition or disposition of acapital asset are to be treated as capital expenditures. The most familiar example of suchtreatment is the capitalization of brokerage fees for the sale or purchase of securities…” 473 Thus,brokerage fees (if paid in the acquisition or disposition of securities) will be classified as capitalexpenditures.Once an expense is properly classified as a capital expenditure under § 263, the basis in thecapital asset (in this case the security) may be adjusted accordingly. IRC § 1016(a) provides thegeneral rule that, “[p]roper adjustment in respect of the property shall in all cases be made…forexpenditures, receipts, losses, or other items, properly chargeable to capital account…” 474 Thus,brokerage fees associated with the purchase or sale of securities may be offset against thepurchase or sale price of stock to decrease a capital gain or increase a capital loss. 475Example II:Tom is a private investor who files his tax return as an individual taxpayer withan adjusted gross income of $80,000. Tom purchased one share of a stock(“Security X”) in 1999 for $100, and paid his broker $5 to execute the purchase.Tom sells Security X in 2004 for $200, and pays his broker $5 to execute thesale.Tom can increase his basis in Security X to the extent of $10 ($5 brokerage fee for purchasingthe stock plus $5 brokerage fee for selling the stock) , leaving him with an adjusted basis of $110in Security X. Tom sold Security X for $200, so his total capital gain is $90 ($200 minus $110).Tom, in effect, has reduced his overall tax liability by $10, having properly adjusted his basis inSecurity X by the amount he paid in brokerage fees.Example III:Same facts as “Example II,” except in addition to brokerage fees, Tom also pays$20 to his investment advisor in 2004.For the reasons set forth in “Example II,” Tom would be permitted to increase his basis inSecurity X to the extent of $10. Tom’s investment advisory fees, however, would not bedeductible. Two-percent of Tom’s adjusted gross income is $1,600 (80,000 * .02). Tom onlyspent $20 on investment advisory fees, which is below the 2-percent floor of $1,600. Pursuant toIRC § 67(a), Tom may only deduct investment advisory fees to the extent that they exceed 2-percent of his adjusted gross income. Thus, Tom’s investment advisory fees are not deductible.C. Summary:When determining the tax treatment of fees associated with securities investments, a taxpayershould look to “whether the services were performed in the process of acquisition or forinvestment advice.” 476 The taxpayer may be able to deduct investment advisory fees (if related toinvestment advice), but only if the taxpayer itemizes his deductions and only to the extent that the473 See Woodward, supra note 74, at 575-576 (citing Regulation § 1.263(a)-2(e) and Helvering v. Winmill,305 U.S. 79 (1938)).474 Id.475 See Regulation § 1.263(a)-2(e).476 See Honodel, supra note 65, at 365.79

fees exceed 2-percent of the taxpayer’s adjusted gross income. With regards to brokerage fees,however, a taxpayer may use those fees as an offset against the selling or purchasing price of thesecurity, without regard to the 2-percent floor or whether the taxpayer itemizes his deductions.IV.Legislative HistoryIt is no secret that provisions in the IRC influence taxpayers’ conduct. Tax legislation may bemotivated explicitly by lawmakers’ desire to encourage or discourage certain behavior bytaxpayers. Some times certain language inadvertently promotes or discourages conduct bytaxpayers. This section will examine the congressional intent behind the enactment of therelevant IRC provisions discussed in this paper.IRC §212 was originally enacted as the Internal Revenue Act (“IRA”) of 1939 as section23(a)(2). 477 No substantive changes were made when the Code number was changed to §212 inthe IRA of 1954. 478 In the 1954 Code, § 212, provided that an individual who has elected toitemize his deductions shall be allowed as a deduction all the ordinary and necessary expensespaid or incurred during the taxable year (1) for the production or collection of income, (2) for themanagement, conservation, or maintenance of property held for the production of income, or, (3)in connection with the determination, collection or refund of any tax. 479 Thus, from 1954 through1986 a taxpayer could deduct investment advisory fees as long as he itemized his deductions,unlike current law where fees must exceed § 67’s two-percent floor in order to be deductible.Regulation 1.263(a)-2, the provision dealing with examples of capital expenditures, waspromulgated on November 26, 1960. Yet, even prior to the Regulation, courts consistently hadheld that brokerage commissions were a proper adjustment to basis. 480 Thus, § 1.263(a)-2 was amere codification of prior case law and practice.The most significant legislative action came by way of the Internal Revenue Code of 1986 (the“1986 Code”). One of the apparent goals of the 1986 Code was to simplify the prior tax laws.The Committee on Ways and Means in the House of Representatives wrote: “The committeebelieves that, where possible, the tax system should be made more simple. The complexity of thecurrent tax system exacts a cost of time, effort, and burdensome recordkeeping. To some extent,this complexity is necessary to assess accurately one’s ability to pay taxes…for the majority oftaxpayers, however, the tax system need not be complex. ” 481 The Committee continued byoffering, what it believed to be, two major simplifications:Perhaps the most important steps taken by the committee bill to reduce thecomplexity found by many taxpayers are the significant increase in the standarddeduction and the imposition of a floor under itemized deductions. Due to thesechanges, an estimated 13 million taxpayers who presently file itemized returnsare expected to file nonitemized returns, which is a 30 percent reduction in the477 See 1 INTERNAL REVENUE ACTS OF THE UNITED STATES: THE REVENUE ACT OF 1954 WITHLEGISLATIVE HISTORIES AND CONGRESSIONAL DOCUMENTS A59 (Bernard D. Reams, Jr. ed. 1982).478 Id.479 Id.480 See Helvering v. Wilmington Trust Co., 305 U.S. 79 (1938).481 See H.R. REP. NO. 99-426, at 58 (1985).80

number of itemized returns. These taxpayers will be freed from the need forrecordkeeping for many incidental expenditures. 482The law prior to the 1986 code was that a taxpayer could deduct investment advisory fees fromhis ordinary income as long as he itemized his deductions. Several proposals were presented tosignificantly restrict this deduction when the 1986 code was enacted. Under the House bill, thetotal of the taxpayer’s miscellaneous itemized deductions would be allowable only to the extentexceeding one percent of the taxpayer’s adjusted gross income. 483 The Senate Amendmentsuggested repealing all miscellaneous itemized deductions that were allowable under then-currentlaw, with the exception of eight deductions (investment advisory fees did not fall within theexception). 484 Thus, the Senate proposed to completely disallow an investment advisory feededuction. Finally, President Reagan’s proposal was as follows: “[t]he miscellaneous itemizeddeductions would be moved ‘above-the-line’ (i.e., would also be deductible by nonitemizers), andallowed only to the extent that, when aggregated with the employee expenses described below,they exceeded one percent of the taxpayer’s adjusted gross income (AGI).” 485 The finalnegotiated version of the bill subjected miscellaneous itemized deductions to a floor of twopercent of the taxpayer’s adjust gross income. 486Prior to the passage of the 1986 Code, the Joint Committee on Taxation wrestled with the issue ofwhether to impose a floor on miscellaneous itemized deductions. 487 The Committee recognizedcompeting policy considerations in imposing such a floor. 488 The policy in favor of enacting afloor was as follows:In one sense, the use of a deduction floor fosters simplicity. It relieves taxpayersof the need to keep records substantiating incidental expenses unless they havereason to expect that their allowable deductions may exceed the floor. It alsorelieves the Internal Revenue Service of the need to audit and verify deductionsclaimed for numerous small items. The Administration proposal is based on theview that this problem is particularly significant in the case of miscellaneousdeductions, and that taxpayers make numerous errors of law regarding allowabledeductions in the miscellaneous category. 489Clearly an objective of the Committee was to simplify the tax laws and reduce potentialerrors that taxpayers would make in calculating their tax liability. The Committee alsoacknowledged the potential inequity of a floor on miscellaneous itemized deductions:On the other hand, to the extent a deduction that ought in theory to be allowablein full is restricted by the use of a floor, the floor is arguably unfair. It penalizestaxpayers who have deductions that are subject to the floor, in comparison toother taxpayers, by depriving them at least in part of a deduction that may beimportant to the accurate measurement of income. For example, a taxpayer whoearned $1,000 in a stock transaction, but paid a broker $500 to manage his assets,482 Id.483 See 1986 U.S.C.C. & A.N. 4118, at II-33 (1986).484 Id.485 See JCS-44-85, at 10 (1985).486 See 1986 U.S.C.C. & A.N. 4118, at II-33 (1986).487 See generally JCS-36-85 (1985).488 Id at 206489 Id.81

