US embassy cable - 05MINSK1317

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 
-------------------------------------------- 
 
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 
----------------------------- 
 
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