NO PROTECTION FROM TRIPLE JEOPARDY IN BELARUS

C O N F I D E N T I A L MINSK 001317 SIPDIS SIPDIS E.O. 12958: DECL: 10/19/2015 TAGS: PHUM PGOV BO SUBJECT: NO PROTECTION FROM TRIPLE JEOPARDY IN BELARUS REF: Minsk 601 Classified by Ambassador George Krol for Reasons 1.4 (B,D) ¶1. (C) Summary: On October 11, the Supreme Economic Court (SEC) announced it would retry for the third time the tax authority's case against the Belarusian Helsinki Committee (BHC) for failure to pay back taxes on a European Union (EU) grant. Despite two court decisions in the past eighteen months favoring the BHC, the GOB has constructed a dubious legal basis for retrial. If the SEC overrules the previous decisions, the BHC would face liquidation and criminal charges. The BHC has called upon the international community to issue a statement condemning the GOB's actions and threatening to cut off all foreign aid to Belarus if the SEC forces the BHC to pay the back taxes. End Summary. ¶2. (U) On October 11, SEC Deputy Chairman Yevgeny Smirnov officially protested the SEC's earlier decision to annul the taxes and fines the tax authorities levied against the BHC. Twice in the past eighteen months, Belarusian courts, including the SEC, have ruled the BHC does not have to pay the BYR 155 million [USD 72,000] in back taxes the tax authorities insisted the BHC pay on EU grants. The courts' past decisions were based on a May 1994 memorandum between the EU and Belarus exempting EU grants from Belarusian taxes. ¶3. (C) On October 25, poloff met with Belarusian Helsinki Committee (BHC) deputies Oleg Gulak and Harry Pogoniaylo. They considered Smirnov's action to be a "political instrument to crack down on the BHC." According to them, a letter sent to Lukashenko was the impetus for Smirnov's appeal. The BHC representatives claimed to know who sent the letter to the President, but would not reveal the author's name. After receiving the letter, the Presidential Administration pressured Smirnov into launching the protest. The BHC said that Smirnov is ashamed of his participation in this attempt to overrule the previous decision as it was his own court (i.e. the SEC) that most recently upheld the ruling canceling the BHC's obligation to pay the taxes. -------------- Smirnov's Legal Layout Lacks Logic -------------- ¶4. (C) Smirnov's logic for protesting the SEC's previous decision is dubious at best. First, he denounced the previous decisions absolving the BHC from tax payments as "groundless and not based on the principles of substantive law." Smirnov then stated that the 1994 EU-Belarusian memorandum has no direct application in Belarus due to discrepancies in the Russian translation and failure to implement the bi-lateral agreement into domestic legislation. [Note: According to the hierarchy of Belarusian law, international agreements supercede domestic legislation. End Note.] Finally, Smirnov referenced an income law, which as of January 1, 2002 classified all foreign aid as "income." Therefore, any agency receiving foreign aid is obligated to pay taxes on the income. Since the BHC's project continued until June 2003, Smirnov argued the BHC must pay the taxes. -------------- BHC Hopes for the Best But Predicts the Worst -------------- ¶5. (C) The BHC has issued a press release and plans to send a letter to Smirnov asking him to revoke the protest. If Smirnov refuses, the BHC will send a letter to every member of the SEC Presidium - which is made up of the chairman, his deputies and other SEC judges - requesting they revoke Smirnov's protest. ¶6. (C) If the SEC overrules its previous decision, the BHC predicts the authorities will not hesitate to liquidate the BHC. In addition, the head of the BHC and the chief accountant will face criminal charges, including up to seven years imprisonment and confiscation of personal property. [Note: BHC head Tatyana Protko has periodically faced criminal charges over these taxes, but has also prevailed in court. End Note.] Finally, two other NGOs (Rada and a Slonim based NGO),who were brought to trial under the same charges as the BHC, would be vulnerable to similar overturned decisions. -------------- BHC Calls on West for Support -------------- ¶7. (C) BHC requested that the U.S. Embassy in conjunction with the EU and other Western embassies present a joint statement to the GOB threatening to cut off all foreign aid to Belarus if the SEC overrules its previous decision and forces the BHC to pay the back taxes and fines. The tax money on foreign aid benefits the GOB. The BHC reasoned the West should not give the GOB aid even indirectly through tax payments on foreign assistance since the GOB regularly obstructs the promotion of democracy. -------------- Comment -------------- ¶8. (C) Smirnov's protest is a GOB-directed attack on the BHC. No new developments in the BHC's case have occurred since the SEC handed down its decision in July. Smirnov's arguments are weak, which is to be expected since the SEC already decided this case in favor of the BHC. However, the SEC could rule against the BHC, since the SEC's deputy chairman is initiating this case. ¶9. (C) The BHC's triple jeopardy trial is indicative of a GOB trend to repeatedly try entities for the same crimes. National Social-Democratic Party (Narodnaya Hramada) leader Nikolai Statkevich and Malady Front leader Pavel Severinets were arrested for violating public order during the protests following the October 2004 referendum and served ten-day and 15-day sentences respectively. In May, the GOB rearrested, retried and reconvicted Statkevich and Severinets for the same crime but increased their sentences to three years of limited freedom (reftel). ¶10. (C) The BHC's request that the U.S. and the EU threaten the GOB with cutting all foreign aid would do nothing to change GOB behavior since the GOB wants to curtail foreign assistance, and already gets little to no direct foreign assistance from the U.S. Suspending assistance to NGOs would of course hurt the NGOs more than the GOB. The U.S. and EU OSCE delegation is planning to protest the SEC action at the October 27 Permanent Council. KROL