would not be able to deduct the fee if his or her total miscellaneous deductionsequaled less than one percent of adjusted gross income. Taxpayers withmiscellaneous deductions might not object to the burden of keeping accuraterecords if the result were to reduce their tax liabilities. 490The Committee’s contemplation of situations where taxpayers would be deprived of a deductiondemonstrates a clear recognition that the imposition of a floor would be unfair to some taxpayers.The Committee also considered the implications of classifying miscellaneous deductionsas “above-the-line” or “below-the-line” deductions:First, there may be a policy decision that all taxpayers should be allowed tobenefit from the deduction. However, it is not necessarily clear why this concernshould be more applicable to miscellaneous deductions than, for example, todeductions for home mortgage or consumer interest, casualty losses, or medicalexpenses. Further, nonitemizers benefit from the allowance of deductions thatcan be claimed only by itemizers, since the zero bracket amount is intended toreflect such expenditures typically made by nonitemizers.Second, as a matter of tax policy there is a general distinction between above-thelineand itemized deductions, although many deductions may be allocatedinconsistently with this theoretical distinction. In principle, a deduction isallowed above-the-line if, as an expense of generating income, it must besubtracted from gross income in order to arrive at an accurate measurement ofthe taxpayer’s true net income. By contrast, itemized deductions generally areconsidered to reflect personal expenditures which, although not properlydeductible in measuring economic income, are allowed for reasons of socialpolicy…However, in view of the fact that the Administration proposal generally keepsother itemized deductions below-the-line, the proposal to move miscellaneousdeductions above-the-line may instead be based on the view that they areproperly allowable in calculating economic income—a view theoreticallyinconsistent with the decision to allow them only to the extent in excess of afloor, although arguably supportable for simplification purposes. 491Applying the principles that the Committee set forth for classifying deductions as “above-theline”or “below-the-line” it would seem that investment advisory fees are more like expenses ofgenerating income as opposed to personal expenditures. Once again, however, it seems as thoughsimplicity trumped that rationale.Judging by the legislative debates and the differing proposals from the House ofRepresentatives, Senate and President Reagan, it is apparent that the legislative focus wasprincipally centered around simplifying the tax code by means of reducing the number ofitemizing taxpayers. Unfortunately, Congress did not indicate any concern over thefiduciary duties of investment professionals and the fact that the 1986 Code would favorthe use of brokers rather than investment advisors. The next section will examine the490 Id.491 Id. at 207.82

fiduciary duty implications applicable to investment professionals since Congress ignoredthis important issue in enacting the 1986 Code.V.Fiduciary Duties of Investment Advisors and BrokersInvestment advisors are regulated by the SEC and brokers are regulated by the NASD. 492Although these terms are sometimes used synonymously, their roles with clients and fiduciaryduty standards are very different. 493 As Professor Jill Gross has explained, “[o]n the spectrum ofadvisors, brokers are the least accountable to investors.” 494 That being said, there are welldefinedduties that brokers and investment advisors owe to their respective clients.A. Duties Owed by Brokers:The degree of duty owed by brokers depends on the relationship between the broker and hisclient. “It is settled law, however, that brokers are not liable for their customers losses unlessthey made an unsuitable recommendation, exercised control over the account, or made a materialmisstatement of fact. A broker can stand by even if he knows that the customer is engaged in anunsuitably risky investment strategy without an understanding of the risks involved.” 495 Theimportant concept here is that a brokers relationship with his customer is not generally considereda fiduciary one, “unless the broker exercises investment discretion over the customer’saccount.” 496 The following subsections will set forth specific duties that brokers owe to theirclients.i. Suitability:Brokers have a duty to recommend only those securities that they reasonably believe are suitablefor the customer, based on information disclosed by the customer about his other securityholdings, his financial status, and his investment objectives. 497 NASD Rule 2310(a) states: “(a) Inrecommending to a customer the purchase, sale or exchange of any security, a member shall havereasonable grounds for believing that the recommendation is suitable for such customer upon thebasis of the facts, if any, disclosed by such customer as to his other security holdings and as to hisfinancial situation and needs.” 498 Paragraph (b) goes on to provide that prior to the execution of atransaction recommended to a non-institutional customer, brokers should make reasonable effortsto obtain information concerning the customers: (1) financial status; (2) tax status; (3) investmentobjectives; and (4) such other information used or considered to be reasonable by such member orregistered representative in making recommendations to the customer. 499492 See supra note 14 and accompanying text.493 See Black supra note 18, at 35 (Professor Black argues that investors are often confused about the rolesand responsibilities of the various financial services professionals).494 See Starkman, supra note 13 (quoting Professor Gross, Associate Professor of Law, Pace UniversitySchool of Law; and co-director of Pace Law’s Securities Arbitration Clinic).495 Barbara Black and Jill I. Gross, Economic Suicide: The Collision of Ethics and Risk in Securities Law,64 U. Pitt. L. Rev. 483, 486.496 See Black, supra note 18, at 36.497 See Black and Gross, supra note 100, at 490.498 See NASD Conduct Rule 2310, NASD Manual (CCH) 4111 (1998) [“NASD Manual”], available athttp://nasd.complinet.com/nasd/display/display.html?rbid=1189&element_id=1159000466 (last visitedFebruary 21, 2006).499 Id.83

