RUSSIA'S INTERIOR MINISTRY ACCUSES BRITISH COUNCIL OF TAX EVASION

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MOSCOW, June 11 (RIA Novosti) - The British Council is an ordinary commercial enterprise that shall pay taxes, Tatyana Mironenko, official spokesperson for the Russian Interior Ministry's Economic and Tax Crimes Service, said in a RIA interview.

The British Council's Moscow branch has not produced any papers certifying its diplomatic status, and, according to the Foreign Ministry, the organization has no such status, Ms Mironenko said.

"The status of such foundations is determined by interstate agreements. All other organizations operating in Russia, including the British Council, are seen as ordinary taxpayers," our interviewee said.

In the British Council's case, there is no controversy between market operators nor there is any clash of commercial interests, Ms. Mironenko said. This is why the organization "must pay its taxes in time rather than searching for ways and schemes to evade them."

Earlier, officials at the Foreign Ministry indicated to the media that the British Council's Russian branches were liable to tax as they were not culture departments of the UK Embassy. The British Council's operations are regulated by the Russo-British agreement on cooperation in education, science and culture that was signed on February 15, 1994, ministry officials reminded the media. "As of today, this is the only regulatory document relating to the Council's activity," they said.

This agreement, however, does not assign diplomatic mission status to the British Council's offices in Russia. That status cannot be gained without the government's consent; the Russian government has given no such consent, and the British Council has never asked for it, in the first place, the Foreign Ministry says.

Moscow is keen to promote further consolidation and development of Russo-British relations in education, science and culture. But the British Council's operations in Russia shall be in compliance with this country's legislation, including tax laws.

Lieutenant General Sergei Veryovkin Rakhalsky, Deputy Interior Minister in charge of the Economic and Tax Crimes Service, said at a news briefing that his agency was auditing British Council Offices across Russia. Russia's Interior Ministry finds it worrying that the British Council makes a lot of money by teaching English to Russian learners, yet pays no tax on its incomes to this country's Treasury.

"There is no agreement as yet between the UK and Russia on that organization's activities in Russian territory," Veryovkin Rakhalsky said.

British Council spokesman Harry Cummings confirmed British media reports about searches in the organization's Russian offices May 21. He described as unconvincing the arguments put forward by the Russian side.

The British Council fears the conflict may have a negative impact on its operations in Russia, but it is not going to withdraw, Mr Cummings said. As for the status agreement, the Council has been trying to get it since 2001, but no response from Russian partners has come to date.

At present point, the British Council operates in Russia under the UK Embassy's patronage, and enjoys diplomatic immunity here, the spokesman explained.

The British Council now has fifteen branches across Russia.

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