FINCA ON THE RUN IN TAX CASE

UNCLAS TASHKENT 000842 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV EAID UZ SUBJECT: FINCA ON THE RUN IN TAX CASE REF: A. TASHKENT 515 ¶B. TASHKENT 203 ¶C. 06 TASHKENT 2402 Sensitive but unclassified. Please protect accordingly. ¶1. (SBU) On April 24, Uzbekistan's Supreme Economic Court rejected what likely will be the Foundation for International Community Assistance's (FINCA) final appeal in its ongoing tax dispute with the Government of Uzbekistan (reftels). The court took less than an hour to uphold previous rulings that tax authorities properly imposed and correctly calculated financial penalties on FINCA for alleged violations of Uzbekistan's tax code. In theory, the organization may appeal to the Presidium of the Supreme Economic Court. However, FINCA's lawyer said that in accepting the appeal the Presidium would have to find that the previous decision was grossly incorrect, which is unlikely. The lawyer expects that the tax authorities will now move to confiscate FINCA's remaining assets in country and liquidate the organization. ¶2. (SBU) Post has confirmed that FINCA has moved as many of its remaining assets as possible out of Uzbekistan and has shut its Tashkent office. No FINCA employees were present at the April 24 hearing. The organization's lawyer initially argued for a postponement until a FINCA representative could be present, but after 30 minutes of deliberation (or perhaps asking for instructions from above),the request was denied. Following oral arguments, the court took less than five minutes to reach its final verdict. ¶3. (SBU) Comment: According to FINCA's lawyer, the organization had hoped to put off a Supreme Economic Court decision until after a planned meeting with the Uzbek Embassy in Washington late the week of April 23. The lawyer told the court that FINCA's country representative would be returning to Tashkent. We do not know whether this was simply a smoke screen on the part of the organization to increase its chances of a postponement, but the question now is moot, and we suspect that future FINCA involvement in the case will be done from offshore. PURNELL