BC OFFICES TO PAY RUSSIAN TAXES: FOREIGN MINISTRY

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MOSCOW, June 8 (RIA Novosti) - Russian-based British Council offices cannot be regarded as cultural branches of the British Embassy, and so must pay taxes to the host country, the Foreign Ministry press and information department says in a commentary circulated tonight.

Regulating British Council activities in Russia is, for today, only one legal instrument-a Russo-UK agreement of February 15, 1994, on educational, research and cultural cooperation. The agreement does not entitle Council premises to a legation status.

It takes consent of the host government to establish foreign legations. Russia's Cabinet has not made such consent. Britain never applied for one, for that matter, point out ministerial PR.

Russia favors ever closer educational, research and cultural ties with Britain, and is working to promote such contacts.

Meanwhile, British Council offices are to comply with Russian laws, considering their official status. It concerns fiscal arrangements, too, stresses the ministry.

Russia's Federal Service for Economic Crime and Tax Evasion under the Interior Ministry is checking British Council financial activities throughout Russia, Lieutenant-General Sergei Verevkin-Rakhalsky, service president and Deputy Interior Minister, said to a news briefing yesterday.

The British Council is not paying taxes to Russia, though it makes good money on English language teaching. Its incomes have made the Interior Ministry sit up and take notice-all the more so as there is no bilateral understanding for now on British Council activities in Russia, remarked the general.

Police searches swept regional British Council offices in the entire Russia, May 21, British-based media outlets reported today. Harry Cummings, Council spokesman, confirmed the facts. He referred to Russian arguments as "doubtful".

The British Council is badly alarmed as the developments may impair its work. To give up presence in Russia is the last thing the Council intends to do. As for a special agreement on its status, the UK has been calling on Russia to make it ever since 2001. Russia has not consented to this day. That is why the Council is now under British ambassadorial patronage, and so enjoys diplomatic immunity, explained Mr. Cummings.

The British Council currently has fifteen offices in all parts of Russia.

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