ii.Churning:If a broker exercises control over his customer’s account, excessive trading or churning mayoccur. The SEC describes churning on its website as, “excessive buying and selling in youraccount by your broker. For churning to occur, your broker must exercise control over theinvestment decisions in your account, either through formal written discretionary agreement orotherwise, and must engage in excessive trading in light of the financial resources and characterof the account for purpose of generating commissions.” 500 As can be surmised from the SECdefinition, churning can occur whether a broker has actual authority to make investment decisionsor de facto authority. 501NASD Conduct Rule 2310-2(b)(2) prohibits excessive trading or churning, 502 but recognizes thatthere is not a bright-line rule to determine what constitutes excessive trading: “[t]here are nospecific standards to measure excessiveness of activity in customer accounts because this must berelated to the objectives and financial situation of the customer involved.” 503 With regards todiscretionary accounts, NASD Conduct Rule 2510(a) states, “[n]o member shall effect with or forany customer’s account in respect to which such member or his agents or employee is vested withany discretionary power any transactions of purchase or sale which are excessive in size orfrequency in view of the financial resources and character of such account.” 504The New York Stock Exchange 505 (“NYSE”) also has a churning rule which provides: “Nomember or allied member or employee of a member organization exercising discretionary powerin any customer’s account shall (an no member organization shall permit any member, alliedmember, or employee thereof exercising discretionary power in any customer’s account to) effectpurchases or sales of securities which are excessive in size or frequency in view of the financialresources of such customer.” 506 Thus, if a broker exercises control over his client’s account, hehas a duty to refrain from excessively trading or churning the account.iii.Material Misrepresentations:Brokers may be liable for fraud or negligence if a client seeks their advice about selling orholding a security, and the broker provides false or misleading information. 507 Federal securitieslaws provide guidance on the standard of conduct that brokers owe to their clients with regards todisclosure of information. Section 17(a) of the SEA of 1933, makes it unlawful for any person,by the use of the mails or interstate commerce, “in the offer or sale of any securities: (1) toemploy any device, scheme, or artifice to defraud, or (2) to obtain money or property by means ofany untrue statement of a material fact or any omission to state a material necessary in order tomake the statements made, in the light of the circumstances under which they were made, notmisleading, or to engage in any transaction, practice, or course of business that operates or would500 See SEC website, supra note 14, at http://www.sec.gov/answers/churning.htm (last visited February 21,2006).501 See also Black and Gross, supra note 100.502 NASD views churning as a violation of a brokers duty of fair dealing.503 See NASD Conduct Rule 2310-2, NASD Manual, supra note 103.504 See NASD Manual, supra note 103, at Conduct Rule 2510(a).505 The NYSE regulates brokers who are authorized to trade on its exchange.506 See NYSE Rule 408(c), available athttp://rules.nyse.com/nysetools/Exchangeviewer.asp?SelectedNode=chp_1_1&manual=/nyse/nyse_rules/nyse-rules/ (last visited on February 21, 2006).507 See Black, supra note 18, at 36.84

operate as a fraud or deceit upon the purchaser.” 508 Section 17(a) does not apply to purchases ofsecurities. An individual is a seller under Section 17(a) even though he does not own the securitybeing sold, so long as: (1) he solicits the transaction and (2) his solicitation is motivated bypersonal financial gain. 509 The second prong is satisfied if the person anticipates a share of theprofits, even though he may not receive a salary or a commission for his selling efforts. 510In addition, Section 9(a)(4) of the SEA Act of 1934 provides guidance on false or misleadingstatements. Section 9(a)(4) makes it unlawful for any dealer or broker “to make, regarding anysecurity registered on a national securities exchange, for the purposes of inducing the purchase orsale of such security, any statement which was at the time and in the light of the circumstancesunder which it was made, false or misleading with respect to any material fact, and which heknew or had reasonable grounds to believe was so false or misleading.” 511 Section 9(a)(4), unlikeSection 17(a), applies to both fraudulent purchases and sales. 512 However, the scope of 9(a)(4) isnarrower than Section 17(a) in that: (1) it applies only to exchange-listed securities; (2) itprohibits fraudulent misstatements but not omissions; (3) it requires that the broker have thespecific purpose of inducing the purchase or sale of the security; and (4) it expressly requires thatthe broker know or have reason to know of the falsity of the statement. 513B. Fiduciary Duties Owed by Investment Advisors:In stark contrast to the duties owed by brokers, investment advisors are held to a fiduciary dutystandard—regardless of the degree of control investment advisors exercise over a client’saccount. The principal that investment advisors owe their clients a fiduciary duty is not expresslymandated by the IAA, but in SEC v. Capital Gains Research Bureau, Inc., 514 the United StatesSupreme Court held that Section 206 of the Act imposes fiduciary duties on investment advisorsby operation of law. 515 Section 206 of the IAA states, in relevant part, “[i]t shall be unlawful forany investment adviser, by use of the mails or any means or instrumentality of interstatecommerce, directly or indirectly—(1) to employ any device, scheme, or artifice to defraud anyclient or prospective client; (2) to engage in any transaction, practice, or course of business whichoperates as a fraud or deceit upon any client or prospective client.” 516 An investment advisor mayviolate Section 206(2) if he fails to act with “the utmost good faith” with respect to his clients,and or fails to satisfy its affirmative duty to disclose all material facts and conflicts of interest. 517In general there are three main fiduciary duties which are enforceable under IAA §206: (1)disclosure; (2) best interests of clients; and (3) fairness. 518Disclosure. The first fiduciary duty, of disclosure, requires investment advisors to disclose allmaterial facts about the advisory relationship. 519 The standard for materiality is: whether there isa substantial likelihood that a reasonable client would attach importance to it. 520508 SEA of 1933 §17(a), 15 U.S.C. §77q.509 Norman S. Poser, Broker-Dealer Law and Regulation, 3 rd Ed. (supplemented 2005), §3.01[B].510 Id., citing Meadows v. Securities and Exch. Commn., 119 F.3d 1219, 1225-1226 (5 th Cir. 1997).511 SEA of 1934 §9(a)(4), 15 U.S.C. §78i(a)(4).512 See Poser, supra note 114.513 Id.514 375 U.S. 180, 191 (1963).515 Investment Advisors: Law & Compliance, Matthew Bender & Company, Inc. (2005), §9.02.516 15 U.S.C. §80b-6.517 See SEC v. Capital Gains, supra note 119 at 192; and Investment Advisors, supra note 117.518 See Investment Advisors, supra note 120.519 Id.85

Acting in Client’s Best Interests. Investment advisors also has a duty to act only in the bestinterests of its clients, which requires that the advisor place his clients interests above his owninterests when a conflict arises. 521 If a conflict may be present, the investment advisor mustdisclose the existence of any conflict and obtain his client’s consent to the applicableagreement. 522 Courts and the SEC have placed a great deal of emphasis on the duty to disclose allmaterial conflicts of interest. 523Fairness. An investment advisor also has a fiduciary duty to treat each client fairly. 524 What thisfiduciary duty requires is that the investment advisor makes certain that he does not benefit oneclient to the disadvantage of another. 525Duty of Care. The SEC has also has read an implied duty of care into Section 206. 526 Investmentadvisors must exercise due care when recommending securities, however, this duty does notextend to the eventual success or failure of his recommendations. 527 It is currently unclear howthoroughly an investment advisor must investigate the securities he recommends. 528 Investmentadvisors are required to familiarize themselves with the facts which provide the basis for theirrecommendations and verify them if the source of the information has a substantial interest in thesecurity in question. 529 Courts have held investment advisers liable for failing to disclose theywere relying on third-party analysis, especially when the accuracy and comprehensiveness of theinformation was in question. 530Suitability. Investment advisers also have an implicit duty under the IAA, to provide onlysuitable investment advice to their clients. 531 The suitability doctrine has arisen predominantlyfrom SEC enforcement actions. A typical situation is where the client’s circumstances called forconservative or low-risk investments or when the adviser represented that the investments wouldbe low risk. 532 Other cases have involved aggravating factors, such as the investment in securitiesof the advisor or its affiliates, or the use of margin. 533 The SEC has articulated policy statementsregarding suitability obligations of investment advisors and the steps which advisers should takein satisfying those obligations. 534VI.520 See Basic, Inc. v. Levinson, 485 U.S. 224, 232 (1987); TSC Indus., Inc. v. Northway, Inc., 426 U.S.438, 449 (1976).521 See Investment Advisors, supra note 120.522 Id.523 Id.524 Id.525 Id.526 Id.527 Id. citing, Jones Mem’l Trust v. Tsai Inv. Servs., Inc., 367 F. Supp. 491, 497, 500 (S.D.N.Y. 1973)(standing for the idea that duty of care does not oblige an advisor to “prevent any decline in the client’sportfolio”).528 Id.529 Id.530 Id.; See also, People v. Goldsmith, 86 N.Y.S.2d 12 (1948) (adviser concealed a material fact by failingto disclose that his market letter was based not on recognized sources, but on comic strips).531 Id. at §9.03.532 Id.533 Id.534 Id.86

