Russia arbitration court rules most tax claims against British Council unlawful
- Russia
- 10/20/2008
A Moscow arbitration court Friday overturned most of Russian government’s tax claims against the British Council, the British government’s cultural relations arm, over the organization’s in-country operations in 2004-2006. The claims were made in late 2006 in the midst of strained relations between Russia and the United Kingdom over the demanded extradition of former Andrei Lugovoy, suspected by UK intelligence services of poisoning former KGB agent and British citizen Alexander Litvinenko. Following the filing of the tax claims, the Russian government issued a directive to shut down the 14 Russian regional offices of the British Council in December 2007. The British Council unilaterally resumed its Russian operations in January 2008 in defiance of what it considered to be the “illegal” shutdown order and filed a lawsuit to dispute the taxation claims.
Russia has clamped down on foreign associations operating within its territory since a controversial law imposing restrictions on nongovernmental organizations (NGOs) took effect in April 2006. The law imposes strict financial oversight on NGOs and provides for dissolution if an organization’s activities is deemed to “threaten Russia’s independence or sovereignty” or if an organization participates in activities deemed to deviate from its mission statement. Then-Russian President Vladimir Putin defended the measure as being necessary to protect against “puppeteers abroad”.
