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On transparency and accountability of EU financial aid to Uzbekistan

UZB-EU 1
Letter of Inquiry
To:  Catherine Ashton,
First-Vice-President of the European Commission,
High Representative for Foreign Affairs and Security Policy
 
CC: Andris Piebalgs,
European Commissioner for Development
           
                                                                            
July 25, 2011
Dear Catherine Ashton,
It was brought to our attention that the European Union cooperates with the National Centre for Social Adaptation of Children (NCSAC) headed by Lola Karimova-Tillaeva, Uzbekistan’s representative to UNESCO, and also the daughter of the country’s president, Islam Karimov.
We would like to highlight the details of this case that holds valuable lessons as you further develop, in tandem, your External Action Service and its engagement with civil society, as well as the financial instruments for external action. Following the Commission's proposals for the 2014 to 2020 EU Budget, including a welcome increase in external spending, this case will no doubt be cited by those resisting such an increase. A clear, proactive response will help mitigate its broader impact on budget questions while ensuring that funds allocated for civil society reach their proper destination in Uzbekistan and elsewhere.     
In 2008 the European Commission allocated a grant to the NCSAC and in 2010 issued new funding to this organization for a Project entitled ‘Improving Inclusion for the Disabled.’ As it became clear from the letter of Europa House accredited in Uzbekistan (enclosed), in 2011 the European Commission once again allocated funding of €3.7 m for the Centre for 2011-2012.
Later on, the European Commission changed the language and described this funding as ‘technical assistance,’ rather than as a grant, and Europa House withdrew information about the funding to NCSAC from its website. This evidently was done in response to two press-releases issued by the Association ‘Human Rights in Central Asia’ on 01.06.2011 and 07.06.2011, which raised questions regarding this EU funding (enclosed).
The EU’s desire to help Uzbekistan’s disabled children is in principle laudable and worthy of support. However, our concerns and queries are caused by other issues involved in financing the Centre, as well as overall EU assistance programs to Uzbekistan. The following issues are of concern:
1. The NCSAC can by no means be considered a civil society institution. De facto and de jure this organization has been established by the government and is accountable to the government. The Centre was established under the Resolution of the Uzbekistan Cabinet of Ministers No. 419, dated 07.09.2004. In accordance with clause 2 of this Resolution the Director of the Centre is appointed by the Cabinet of Ministers of the Republic of Uzbekistan and its activity is accountable to it. This raises the question of the legitimacy of the funding of NCSAC by a program that should be dedicated to supporting civil society organizations.
2. NCSAC is not only a governmental body -- it also holds a total monopoly in its sector. In Uzbekistan, the majority of non-governmental organizations formed by citizens, including those dedicated to helping disabled children, were shut down during  2004-2007during a government crackdown on civil society. According to research by the  Eurasia Foundation over the period of 2004-2007, 313 non-governmental organizations (NGOs) were forcefully closed under threat of criminal investigation including NGOs working with special needs children (14),  with youth (8), women’s organizations (34) and healthcare NGOs (7) (the list of the NGOs shut down by the government is enclosed).
These genuine NGOs closed down by the government, not only have no chance of receiving EU funding, but are barred from working or existing as citizens’ associations. Even had they managed to maintain their legal status, they would still not be able to receive grants or technical assistance, as in 2004, the Uzbekistan authorities put in place laws and mechanisms whereby funding wired to NGO bank accounts requires clearance by state authorities. Permission may be granted only by, and at discretion of, a special commission under the Central Bank of Uzbekistan, which is controlled by the National Security Service (formerly the KGB under the Soviet rule).
3. The charitable activity of the aforementioned Centre and the foundation Sen Yolgiz Emassan, controlled by Lola Karimova-Tillaeva –– are used for her personal promotion. This is evidenced by the fact that information about the Centre is placed on the personal website of Karimova-Tillaeva, http://www.lolakarimova.cz, and not on the organizational website of the Centre, giving the impression that the Centre is financed by Karimova-Tillaeva, which it is not. Whereas on such a website, donors might expect to find details of the activities of the Centre, its governance, structure, funding and annual reports, no such transparency or accountability is evident on the site.