Policy ConsiderationsIn light of the preferable tax treatment of brokerage fees as compared with investment advisoryfees, the higher standard of fiduciary duties owed by investment advisors versus brokers, andCongress’ failure to consider the implications of favorable tax treatment for brokerage fees,Congress should revisit the issue. Specifically, the law should be changed to level the playingfield by allowing a basis adjustment for investment advisory fees, similar to that for brokeragefees, or it should grant preferential treatment to those fees.Because of the tax law’s impact on taxpayer behavior, it is critical that the tax laws do notprovide incentives to retain financial services providers who have limited fiduciary duties to theirclients. For some investors, brokers may be the most optimal investment professional if thatinvestor simply needs a transaction executed. Other investors may be best suited to hireinvestment advisors to manage their accounts. Congress should be concerned with the class ofinvestors who are unaware of the differences between brokers and investment advisors. 535 With atax policy that favors brokers, the investor motivated by tax concerns conceivably could choosebrokerage services without knowledge of the fiduciary consequences. If an investor is uncertainon which type of account to open, the tax law should not favor of a brokerage accounts due to theprovisions in the IRC.There is also a danger that financial services providers will encourage investors to open brokerageaccounts because it translates into lower fiduciary obligations on the part of the companies.Vanguard’s website, for example, provides information on how cost basis is calculated: “[y]ourcost basis is generally the price you paid for your shares. Make sure you include reinvesteddividends or capital gains distributions as part of your cost basis, since these are consideredpurchases or shares. Sales charges or transaction fees you paid when you bought your shares arealso part of your cost basis. (Other fees charged by a mutual fund, such as account maintenancefees, don’t affect your cost basis).” 536 While Vanguard is not explicitly stating that investorsshould open brokerage accounts, the website does note an advantage in incurring brokerage feesas opposed to account maintenance fees. Further, account representatives could potentiallymention to investors that their commissions will be added to the security’s basis, and thereforewill not be as costly as investment advisory fees. The savvy investor likely will understand thediffering fiduciary relationships of brokers and investment advisors, but those investors will alsobe better prepared to recognize potentially fraudulent activity and account irregularities. Lesssophisticated investors, however, are not likely to understand the fiduciary relationships ofvarious investment advisors and may not be able to identify misconduct.Understandably, one of Congress’ goals in enacting the 1986 Code was simplicity. 537 Simplicityshould not, however, come before protecting investors from fraudulent conduct. Even assuming,arguendo, that the IRS has valid reasoning for providing preferential tax treatment for brokeragefees versus investment advisory fees, the fiduciary duty issues cannot be ignored. It is relativelysimple and sensible to adjust a security’s basis for acquisition or disposition costs (brokeragefees). Because investment advisory accounts are usually geared towards maintenance andmanagement, it may be difficult and impractical to allow a basis adjustment for those types offees. In attempting to simplify the Code, Congress failed to consider the implications of heavilyfavoring brokers fees over investment advisory fees. Congress should completely reverse its535 See Black, supra note 18, at 35.536 See http://flags hip2. vanguard.com/VGApp/hnw/content/ PlanEdu/ General/PEdGPTaxSavCalcCostBasisContent.jsp (last visited February 21, 2006).537 Whether or not that was achieved is a matter of significant academic question.87

position and encourage the use of investment advisors as opposed to brokers. The next sectionwill propose ways Congress could rectify this inequity.POLICY IMPLICATIONS FOR CHARITIESVII.The fact that brokerage fees result in a better tax result for individual investors is, of course, notrelevant to charities that do not pay tax. On the other hand, it is clear that both privatefoundations and public charities should try to find investment advice that is practical and useful.As Jane Nober has recently pointed out, “foundations need to ensure that the deals they makewith money managers are wise investments as well.” 538 If the Code encourages individuals to usebrokers rather than investment advisors, it may well be that charities may follow that pathbecause the costs of brokerage services are lower than investment management services.This may well be inconsistent with the fiduciary duties of trustees of charities or directors ofcharitable corporations, whose duties of care and loyalty have an obvious impact on whatdecisions should be made with regard to investments of the funds placed in their care. Publiccharities and private foundations are becoming more sophisticated in investment and businesstransactions with each other and with individuals. While these transactions are opportunities forsignificant benefit, they are also encumbered with risk, both tax and financial. In makinginvestment decisions, the fiduciaries of charities are “under a duty similar to that of the trustee ofa private trust.” 539 Given that fact, the choice to use an investment advisor should not begoverned solely by market principles.In the end, of course, the aim of investing funds for charities should have both charitable andfinancial goals. As one long-time donor has put it: “Charitable giving strategy is like investmentstrategy in that you want your “investments” to be successful—in this case measured bycharitable rather than financial objectives. A good philanthropic “portfolio” should bediversified, with some seasoned organizations and some smaller and more venturesomecauses.” 540VIII.Proposed Revisions to the Internal Revenue CodeHaving set forth the basic premise that the IRC improperly provides favorable tax treatment tobrokerage fees, this section will propose some alternatives to the IRC’s current provisions.One idea would be to disallow basis adjustments for brokerage fees. This approach wouldcertainly be met with a great deal of opposition, especially considering the drastic consequencethis provision would have on taxpayers’ capital gains. Further, brokerage firms would no longerbe able to tell their clients that commissions would be a proper basis adjustment. From a fairnessstandpoint, it seems counter-intuitive to repeal a long-standing rule that brokers commissions area proper basis adjustments. Thus, instead of altering the treatment of brokerage fees, it is likely538 Jane C. Nober, Legal Brief, Conflicts of Interest, Part 3, in Foundation News and Commentary,September/October 2004, available at http://www.foundationnews.org/CME/article.cfm?ID=3006.539 Marion Fremont-Smith, GOVERNING NONPROFIT ORGANIZATIONS (Belknap, Harvard 2004) at 190-191(citing Restatement (Second) of Trusts, §389 (revised)).540 David A. Strawbridge, in BEYOND, the T. Rowe Price magazine on charitable giving, available athttp://www.programforgiving.org/newsletter/winter02.pdf#page=5.88

