Said Gezerdaa: "This is the Path to Creating a Police State"

In February, Aslan Bzhania, the President of Abkhazia, presented a 'foreign agents' bill to the republic's parliament; however, there has been no update on its progress since. Recently, media outlets have reported the closure of accounts belonging to the 'Centre for Humanitarian Programs' (CHP) by the Ministry of Taxes and Collections, along with audits of its employees' personal accounts.

This interview with Said Gezerdaa, published by 'Apsny Habar' and translated from Russian, highlights the recent administrative challenges faced by CHP. Gezerdaa details a thorough tax audit conducted in March, which found no faults, and reveals that the organization has overpaid taxes according to the Ministry’s own admission. Despite these findings, on April 9, CHP received a pressing letter from the Ministry demanding specific contracts for certain employees immediately—on the very same day. Gezerdaa argues that this action underscores the continued unfair treatment and targeting by the tax authorities, which he believes is politically motivated.

Apsny Habar: Said, could you please tell us about the recent events at the Centre for Humanitarian Programs?

Said Gezerdaa: These events relate to the closure of our accounts. Recently, at the end of March, a comprehensive tax audit of the Centre for Humanitarian Programs was completed. There were no complaints from the tax authorities. Moreover, we have some disagreements regarding whether we should pay social contributions to non-budgetary funds. We believe we should, despite having a charity certificate and an instructional letter from the Ministry of Taxes and Collections stating that we are exempt from these payments. According to the Ministry, we even overpay taxes. Since 2017, the Centre has transferred about 11 million rubles ($118,800) to non-budgetary funds over the last seven years. We are very conscientious and law-abiding taxpayers.

Am I right in understanding that the 11 million rubles you paid into non-budgetary funds are in addition to the main taxes you pay?

- Yes, that's in addition to everything else. We pay taxes on the payroll fund, plus each employee is taxed on income and pays an additional 1% to the Pension Fund. But, as you can see, this is not taken into account. There is a political agenda, there is a "foreign agents" law, under which they are trying to classify us by any means possible, and there is an aim to marginalise us to a level that would make it easy to adopt this law. And what happens? Despite the positive results of the audit, some time later we received a letter from the Ministry of Taxes and Collections, which they brought to us on April 9th and demanded that we provide contracts for certain CHP employees on the same day, April 9th. I will explain: we have jobs within the organisational staff and contracts outside of our main work. For example, we may enter into a contract to write an article. These contracts do not involve paying a salary but involve paying an honorarium. They all want to make it seem as though by carrying out this educational and expert work, we are engaging in entrepreneurial activities. But that's nonsense, because the definition of entrepreneurial activity is very clearly outlined in civil legislation, and we do not fall under those criteria.

Said, please tell us, what is the reason behind this demand from the tax inspection? Why did it come to you?

- After our accountant and lawyer visited the Ministry of Taxes and Collections, we realised that the request was related to me. For several weeks, there has been an investigation into me as an individual entrepreneur. There are some minor claims, but they are not related to my taxation. The tax representatives wanted to simultaneously check me as an individual. And they tried to attribute to me the fact that, in addition to being an individual entrepreneur, by signing the contracts I mentioned, I was allegedly engaging in entrepreneurial activities. The Ministry of Taxes and Collections lacks a methodology for defining entrepreneurial activity, unlike Russia, where it is clearly stated what constitutes entrepreneurial activity. According to the codes assigned to me by the statistical authorities for the activities I am entitled to, I should not mix my work as an individual entrepreneur with my role as a civil society representative. These are completely different matters. I think there is a certain political motive clearly articulated to us. Because we understand the absurdity of the situation, we did not comply with these harsh demands. The letter from the Ministry even contained a threat to close our accounts, which we also found objectionable. We stated our position correctly, yet firmly. Naturally, this did not satisfy the Ministry, and they closed our accounts without any legitimate basis.

Said, please tell us, what are the reasons for closing an account, and what does the closing of an account mean for your organisation?

- If an audit is ongoing and the organisation resists it by not providing the necessary documents, the auditing body can close the account. Our audit was completed, and there were no complaints. After an audit that ended favourably for the organisation, you cannot start a new one because there is a law protecting the rights of legal entities during audits. It states that a repeat audit can only be scheduled if there are violations that need to be re-examined. Otherwise, a new audit cannot be conducted within the same year. There were no violations, and we do not understand why they are demanding our contracts for providing support to other organisations. To help the listeners understand, I'll say that this contract, for example, involves my acting as a trainer at a seminar or conducting some expertise on behalf of another non-governmental organisation. In this witch hunt, the situation is pushed to the absurd. The legislation guarantees that we, both as individual entrepreneurs and as natural persons, can enter into contracts. It's clear that if you have a location, you sell goods, or provide services, you are not allowed to engage in this activity without registering as an entrepreneur. However, you cannot equate our activity with such kinds of activities where there is a constant turnover of funds, where a person invests money in their business, develops it, and risks incurring losses, etc. At the ministry level, there is generally no understanding of different fields of activity. In our field, we are explicitly forbidden to engage in commerce; I cannot, as an entrepreneur, conduct a seminar. That would mean that civil society as a non-commercial sector would cease to exist if you assign commercial agents to conduct certain tasks. Moreover, there are formal documents from international organisations, donors, which prohibit us from commercialising our activities.