4. There are particular concerns about the misuse of funds from the European Commission and other donors. It emerged from court evidence filed under a libel suit brought by Karimova-Tillaeva against RUE89 (http://www.rue89.com/), that one of the charities controlled by Karimova-Tillaeva spent €230,000 in honoraria to movie stars attending a reception at the Palace de Versailles in February 2010. Evidence of such expenses was presented to the court. We do not know whether this money was spent from the budget of the NCSAC or Sen Yolgiz Emassan Foundation. However, both of these organizations are apparently recipients of major funding from international donors, including UNESCO and UNICEF. Irrespective of which of these organizations allocated funds for the Reception at Palace de Versailles – NCSAC or the Foundation – the very fact of such expenses provides an understanding of Karimova-Tillaeva’s use of funds allocated by international donors. It is most likely that budgets approved by the international donors did not include such expenditures.   
5. We are also concerned that the funds under  the EU’s Institution Building and Partnership Programme (IBPP), whose mission is to support civil society initiatives in post-Soviet countries,  may be used for funding institutions which are an integral part of the repressive and corrupt regime and, as such, are to be considered an enemy of civil society. Unfortunately, the website of the IBPP does not provide sufficient information about which NGOs in Uzbekistan have been funded by this program and which NGOs are supposed to receive these funds in future. The only information available to the public and even to Members of the European Parliament is that IBPP allocated €2.2 m for Uzbekistan twice – in 2008 and 2010. More detail should be provided about  EU funding to Uzbekistan.
In light of the above, we kindly request your help in placing these matters of highest concern before the attention of the European Union and launching an investigation into the transparency, accountability, and legitimacy of spending by charities controlled by Lola Karimova-Tillaeva. Such investigation should address the following questions:
1)      Whether any EU funds have been used by Karimova-Tillayeva towards the reception at Palace de Versailles in February 2010.
2)      Whether the Foundation Sen Yolgiz Emassan has been also beneficiary of EU funding either in the form of a grant or as a recipient of technical assistance. 
3)      To which extent the aforementioned NCSAC and the Foundation Sen Yolgiz Emassan controlled by Karimova-Tillayeva meet the standards of transparency, and provide sufficient information to the public about the sources of their funding, budget, and its implementation.
4)      To what extent the NCSAC and the Foundation Sen Yolgiz Emassan can be considered legitimate and eligible recipients of IBPP or any other EU assistance.
We urge the European Commission to put on hold any financial assistance to these two charities, NCSAC and the Foundation Sen Yolgiz Emassan, until satisfactory answers are received to this inquiry.
We kindly ask the European Commission to provide more detail on how the budget lines of assistance programs to Uzbekistan are being used, who the recipients of these programs are, how they have been selected, and how they implement their projects.
In our view, the European Commission should revisit its programs to support civil society initiatives to make sure it incorporates an adequate understanding of the concept of civil society and operationalizes it in the daily activity of relevant programs such as the IBPP. The IBPP should be more open to stakeholders and periodically invite them for discussions and evaluation of its grant and technical assistance programs.
We would like to stress that none of us, undersigned here, are against the policy of engagement with Uzbekistan. The question is what we understand by the word, ‘engagement’. Does it mean engaging only with governmental elites and their families? Does it imply compromising the principles and values the European Union is built on? Do we apply the same or different standards when we are dealing with other parts of the world? We hope that real engagement and dialogue would not require the European Union to accommodate Orwellian standards of truth when dealing with regimes like the one in Uzbekistan. Events in North Africa have shown that such short-sightedness serves the European Union little in the longer term. EU tax payers’ money should help people of Uzbekistan make progress on the path of democracy as well as it should help the European Union to be on the right side of history.
We look forward to receiving an expedite response and clarification on what the European External Action Service is doing together with relevant Commission services towards addressing the aforementioned issues. 
The collection of signatures under this letter of inquiry is going on.
Respectfully,
Lena Kolarska-Bobinska, Member of European Parliament, Group of the European People's Party (Poland)
Sonia Alfano, Member of European Parliament, Group of the Alliance of Liberals and Democrats for Europe (Italy)
Nicole Kiil-Nielsen, Member of European Parliament, Group of the Greens/European Free Alliance (France)
Michael Laubsch, Executive Director, Eurasian Transition Group, E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Nadejda Atayeva, President, Association Human Rights in Central Asia (France), E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Lyudmyla Kozlovska, Vice-President, “Open Dialog” Foundation (Poland), This email address is being protected from spambots. You need JavaScript enabled to view it.                                                       
FREEDOM LEGALITY AND RIGHTS IN EUROPE  Roberto Forte, Executive Director, FLARE Network (Italy), This email address is being protected from spambots. You need JavaScript enabled to view it. 