more advantageous to address alternatives to the current IRC provisions dealing with investmentadvisory fees.Congress could revise the tax laws to allow a basis adjustment for investment advisory fees,thereby granting equal treatment for the both types of fees. That proposal would be logicallysound because investment advisory fees are incurred in managing capital assets (securities), andshould therefore be proper adjustments to basis. Further, it would place investment advisory feeson the same footing as brokerage fees and would eliminate the preferential treatment of brokeragefees.Another idea would be to treat investment advisory fees as itemized deductions, instead ofmiscellaneous itemized deductions—thereby eliminating the two-percent floor requirement ofIRC § 67(a). It is doubtful that this revision would be codified because it would significantlydecrease the adjusted gross incomes of taxpayers who use investment advisors. From a policystandpoint, however, this revision would encourage taxpayers to seek investment professionalswho owe them a higher level of fiduciary duty. Further with the heightened fiduciary duties,there may be a decline in securities disputes; or alternately, investors will have an easier timerecovering monies lost from unscrupulous behavior.A less desirable alternative would be to decrease the floor to one-percent of a taxpayer’s adjustedgross income, as the House of Representatives proposed for the 1986 Code. 541 With a lowerfloor, taxpayers would be more likely to get some tax advantage from using investment advisors.Even so, the disparity with regards to brokers’ fees would still be significant considering there isa proper basis adjustment without regard of a taxpayer’s decision to itemize his deductions norhis adjusted gross income.Finally, Congress could revert back to President Reagan’s proposal 542 of imposing a floor oninvestment advisory fees, but categorizing those deductions as “above-the-line” deductions—thereby eliminating the need to itemize deductions in order to recognize such tax benefit. Again,an imposition of a floor would prejudice those taxpayers whose investment advisory fees do notexceed the floor.Optimally tax laws should be rewritten to grant preferential treatment to investment advisory fees.However, the most practical and reasonable revision would be to treat investment advisory fees asproper adjustments to basis. Since Congress was concerned with simplicity in the tax laws, thisproposal would be consistent with that strong policy consideration. Recognizing investmentadvisory fees as proper basis adjustments would arguably be simpler than the current tax lawbecause it would eliminate taxpayers’ need to calculate the two-percent floor and to decidewhether to itemize their deductions. Further, this revision would provide an element ofconsistency in the tax treatment of investment advisory and brokerage fees. Eliminating thepreferential treatment of brokerage fees would have a positive impact on the securities industryby accounting for the fiduciary duty implications of brokers versus investment advisors.VIII.Conclusion541 See supra note 87 and accompanying text.542 See supra note 90 and accompanying text.89

Due to the number of Americans and of American charities investing in securities markets, 543there needs to be as much protection for them as possible to prevent misconduct. While theprimary burden for protecting investors rests on the SEC, tax laws could be an important sourceof aid. The current tax law is seriously flawed in that it provides a considerable motivation fortaxpayers to retain brokers rather than investment advisors to manage their investment accounts.Brokers are required to meet a level of fiduciary duty that is significantly lower than that ofinvestment advisors, yet brokerage fees are granted preferential tax treatment. At a minimum, theIRC should be modified to treat investment advisory fees and brokerage fees equally as properadjustments to basis. A better alternative would be to amend the IRC to grant preferable taxtreatment for investment advisory fees. Investors deserve investment professionals who are heldto a high level of fiduciary duty; Congress should revise the tax laws with this in mind.543 See Wilkins, supra note 2.90

STUDENT NOTESBUILDING CONSUMER CAPACITY IN BANGLADESH: USAID/NARUCPROJECT FOR REGULATORY CAPACITY BUILDINGBY JASON CZYZ*Through support from the United States Agency for International Development (USAID), theNational Association of Regulatory Utility Commissioners (NARUC) is in the initial stages ofworking with the Consumer Association of Bangladesh (CAB). Founded in 1978, CAB hasworked to protect consumer rights in such vital areas as food safety, women’s health, pricegauging, and environmental sustainability to name a few areas of focus. However, CAB has notbeen involved in energy issues because the energy industry is primarily controlled by theGovernment of Bangladesh (GoB). With the creation of the Bangladesh Energy RegulatoryCommission (BERC), CAB has become more interested in advocating consumer rights in thefield of energy.BERC came into existence through a law passed by the Bangladesh National Assembly in 2003.BERC has the standard powers of an energy regulatory body, their authority covers licensing,tariffs, consumer protection, etc. In April 2004, the GoB appointed two Commissioners and theChairman was appointed in June 2005. The appointment of the remaining two Commissioners isstill pending GoB action. To date, the BERC suffers from a lack of technical staff, their onlystaff consisting of borrowed staff from the utilities BERC is supposed to regulate.NARUC began working with BERC in June 2004, providing technical assistance and training.This collaboration resulted in BERC’s first public hearing, the licensing of several captive powerproducers, and the development of an organization chart and position descriptions. In addition,NARUC and BERC have developed a number of procedural and technical regulations, includinga license regulation.As with many nascent regulators around the world, the BERC is subject to outside resistance,which has hampered its efforts to become fully operational and from asserting its legallymandated authority. Unlike in many developing countries, regulation developed in the UnitedStates because of popular outcry against the pricing practices of monopoly industries, such as therailroads and granaries. In developing countries, regulatory agencies typically develop frominternal political or external (donor) pressure to encourage investment in the energy sector. Thisis not to say that consumer protection is not included in the regulator’s mandate, it just happensthat pressing economic concerns have a tendency to minimize the degree of attention given toconsumer rights. However, there is emerging recognition among donors that more attentionneeds to be given to the “demand side” of regulation: developing credibility in the eyes ofconsumers, including increased participation by civil society in regulatory processes. 544Rationale for Working with CAB*Jason Czyz is Deputy Director of International Programs, NARUC and a first year evening law student atthe Catholic University of America’s Columbus School of Law.544 For example, “When regulation doesn’t work (as planned),” Bernard Tenenbaum, World Bank EnergyWeek 2006.91

Apart from the importance of encouraging civil society participation in the energy sector, whichwill hopefully lead to enforced consumer rights and better governance in Bangladesh’s energysector, there are also strategic reasons directly related to the development of BERC. As statedabove, BERC and many nascent regulators face significant operational hurdles within theirgovernments and within the industries they are supposed to regulate. Sometimes, the industriesare supportive of the creation of a regulator, but this is less likely in a system predominately runby state-owned enterprises.NARUC’s goal in working with CAB is to create awareness among consumers in Bangladeshabout:1. The existence, role, and responsibilities of the BERC.2. Consumer rights and responsibilities.3. The need for consumers to participate in the regulatory decision making process tosafeguard their rights.4. Building capacity within representative organizations such as CAB so that the associationmay meaningfully represent consumers and disseminate information to consumers.5. The need to sensitize BERC and the utilities to consumer issues.In collaboration with CAB, NARUC would like to foster a greater public understanding of thebenefits of regulation. Ideally, this work will not only lead to substantive rights for consumers,but will also build both political and public support for an autonomous regulator with theauthority necessary to regulate Bangladesh’s energy sectors.Achieving these goals will be accomplished through workshops for CAB volunteers (includingoutside of Dhaka), creation of a regular section on energy in CAB’s newsletter, and targetedtraining (both legal and technical) for senior CAB staff so that they will be able to meaningfullyparticipate in BERC public hearings. This project will also sponsor CAB participation atcommunity events to disseminate information about BERC, conservation, and other importantenergy topics.In addition, NARUC intends to work with the Energy Reporters Forum (ERF) to includejournalists’ participation in BERC hearings as well as assist them with providing informationabout BERC’s decisions and regulatory developments to the public. The ERF is quite active andvocal within Bangladesh and are in an ideal position to raise public awareness about consumerrights and the functioning of the regulator.The idea behind this undertaking with CAB is to build mutual understanding between consumersand regulators for the improvement of Bangladesh’s energy sector. Bangladesh is currentlyexperiencing a power shortage that is unlikely to end soon. Investment in Bangladesh’s energysector and improvement to the energy sector will only be sustainable if the efforts are transparentand promote sound governance. Bangladesh is one of the most corrupt countries in the world,and without an effective regulator the situation is likely to continue to deteriorate. However,BERC is going to need public support in order to assert its mandate, overcome governmentresistance, and create a strong energy sector in Bangladesh.92

