Sentencing of the human rights NGO"International Legal Initiative" (ILI)

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URGENT APPEAL - THE OBSERVATORY

New information

KAZ 001 / 0417 / OBS 040.1
Restrictions to freedomof association /

Judicial harassment /Sentencing
Kazakhstan
July 5, 2017

The Observatory for the Protection of Human RightsDefenders, a partnership of FIDH and the World Organisation Against Torture(OMCT), requests your urgent intervention in the following situation in Kazakhstan.

New information:

The Observatory has been informed by its trial observersabout the sentencing of the human rights NGO "International Legal Initiative" (ILI)[1].

According to the information received, during the June-21hearing, the Almaty City Court upheld the decision of the SpecializedInter-District Economic Court of Almaty dated April 6, which had concluded thatILI had failed to pay corporate income tax, and accordingly condemned the NGOto pay a 3,700-euro fine. On July 3, 2017, ILI paid the amount of 3,900 euros,including fine and penalties, but the organisation intends to prepare acassation complaint to challenge this court decision.

The sentencing is related to the outcome of a tax auditconducted by the Department of State Taxes of the Ministry of Finances fromAugust to December 2016, which, through the Statement of Notification n. 1725,concluded that grants received by ILI between January 1, 2011, and June 30,2016, from certain donors, including the National Endowment for Democracy(NED), Freedom House, the Norwegian Helsinki Committee, the Canadian Embassy,the United States (US) Embassy and the US Department of State should be subjectto income tax under Article 96 of the Tax Code[2] (see background information).

During the trial, ILI asserted that according to article134(2) of the Tax Code, non-for-profit organisations registered in Kazakhstan and“participating in the performance of the governmental socialorder”, such as ILI, shall not be subject to corporate taxation. ILI thenargued that these grants should not be subject to Corporation Income Tax (CIT)due to their charitable and non-profit purpose. Additionally, ILI brought intodiscussion the fact that the organisation “Kadyr Kasiet” was not subjected totaxation despite having the same donors as ILI, which would show a differencein treatment to different organisations and would speak of the arbitrariness ofthe decision. Finally, ILI requested the Court to acknowledge the Statement ofNotification n. 1725 had been illegal and thus, should be cancelled.

During the hearing, the Tax Department representative wasnot able to respond to questions posed by the judge. The representative and theprosecutor went on alleging that ILI had not provided all the financialdocuments for inspection. ILI proved on the contrary that all the requesteddocuments had been provided. On his final remarks, the prosecutor requested theCourt to uphold the Specialized Inter-District Economic Court of Almaty’sdecision. A representative of the Coalition for Security of Human RightsDefenders and Activists observed the courtroom to support ILI and freedom ofassociation in Kazakhstan. Representatives of Freedom House and the NorwegianHelsinki Committee also attended the trial.

The Observatory denounces the sentence handed down againstILI as it disregards fair trial standards and sets a negative precedent by defacto depriving an NGO of its non-profit status. The Observatory urges theKazakh authorities to put an end to all acts of harassment, including at thejudicial and administrative levels, against ILI and all human rightsorganizations operating in the country as to ensure the respect for freedom ofassociation, expression and peaceful assembly in Kazakhstan. Kazakhstanauthorities should not be using tax audits to prevent human rightsorganizations from carrying out their work.

Background information:

In August 2016, the tax authorities began inspections 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.

Carried out from August to December, 2016, the auditresulted in the issuing of State of Notification n. 1725, dated December 30,2016, which ordered ILI to pay a fine for alleged failure to pay taxes. ILIreceived a fine of approximately 3,700 euros. In February 2017, ILI appealedthe Department of State Taxes of the Ministry of Finances’ decision in theSpecialized Inter-District Economic Court of Almaty, which resulted in a firstinstance ruling against ILI on April 6, 2017.

The two other human rights NGOs mentioned in the letter"Kadyr Kasiet" and "Liberty" - were also subjected tosimilar audits. The NGO “Liberty” filed a lawsuit challenging the legality of adecision to impose on them a corporate income tax, but unsuccessfully.“Liberty” appealed to the Almaty City Court. However, the NGO “Kadyr Kasiet”was not subjected to taxation, despite having the same donors as ILI. This factdenotes further the arbitrariness on the use of tax legislation to prosecuteindependent human rights organizations and to discredit the work they carryout.

Actions requested:

Please write to the authorities ofKazakhstan asking them to:

i. Putan end to all acts of harassment, including at the judicial level, against ILIand all human rights organizations in Kazakhstan;

ii. Reviewthe court decision of June 26, 2017 in accordance with internationally recognized fair trial standards;

ii. Revise tax legislation to ensureits compliance with international standards of freedom of association;

iv. Conform with the provisions of the UN Declaration on Human RightsDefenders, adopted by the General Assembly of the United Nations on December 9,1998, especially Articles 1, 5, 6 and 12.2; and

v. More generally, ensure in all circumstances the respect for humanrights and fundamental freedoms in accordance with the Universal Declaration ofHuman Rights and with international and regional human rights instrumentsratified by Kazakhstan.

Addresses:

· Mr. Nursultan NAZARBAEV, Presidentof 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, ProsecutorGeneral of Kazakhstan. Fax: +7 7172 506 402

· Mr. Askar Shakirov, HumanRights Commissioner of Kazakhstan. Fax: +7 7172 74 05 48

· Ambassador Ms. Zhanar Aitzhanova,Permanent Representative of the Republic of Kazakhstan to the UN Office andother 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 Republicof Kazakhstan to the OSCE in Vienna. Fax: +43 1 890 80 08 20. Email:kzosce@kazakhstan.at

Please also write to the diplomaticmission or embassy of Kazakhstan in your respective country.

***

Paris-Geneva, July 5, 2017

Kindly inform us of any action undertaken quoting the codeof this appeal in your reply.

The Observatory for the Protection of Human Rights Defenders (theObservatory) was created in 1997 by FIDH and the World Organisation AgainstTorture (OMCT). The objective of this programme is to intervene to prevent orremedy situations of repression against human rights defenders. FIDH and OMCTare both members of ProtectDefenders.eu, the European Union Human Rights Defenders Mechanism implemented byinternational civil society.

To contact the Observatory, call the emergency line:

E-mail: Appeals@fidh-omct.org

· Tel and fax FIDH + 33 (0) 1 43 55 25 18 / +33 1 43 55 18 80

· Tel and fax OMCT + 41 (0) 22 809 49 39 / + 41 22 809 49 29

[1] ILI aims to promote the observanceof due process of the law in Kazakhstan. The organization promotes freedom ofassembly by monitoring peaceful gatherings and demonstrations, providingstrategic legal aid and maintaining a network of observers.

[2] For more information, see ObservatoryUrgent Appeal KAZ 001 / 0417 / OBS 040 published on April 12, 2017.