Harassment on the part of the Kazakh tax authorities against human rights NGO "International Legal Initiative"

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URGENT APPEAL - THE OBSERVATORY

KAZ 001 /0417 / OBS 040
Restrictions to freedom of association
Kazakhstan
April 12, 2017

TheObservatory for the Protection of Human Rights Defenders, a partnership of FIDHand the World Organisation Against Torture (OMCT), requests your urgentintervention in the following situation in Kazakhstan.

Briefdescription of the situation:

TheObservatory has been informed by reliable sources about the harassment on thepart of the Kazakh tax authorities against human rights NGO "International Legal Initiative" (ILI)[1].

According tothe information received, on April 6, 2017, the Inter-District Economic Courtof the city of Almaty concluded that ILI had failed to pay corporate incometax. To date, the total due amount equals 3,900euros, including a fine and penalties.

This Courtdecision is the result of a lawsuit which was filed by ILI to contest the outcome of atax audit conducted by the Department of State Taxes of the Ministry ofFinances from August to December 2016. The audit had been triggered on thebasis of a letter from a Kazakh citizen requesting tax authorities to inspectNGOs receiving foreign funding. In the letter, the individual referred to ananonymous Internet article reporting about “unclear amounts of funding” grantedto “unclear NGOs of Kazakhstan” that “"may work against the main value ofKazakhstan – stability”" and asked the authorities to verify whether threeNGOs, ILI, “Kadyr Kasiet" and “Liberty”, were paying their taxes.

In an official notification of the audit resultsreceived by ILI on January 9, 2017, the tax audit concluded that grantsreceived by ILI between 2011 and 2015 from certain donors, including theNational Endowment for Democracy (NED), Freedom House, embassies and others,should be subject to income tax under Article 96 of the Tax Code.

The trial hereby set a precedent by de factodepriving ILI of its non-profit status, since corporate income tax is onlyimposed by governments on profit. ILI intends to appeal the decision of theInter-District Economic Court of the city of Almaty.

During the trial, references of fundingterrorism through NGOs came up often as an argument by the Ministry of Finance,despite the fact that the trial related to a tax issue. It is important toemphasise that the Internet article that was officially cited as a reason for atax audit also linked terrorism funding with grants allocated to NGOs. In hisfinal speech, the representative of the Ministry of Finance requested the courtto take into account the fact that the “foreign grant donors, including NED,Freedom [House] and embassies were also present in Ukraine when that momenthappened”, insinuating the role of the latter donors in events in Ukraine,without giving any facts.

The two other human rights NGOs mentioned in theletter "Kadyr Kasiet" and "Liberty" - were also subjectedto similar audits. While the audit of the former is still ongoing, the NGO“Liberty” already filed a lawsuit challenging the legality of a decision toimpose on them a corporate income tax, but in the meantime its bank accountshave already been frozen and the head of the organisation risks being subjectto a travel ban. In the case of non-payment of the tax, all three NGOseventually risk closure.

TheObservatory denounces the sentence handed down against ILI as it sets anegative precedent by de facto depriving an NGO of its non-profitstatus, and urges Kazakh authorities to put an end to all acts of harassment,including at the judicial and administrative level against ILI and all humanrights organisations operating in the country as to ensure the respect forfreedom of association in Kazakhstan.

Actionsrequested:

Pleasewrite to the authorities of Kazakhstan asking them to:

i.Put an end to all acts of harassment, against ILI and all human rightsorganisations in Kazakhstan;

ii.Revise tax legislation to ensure its compliance with international standards offreedom of association;

iii.Unfreeze the bank accounts of human rights organisation "Liberty" since this measure violatesthe right to freedom of association as protected by international law;

iv. Conform with the provisions ofthe UN Declaration on Human Rights Defenders, adopted by the General Assemblyof the United Nations on December 9, 1998, especially Articles 1, 5, 6 and12.2; and

v. More generally, ensure in allcircumstances the respect for human rights and fundamental freedoms inaccordance with the Universal Declaration of Human Rights and withinternational and regional human rights instruments ratified by Kazakhstan.

Addresses:

• Mr. Nursultan NAZARBAEV, President of the Republic of Kazakhstan. Fax: + 7 3172 32 61 82, 007 / 3172 / 32 40 89
• Mr. Kalmukhanbet Kassymov, Minister of Internal Affairs of Kazakhstan. Email: Kense@mvd.kz
• Mr. Zhakyp Assanov, Prosecutor General of Kazakhstan. Fax: +7 7172 506 402
• Mr. Askar Shakirov, Human Rights Commissioner of Kazakhstan. Fax: +7 7172 74 05 48
• Ambassador Ms. Zhanar Aitzhanova, Permanent Representative of the Republic of Kazakhstan to the UN Office and other international organizations in Geneva. Fax: +41 (0) 22 788 66 02. Email: mission@kazakhstan-geneva.ch
• Ambassador Mr. Almaz KHAMZAYEV, Embassy of Kazakhstan in Brussels. Email: brussels@mfa.kz.
• Permanent Delegation of the Republic of Kazakhstan to the OSCE in Vienna. Fax: +43 1 890 80 08 20. Email: kzosce@kazakhstan.at

Pleasealso write to the diplomatic mission or embassy of Kazakhstan in yourrespective country.

***

Paris-Geneva, April 12, 2017

Kindlyinform us of any action undertaken quoting the code of this appeal in yourreply.

The Observatory for the Protectionof Human Rights Defenders (the Observatory) was created in 1997 by FIDH and theWorld Organisation Against Torture (OMCT). The objective of this programme isto intervene to prevent or remedy situations of repression against human rightsdefenders. FIDH and OMCT are both members of ProtectDefenders.eu, the European Union Human Rights Defenders Mechanism implemented byinternational civil society.

To contactthe Observatory, call the emergency line:

• E-mail:Appeals@fidh-omct.org

•

• Teland fax FIDH + 33 (0) 1 43 55 25 18 / +33 1 43 55 18 80

• Teland fax OMCT + 41 (0) 22 809 49 39 / + 41 22 809 49 29

[1] ILI aims to promote the observance of due process of the law in Kazakhstan. Theorganisation promotes freedom of assembly by monitoring peaceful gatherings anddemonstrations, providing strategic legal aid and maintaining a network ofobservers.