CASE NOTESC A N A D I A N S U P R E M E COURT GIVE S STRONG EN D O R S E M E N TT O FREEDO M OF R E L I G I O NBY TERRANCE S. CARTER AND ANNE-MARIE LANGAN *ASSISTED BY NANCY E. CLARIDGEINTRODUCTIONThe Supreme Court of Canada has sent a strong message that Canada’s public educationinstitutions must embrace diversity and develop an educational culture respectful of the right tofreedom of religion. In its decision in Multani v. Commission scolaire Marguerite-Bourgeoys(“Multani”), 545 the Court confirmed the right of an orthodox Sikh student to wear his ceremonialdagger at school. The Court concluded that the Charter of Rights and Freedoms (the “Charter”)establishes a minimum constitutional protection for freedom of religion that must be taken intoaccount by the legislature and by administrative tribunals. Safety concerns must be unequivocallyestablished for the infringement of a constitutional right to be justified. As such, the Court gavenew guidance to administrative bodies dealing with Charter issues, declaring that administrativebodies must apply the principles of constitutional justification when a Charter right has beeninfringed. This article will review the decision and discuss its implications for future challengesbefore both administrative tribunals and the courts, particularly as it relates to freedom ofreligion.BACKGROUNDIn 2001, a thirteen-year-old orthodox Sikh accidentally dropped his kirpan 546 while in hisschoolyard. 547 The school board sent a letter to the child’s parents authorizing the child to wearhis kirpan to school, provided that he complied with certain conditions to ensure that it wassealed inside his clothing. The child and his parents agreed to this arrangement. However, thegoverning board of the school refused to ratify the agreement citing the school’s Code de vie(code of conduct), which prohibited the carrying of weapons on school grounds. This decisionwas upheld by the school board’s Council of Commissioners. In place of a real kirpan, theCouncil of Commissioners was willing to accept the child wearing a symbolic kirpan in the formof a pendant or one in another form made of a material rendering it harmless.* Terrance S. Carter practices charity and non-profit law as managing partner of Carters ProfessionalCorporation, is counsel to Fasken, Martineau DuMoulin LLP on charitable matters, is a member of theCharities Advisory Committee for Canada Revenue Agency, and editor of www.charitylaw.ca. Anne-Marie Langan practices in the area of human rights with Carters Professional Corporation.545 Multani v. Commission scolaire Marguerite-Bourgeoys, 2006 SCC 6. [2006] S.C.J. No. 6. Justice Majortook no part in the judgment. Justice Charron wrote the majority decision, Chief Justice McLachlin andJustices Bastarache, Binnie and Fish concurring. Justices Deschamps and Abella wrote joint concurringreasons, and Justice LeBel wrote concurring reasons.546 A religious object resembling a dagger that orthodox Sikhs are required wear.547 Orthodox Sikhs must comply with a strict dress code requiring them to wear religious symbolscommonly referred to as the “Five Ks”: (1) the kesh (uncut hair); (2) the Kangha (a wooden comb); (3) thekara (a steel bracelet worn on the wrist); (4) the kaccha (a special undergarment); and (5) the kirpan (ametal dagger or sword).93

The Quebec Superior Court 548 declared the Council of Commissioners’ decision to be of no forceand effect and authorized the child to wear his kirpan at school, provided he complied with thefollowing conditions:• The kirpan must be worn under his clothes;• The kirpan must be carried in a sheath made of wood, not metal, to prevent itfrom causing injury;• The kirpan must be placed in its sheath and wrapped and sewn securely in asturdy cloth envelope, and that this envelope be sewn to the guthra;• School personnel must be authorized to verify, in a reasonable fashion, thatthese conditions were being complied with;• The petitioner must be required to keep the kirpan in his possession at alltimes, and its disappearance must be reported to school authoritiesimmediately; and• In the event of a failure to comply with the terms of the judgment, thepetitioner would definitively lose the right to wear his kirpan at school.The Court of Appeal set aside the Superior Court’s judgment and restored the Council ofCommissioners’ decision, 549 saying that the applicable standard of review was reasonablenesssimpliciter, which requires the tribunal’s decision to be “clearly wrong.” Such a standard requiresthe reviewing court to accept the tribunal’s decision even if the court would have come to adifferent conclusion. Although finding that the child’s father had proven that his son’s need towear the kirpan was a sincerely held religious belief and was not capricious, the court held thatthe child’s freedom of religion could be limited in instances where the safety of others was atissue. The “pressing and substantial objective” to ensure the safety of the school’s students andstaff was directly and rationally connected to the prohibition against wearing a kirpan on schoolpremises and the objective of maintaining a safe school environment. The court reasoned that theconditions imposed at the Superior Court level did not eliminate every risk and only “delayedaccess” to the kirpan, which could be used as a weapon. Allowing a student to wear a kirpanwould require the school board to reduce its safety standards, which would be an undue hardship.As a result, the Court of Appeal held that the Council of Commissioners’ decision was not“clearly wrong” and should not be overturned by the courts.THE SUPREME COURT’S DECISIONThe Supreme Court of Canada disagreed with the Court of Appeal’s decision on the grounds thatadministrative law principles should not be used to avoid a thorough constitutional analysis,particularly where Charter rights are involved. More specifically, the Court stated that such anapproach,… could well reduce the fundamental rights and freedoms guaranteed by theCanadian Charter to mere administrative law principles or, at the very least,cause confusion between the two. … [T]he fact that an issue relating toconstitutional rights is raised in an administrative context does not mean that theconstitutional standards must be dissolved into the administrative law standards.The rights and freedoms guaranteed by the Canadian Charter establish a548 See [2002] Q.J. No. 1131.549 See [2004] R.J.Q. 284.94