Alina Mungiu-Pippidi, Professor of Democracy Studies, National School of Administration and Political Science of Bucharest; the initiator and academic director of the Civil Society Against Corruption project. 
  
Annex
Selected list of Uzbek NGOs liquidated during 2004-2007:
Children and disabled NGOs:
Andizhan club of invalids’ parents “KRIDI”
Bukhara regional for supporting children of invalids “Orzu”
Centre of women and children - invalids (Dzhizak)
Children's Centre “Semourg “, Kokand 
Tashkent Centre of women and children “Sabot” (Tashkent region)
Fund of children-invalids (Karakalpakstan)
Rehabilitation Centre of children-invalids (Karakalpakstan)
Fund of assistance to children- invalids (Samarkand region)
Centre of support of women and children-invalids (Syr-Darya region)
Association of sportsmen-invalids (Tashkent region)
NGO “Aridi” (Karakalpakstan)
NGO “KRIDI” (Karakalpakstan)
Centre “Nekuz “ (Kashkadarya)
Invalids Rehabilitation Centre “Umid” (Samarkand region)
Youth NGOs:
Youth Centre “Iqbol” (Tashkent region) 
Youth Centre “Maksad” (Khorezm region)
Centre “Yoshlar kanoti” (Surkhandarya region)
Centre “Barkamol avlod” (Surkhandarya region)
Centre of youth initiatives “Jaslar” (Karakalpakstan)
Youth Centre “Oltyn Kabutlar” (Samarkand region)
College of youth problems (Surkhandarya region)
Crisis Centre “Source” (Samarkand region)
Women NGO:
Consulting Centre of women-lawyers “Family and Law” (Samarkand region)
Centre of confidence “??? ?? ?????” (Andizhan region)
Centre of support of women “????????” (Andizhan region)
Cntre of business women and craftswomen “El-Ayol “ (Andizhan region)
Women Resource Centre (Bukhara region)
NGO “School of housewives” (Karakalpakstan)
NGO “Women and Aral children” (Karakalpakstan)
NGO “Woman and health” (Karakalpakstan)
Women Resource Centre (Kashkadarya region)
NGO “Women In progress” (Kashkadarinskai region)
Centre of support of women “Azizs” (Khorezm region)
Women Centre “Yangi Khayot” (Khorezm region)
Women Centre “Ikhlos” (Khorezm region)
Women Centre “Marjon” (Khorezm region)
Women society “Orom” (Khorezm region)
Women Centre “Mansura” (Khorezm region)
Civic Centre of Women Initiatives (Khorezm region)
Women Centre “Najot” (Khorezm region)
Women Centre “Umida “ (Namangan region)
Women Centre “Sharq Guzali” (Namangan region)
Union of women-leaders “??????” (Navoi)
Women Centre “Zebuniso” (Navoi)
Women Centre “Umida” (Navoi)
Women Centre “???????” (Navoi)
Centre of social adaptation of women Navoi region
Centre “Oila “ (Navoi)
Centre of women-leaders “Sardor” (Navoi)
Samarkand region Union of Women NGOs(Samarkand region)
Centre for Protection of  rights and interests of women (Samarkand region)
Tashkent Centre of women-leaders (Tashkent region) 
Centre “Gender - Innovations and progress” (Tashkent region)
Women Centre “Mekhri” (Tashkent region)
NGO “Mehnatkash Ayol” (Tashkent region)
Club of Women-Invalids “Intilish” (Tashkent region)
Medical NGOs
Association of young physicians (Bukhara region)
Centre “Avicena” (Fergana region)
Association of doctors-volunteers “Revival” (Navoi)
Association of medical students (Samarkand region)
“Lainus Poling”  Centre of  medical information (Samarkand Region)
Centre for psychological and legal assistance “ Mehr Yogdusi” (Tashkent region)
Centre for social adaptation and reproductive health (Tashkent region)