What is the purpose of closing your accounts? What do they hope to achieve?

- It's a way of applying pressure; they want to force us to take specific actions.

Like what?

- They want us to hand over contracts. I want the listeners to know this too, because it could affect anyone. Firstly, the tax office cannot demand personal contracts from an organisation outside any audit; it's not a normal situation. The audit has ended, no ongoing audit exists, so why are you asking for this? It is only possible in cases where there is an administrative or criminal proceeding against specific individuals. Only with a court order or a prosecutor's sanction can regulatory bodies access such information.

Despite this, long before these checks began, the Economic Crimes Unit illegally accessed our personal accounts at Amra Bank and Garant Bank. They obtained statements from our accounts and now they want to see the contracts and compare them with the contract where they somehow think that providing services is entrepreneurial activity. But I have already explained that it is not entrepreneurial activity. You cannot interpret the law as it suits you because, thankfully, there is the court. It seems we will have to sue them.

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The law or the acquisition of this information about your personal accounts from the banks?

- No, of course not. The Economic Crimes Unit sent a request, and the banks, according to the law on banking secrecy, should have denied it. Some banks refused, but others did not. And there, where our accounts are held, they did not refuse; they provided this information very easily and simply. This is a serious violation, and we now have the right to contest these actions in court and have them declared illegal. That's why, for example, we don't want to provide these contracts, on principle. The government initiated illegal checks, completely illegal checks, through illegal actions. They try to discover something, but you are not acting as a state institution, you are operating outside the law. How can this be understood? In such a case, it is very dangerous to cooperate because you legitimise their actions with your actions. So, for example, I said that I do not allow it, you have no basis for such a check, because all my taxes as a natural person, all income and pension contributions are paid. You have no legal grounds. If you don't like my activity as a public person, what can I do? You just have to accept it, that I'm such a bad person for you.

Do you link this to persecution for your critical speeches?

- Not just me, it concerns many of my colleagues. You remember in late December, right before the New Year, the State Security Service conducted some sort of pseudo-investigation, which we completely dismantled, and this will soon become known, I want them to understand that. It is clear that people just did not take this information seriously because it was ridiculous, foolish. You are security service employees; you cannot just throw out such information and forget about it; this is overwhelming incompetence. If you have grievances, there should be some procedural actions. But there was nothing like that. Then, apparently, they decided that they still needed to somehow back up the release of this unclear information, but their information does not match reality. When they came to us, they saw that we were more than conscientious taxpayers, and everything was in order.

Said, what are your actions? How can you respond to this situation? What do you plan to do?

- For now, we are discussing this situation at the administrative level, and I would prefer not to speak about further actions yet. But there are ways to respond to these actions. We see that the actions are not based on law. Regarding the Centre for Humanitarian Programs, the account closure is absolutely arbitrary and has no legal backing. I understand that this is not solely the position of the Ministry of Taxes and Collections, I understand the situation they find themselves in.

Which is?

- They are forced to do this because there is pressure from above. To date, in 30 years, we have not had a single complaint. On the contrary, we have always been at the forefront of making all financial inflows into Abkhazia transparent so that international organisations could align with this system. They absolutely comply with it. But there's an agenda related to foreign agents, and they need to develop it somehow because you see that it has stalled. They need evidence, and they decided to find it in such a strange way. You understand that they have nothing to pin on us, so they start making things up. But the problem, of course, is not only with the clients but also with the executors. There will always be people willing to carry out these terrible assignments, to dig, to pry, to invent, to deliberately misinterpret. This is also activity that violates the law. I think we will think about specific individuals so that they finally understand what they are doing when they play along with illegal actions. The executors won't be able to hide behind the backs of high-ranking officials.

How long can your accounts legally remain closed?

- Well, accounts can remain closed for a long time. You understand that there is no audit, and accounts can only be closed within the framework of an audit that has a set duration. But here it's unclear. They asked for contracts, ah, you don't want to, then we will close you. That's the kind of conversation.

You talk about a series of illegal actions against you by state bodies, even though the law on foreign agents has not yet been passed. What should many people working in the non-governmental sector and members of civil society then expect and think about?

- I always thought that persecuting people, trying to punish them for criticism, was not a trait of our society. But we understand that this law on foreign agents is exactly about that, about someone maniacally persecuting civil society representatives. And now we see that the law has not yet been passed, but such testing is already underway. And there are people ready to do it even without the law. One can only imagine what will happen when the law is passed, what kind of pressure will be exerted on people. At the same time, I wouldn't want to be completely pessimistic; there are decent and good people in this system. But we must realise that we are turning into a police state, where high-ranking officials are required to unquestioningly carry out some unclear assignments, tasks, orders that contradict the law. And they are forced to try to give it a legal form, which does not work. There are certainly legal ways to protect ourselves, but I have experience appearing in courts. And I understand that sometimes in some cases it is simply impossible to convey the truth to anyone. This is the catastrophic situation we are facing. It's a path towards a police state, where the authorities create their own unwritten bureaucratic legislation, and everything else adjusts to it.

Elena Zavodskaya for ApsnyHabar

This article was published by Apsny Habar and is translated from Russian.