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.

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Smirnov's Legal Layout Lacks Logic
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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.

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BHC Hopes for the Best But Predicts the Worst
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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.

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BHC Calls on West for Support
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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.

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Comment
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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