TAX INSPECTORS UNBLOCK INTERNEWS/EMF BANK ACCOUNTS

C O N F I D E N T I A L MOSCOW 002562

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/30/2017
TAGS: PHUM KDEM SOCI PGOV EAID RS
SUBJECT: TAX INSPECTORS UNBLOCK INTERNEWS/EMF BANK ACCOUNTS

REF: A. MOSCOW 1896

B. MOSCOW 1810

Classified By: Political Minister Counselor Alice G. Wells.
Reason 1.4(d).


1. (SBU) SUMMARY: On May 30, Moscow tax inspectors
acknowledged that an earlier decision to freeze the bank
accounts of Internews/Educated Media Foundation (EMF) had
been a "misunderstanding" and allowed the accounts to be
re-opened. The inspectors' decision in the wake of multiple
interventions by the Embassy and Secretary allows the
beleaguered, USG-funded NGO, which has been providing media
training for regional outlets and journalists, to pay rent
and salaries. Still pending in the EMF case are possible
criminal charges against ex-EMF Director Manana Azlamyan and
a case filed by EMF lawyers to force the return of the NGO's
computer servers and other materials confiscated during a GOR
raid on the organization's offices. EMF's ordeal has been a
blunt reminder to the NGO community of their vulnerability to
GOR prosecution. End Summary.


2. (U) On May 30, the Moscow the Tax Inspectorate reversed
its May 23 decision to freeze the bank accounts of the
Educated Media Foundation (EMF),the successor organization
to Internews. The inspectors had alleged that EMF had not
filed a VAT declaration in the last quarter, a charge that
Aslamazyan denied, according to media accounts. EMF attorney
Viktor Parshutkin told us May 31 that the Tax Inspectorate
had acknowledged that the decision to freeze the account had
been the result of a "misunderstanding." The Inspectorate's
reversal of course frees EMF to pay its rent, salaries, and
other expenses.


3. (SBU) Although able now to discharge its administrative
responsibilities, the work of the NGO remains blocked by an
earlier confiscation, during a raid on EMF headquarters, of
its computer servers and other materials. An EMF-filed case
to force the return of its equipment remains unheard as of
May 31. It has been delayed by changes of court and of
investigatory jurisdiction. In the latest twist, Parshutkin
has filed a new complaint in the Tverskoy Court that, if
accepted, will shift the venue for the third time in less
than one month. The Court has seven working days in which to
announce the date of the trial. Parshutkin was cautiously
optimistic that EMF's equipment would eventually be returned,
and that the organization, at some point in the future, would
be able to resume its work.


4. (SBU) In addition to the impending hearing on the
confiscation of EMF's computer servers and other materials,
an investigation continues on the charge against Aslamazyan
that ultimately prompted the raid of EMF. (Azlamazyan was
charged (reftels) with failing to declare currency above the
allowable limit upon entry into Russia.) According to
Parshutkin, on May 23 Aslamazyan's case was transferred to an
inspector in the Investigative Division, who is reportedly
pursuing the possibility that she was involved in contraband
operations. Contraband charges, if filed against Aslamazyan,
are much more serious than the administrative violation she
was initially investigated for. Parshutkin described the
latest potential development simply as "bad." Aslamazyan is
reportedly in Paris, and is preparing to take a position in
New York working for Internews.


5. (SBU) Because of the uncertainty over EMF's continued
operations, plans for its future are on hold and alternatives
are being considered. EMF had hoped to spin off its Media
and Research Analysis Center and other activities as
commercial enterprises, with some funding from USAID to help
in the transition. Those plans are now stalled. To fill the
void left by the possible crippling of EMF, USAID is
preparing a USD 2.5 million fund (USD 1.6 million more than
was planed for EMF) for a partnership program that will pair
Russian media associations with U.S. or international
counterparts.


6. (C) Comment: The unfreezing of accounts and ability of
EMF to continue operations in Russia, (although without its
current director),if borne out, is welcome news. It follows
multiple interventions by the Embassy and the Secretary with
GOR officials. However, EMF's ordeal has been a blunt
reminder to an already skittish NGO community that they are
under scrutiny and vulnerable to aggressive prosecution.
BURNS