minimum constitutional protection that must be taken into account by thelegislature and by every person or body subject to the Canadian Charter. 550Since this complaint was based entirely on the issue of freedom of religion, the Court determinedthat the administrative law standard of review was not relevant. In other words, the child’s fatherwas not challenging the Council of Commissioners’ jurisdiction to approve the code of conduct,or the administrative or constitutional validity of the rule against carrying weapons and dangerousobjects. Rather, the concern was that the refusal to agree to a reasonable accommodation violatedhis son’s freedom of religion. The Court concluded that “it is the constitutionality of the decisionthat is in issue in this appeal, which means that a constitutional analysis must be conducted.” 551Following precedent, this required that the decision be subjected to the test set out in section 1 ofthe Charter. 552Was There a Charter Infringement?The Court found that the Council of Commissioners’ decision clearly infringed the student’sfreedom of religion. In this respect, the Court reviewed previous decisions on the issue, approvingthe key principles, such as:The essence of the concept of freedom of religion is:o the right to entertain such religious beliefs as a person chooses;o the right to declare religious beliefs openly and without fear of hindranceor reprisal; ando the right to manifest religious belief by worship and practice or byteaching and dissemination; 553No one is to be forced to act in a way contrary to his or her beliefs orconscience, subject to such limitations as are necessary to protect publicsafety, order, health, or morals or the fundamental rights and freedoms ofothers; 554It is not for the state to dictate what are the religious obligations of theindividual, it is for the individual to determine; 555Freedom of religion consists of:o the freedom to undertake practices and harbour beliefs, having a nexuswith religion, in which an individual demonstrates he or she sincerelybelieves or is sincerely undertaking in order to connect with the divine oras a function of his or her spiritual faitho this is irrespective of whether a particular practice or belief is required byofficial religious dogma or is in conformity with the position of religiousofficials; 556In order to establish that a claimant’s freedom of religion has been infringed,it must be shown that the claimant sincerely believes in a practice or belief550 Multani, supra note 545 at para. 16 [emphasis in original].551 Ibid. at para. 21 [emphasis in original].552 Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1308.553 R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295 (“Big M. Drug”).554 Ibid.555 Ibid.556 Syndicat Northcrest v. Amselem, [2004] 2 S.C.R. 551 (“Amselem”). For more discussion of the Amselemdecision, see e.g. Terrance S. Carter, “Supreme Court of Canada Adopts Broad View of ReligiousFreedom” in Church Law Bulletin No. 5 (23 August 2004), available at www.churchlaw.ca.95

that has a nexus with religion, and that the impugned conduct of a third partyinterferes with the claimant’s ability to act in accordance with that practice orbelief; 557 and This interference must be more than trivial or insubstantial. 558In Multani, the Supreme Court of Canada noted that the requirement for orthodox Sikhs to wear akirpan at all times was not contested by any party, and accepted that the child’s refusal to wear asymbolic kirpan made of a material other than metal, as suggested by the Council ofCommissioners, was “based on a reasonable religiously motivated interpretation,” 559 and a sincerebelief that he must “adhere to this practice in order to comply with the requirements of hisreligion.” 560 Following the Court’s lead in the Amselem decision, the Court in Multani affirmedthat “the fact that other Sikhs accept such a compromise [wearing a plastic or wooden kirpan] isnot relevant.” 561As the child was being forced to choose between leaving his kirpan at home and leaving thepublic school system, the Court accepted that the infringement was not a trivial or insignificantinterference with the child’s right to freedom of religion. 562 Thus, the Court concluded that theCouncil of Commissioners’ decision to prohibit the wearing of a kirpan on school premisesconstituted an infringement of the claimant’s freedom of religion.Section 1 AnalysisThe principles of constitutional justification have been refined through a long line of decisionssince the inception of the Charter, and are variously described in a number of multi-prongedtests. 563 In order to justify an infringement of a constitutionally protected right, the government orbody acting under governmental authority needs to prove a number of elements:The Charter infringement must be reasonable;The infringement is prescribed by law;The infringement is demonstrably justified in a free and democratic society,which requires that:o there was a pressing and substantial objective;o the means are proportional to the objective:The means are rationally connected to the objective;There is a minimal impairment of rights; andThere is proportionality between the salutary and deleterious effects of therequirement.Applying this test to the Multani case, the Court held that a total prohibition from wearing akirpan to school “undermines this religious symbol and sends students the message that somereligious practices do not merit the same protection as others.” 564 While accepting that the557 Ibid.558 Ibid.559 Multani, supra note 545 at para. 36.560 Ibid. at para. 38.561 Ibid. at para. 39.562 Ibid. at para. 40.563 See e.g. R. v. Oakes, [1986] 1 S.C.R. 103; R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713; BigM Drug, supra note 553.564 Multani, supra note 545 at para. 79.96

objective of ensuring safety in schools “is sufficiently important to warrant overriding aconstitutionally protected right or freedom,” the Court determined that instead of pursuing an“absolute” level of safety in schools, the Council of Commissioners had chosen to pursue a“reasonable” level, which was still recognized as a pressing and substantial objective. The ban onkirpans was found to be rationally connected to this objective. However, on the issue of minimalimpairment, the Court emphasized the importance of religious tolerance in Canadian society andsuggested that the arguments respecting the kirpan being a symbol of violence and its likelihoodto make schools unsafe was not supported by the evidence and was “disrespectful to believers inthe Sikh religion and [did] not take into account Canadian values based on multiculturalism.” 565Fears of harm have to be justified before an infringement of a constitutional right can be justified.The Court rejected “expert” evidence presented by the Council of Commissioners that suggestedthat allowing a student to wear a kirpan would engender a feeling of unfairness among thestudents in a situation similar to the right of Muslim women to wear the chador, because “toequate a religious obligation such as wearing the chador with the desire of certain students towear caps is indicative of a simplistic view of freedom of religion that is incompatible with theCanadian Charter.” 566 The Court concluded that deleterious (harmful) effects of a total banoutweighed the salutary (beneficial) effects, and supported the Superior Court’s decision to allowthe student to wear the kirpan under certain conditions. Such an approach “demonstrates theimportance that our society attaches to protecting freedom of religion and to showing respect forits minorities.” 567CONCURRING REASONSAlthough concurring with Justice Charron’s reasons, Justice LeBel stated that he remained“concerned about some aspects of the problems of legal methodology raised by this case.” 568 Inhis opinion, it is not always necessary to resort to the Charter when a decision can be reached byapplying general administrative law principles or the specific rules governing the exercise of adelegated power, but admitted that “the context of a dispute sometimes makes a constitutionalanalysis unavoidable.” 569 Still, Justice LeBel contends that not all issues can be resolved througha Section 1 analysis, and in some cases the scope and content of a right does not lend itself to thenecessity of justifying an infringement under Section 1. As such, Justice LeBel maintained theimportance of establishing the boundaries of the nature and scope of a right, saying “we not onlyhave rights, we also have obligations.” 570A simplistic formulaic or mechanical approach to reconciling conflicting fundamental rights wassoundly rejected. Instead, it was suggested that the “Court has never definitively concluded thatthe Section 1 justification analysis must be carried out mechanically or that all its steps arerelevant to every situation.” 571 Further, it was suggested that “the approaches followed to apply565 Ibid. at para. 70-71.566 Ibid. at para. 74.567 Ibid. at para. 79.568 Ibid. at para. 141.569 Ibid. at para. 144.570 Ibid. at para. 147.571 Ibid. at para. 150.97

the Canadian Charter must be especially flexible when it comes to working out the relationshipbetween administrative law and constitutional law.” 572Turning to the facts in Multani, Justice LeBel concluded that:… in the case of an individualized decision made pursuant to statutory authority,it may be possible to dispense with certain steps of the [Oakes] analysis. Theexistence of a statutory authority that is not itself challenged makes it pointless toreview the objectives of the act. The issue becomes one of proportionality or,more specifically, minimal limitation of the guaranteed right, having regard tothe context in which the right has been infringed. 573As such, Justice LeBel concluded the Council of Commissioners had not shown that the kirpanban was justified and met the constitutional standard.Justices Deschamps and Abella, while concurring in the conclusion, took a different approach toresolving the issue. It was their view that the case was more appropriately decided through anadministrative law analysis, thereby reviewing the reasonableness of the decision. The justicessuggested that “the prohibition on the wearing of a kirpan cannot be imposed without consideringconditions that would interfere less with freedom of religion.” 574 By applying the code of conductliterally rather than sufficiently considering the right to freedom of religion and theaccommodation measure proposed which posed little or no risk, the justices concluded that theschool board made an unreasonable decision. 575COMMENTARYThe Supreme Court of Canada’s decision is first and foremost an important victory for freedomof religion. In this regard, there is confirmation from the Supreme Court that the principles thathave been developed in such cases as Big M Drug and Amselem are not to be relegated toconstitutional history. The Charter protects the rights of Canadians to entertain their religiousbeliefs and to openly declare those beliefs without fear of hindrance or reprisal. Canadians alsohave the right to manifest their religious beliefs through worship and practice as well as byteaching and dissemination, and to be free from discrimination because of their religious beliefs.Religious observances should be accommodated to the point of undue hardship.The decision is also important for its dictum that there is a role for educators to play inengendering tolerance for others’ culture and religion in Canadian society. As Canada continuesto develop as an increasingly multicultural society, there will be further debates about theboundary between the “public” and “private” domain, and particularly where the two converge.Canadian society is also facing political and social changes. Religious organizations and theirmembers are being forced to respond to these changes.572 Ibid. at para. 152.573 Ibid. at para. 155.574 Ibid. at para. 99.575 Ibid.98

Turning to its impact on courts and administrative tribunals, the decision provides some importantguidance on the interplay between freedom of religion and other socially important values. Aswas conceded by the claimant, the Court confirmed that the freedom of religion can be limitedwhen the individual’s freedom may cause harm to or interfere with the rights of others. However,any limitation has to be done through a reconciliation of the competing rights which must beachieved through a constitutional justification. The Court’s decision makes the importantdeclaration that safety and other concerns must be unequivocally established before aninfringement of freedom of religion is justified.Administrative tribunals and bodies that govern many important areas of our daily lives regularlyencounter decisions involving competing rights. The Multani decision provides importantguidance for them and for the courts as to the proper relationship between administrativedecisions and the protection of fundamental rights and freedoms in Canada. Given the Charter’smere two decades of existence, both courts and administrative tribunals have not yet clearlydefined the exact boundaries between various rights and freedoms contained therein. As the scopeof one’s rights and freedoms can be affected through the decisions of administrative tribunals in avariety of situations, it is very important for there to be a clear standard of review in order toensure that Charter rights are minimally infringed.As noted above, the majority of the Supreme Court of Canada determined that the administrativelaw standard of review was insufficient when determining whether a Charter right infringementhas occurred and whether such an infringement is justified. The Court determined that aconstitutional analysis was required in these situations because “the rights and freedomsguaranteed by the Canadian Charter establish a minimum constitutional protection that must betaken into account by the legislature and by every person or body subject to the CanadianCharter.” 576It is generally recognized that in reviewing an administrative tribunal’s decision, courts will pay“curial deference” within the tribunal’s areas of specialized expertise regardless of whether thereis a “privative clause” protecting the decision from judicial review. “Curial deference” means thatthe courts ought not to intervene in a tribunal’s decision where the tribunal’s knowledge,experience, and expertise with the subject matter, places it in a better position than the reviewingcourt to make the proper determination of the issues involved. 577 A “privative clause” may befound in the enabling legislation for an administrative tribunal, insulating the tribunal’s decisionsfrom judicial review.Notwithstanding the legislature’s attempt to shield the decisions of administrative tribunals fromthe preying eyes of the courts through the use of privative clauses, reviewing courts have tendedto regard privative clauses as just one factor to look at in determining the appropriate standard ofreview. The other factors include: statutory rights of appeal; expertise of the tribunal; the purposeof the enabling legislation as a whole, and the impugned provision in particular; and the nature ofthe problem. 578 Based on the review of these factors, the reviewing court will determine where576 Ibid. at para. 16.577 Melanie Aitken, Russell Cohen and Mariana Silva, “Curial Deference to Administrative Tribunals”(Paper presented to the The Law Society of Upper Canada Special Lectures 2001 Constitutional andAdministrative Law).578 Guy Pratte and Michelle Flaherty, “Appeals, Judicial Review and Standard of Review” in Public LawReference Materials, Law Society of Upper Canada, 48 th Bar Admission Course, 2005 at 127ff.99

upon the spectrum of standards the decision should be reviewed. Although the list is not closed,there are presently three standards recognized on the spectrum:Patently unreasonable: a patently unreasonable decision is one that involves abreach of the rules of natural decision and for which there is no evidence toprovide support. In such situations, the reviewing court will pay the highestlevel of deference and the decision must be found to be patentlyunreasonable for the court to substitute its own decision;Correctness: under the correctness standard of review, the reviewing courtwill pay the lowest level of deference. The decision must be appropriate andproper in the circumstances or the court will substitute its own opinion;Reasonableness simpliciter: falling somewhere in between the two extremes,if the decision is defective, it will survive if it can stand up to a somewhatprobing examination.Applying these standards of review in a case involving a possible Charter violation may result ina diminution of an individual’s rights and freedoms in any given area governed by administrativelaw. Through the application of the stricter constitutional justification analysis, reviewing courtsacross the country now have a mandated method for reviewing administrative decisions dealingwith constitutional issues. Administrative bodies, on the other hand, have a single, commondirection for appropriately and justly dealing with their cases. In the end, individual Canadiansare the winners, as they can ensure that their constitutionally protected rights and freedoms willnot receive a lesser form of protection through administrative tribunals than through the courts.CONCLUSIONDespite the Court’s proclamations concerning the importance our society attaches to protectingfreedom of religion and to showing respect for its minorities, reaction from the general public tothe Multani decision ranged from support to strong opposition. 579 Still, the Multani decision is animportant victory for freedom of religion that can be applied to all rights and freedoms that maybe affected by any one of the thousands of administrative tribunals rendering decisions affectingthe rights and freedoms of Canadians every day. The Court’s conclusion that the administrativelaw standard of review was inappropriate for dealing with the infringement of a constitutionallyprotected right means that the minimum constitutional protection as set out by the Charter mustbe taken into account by the legislature and by every person or body subject to the Charter.Looking at the Multani decision with respect to its impact on the exercise of freedom of religion,it is an important confirmation that in these challenging times for many of the world’s religions,the Courts are still willing to recognize the importance of protecting religious freedom fromunjustifiable interference from state authorities. In the increasingly multicultural society that isCanada, we are bound to continue to run into conflicts between religious freedom and otherimportant social values. As such, it is increasingly important for courts and administrative579 Aside from anti-religious postings on the Globe and Mail website comments section, the decision metwith resistance from parents of school children and educators. As reported in the National Post, a teacher atthe school at the centre of this decision said the court had gone too far and asked if someone could “bring aKalashnikov to school in the name of whatever religion and fire on anyone?” Janice Tibbetts, “Dagger BanStruck Down: Supreme Court says schools must allow kirpans” National Post (3 March 2006) A1.100

tribunals to ensure that an appropriate balance is found between competing rights and obligations.In the Multani decision, the court has firmly established the principles that religious observancesmust be accommodated to the point of undue hardship and that infringement of freedom ofreligion will not be justified unless there is substantial evidence that the infringement is necessaryto protect the safety of the public and that the right is being infringed as minimally as possible.101