"Chinese activist arrested for tax evasion" by Kathrin Hille, The Financial Times

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August 18, 2009

Xu Zhiyong, a Chinese legal scholar and aid campaigner, has been formally arrested on tax evasion charges, in the latest step in Beijing’s crackdown on legal activists.

Beijing University of Posts and Telecommunications, where Mr Xu teaches law, was notified of his official arrest, said Zhou Ze, Mr Xu’s lawyer. “This letter was received,” said a colleague of Mr Xu’s who asked not to be identified.

Under China’s opaque legal system, it is unclear whether Mr Xu will be prosecuted. But his formal arrest makes it more likely that he will go to trial. As a leading proponent of legal reform in China, his case could serve as a test for how committed Beijing is to continue developing the rule of law.

Mr Xu was taken away from his home at dawn on July 29 shortly after the government closed down the Open Constitution Initiative, a non-governmental group co-founded and run by him which provides legal assistance in public interest cases.

The centre was closed after the authorities fined the group Rmb1.4m, saying it had failed to pay its taxes. Mr Xu’s detention came a day before he was due for a hearing on that case.

Mr Xu became widely known in 2003 when he campaigned against China’s extralegal detention of people staying in a city they lack a residential permit for. Mr Xu called upon the National People’s Congress, China’s parliament, to check whether the system was constitutional after Sun Zhigang, a university graduate, died following a beating while in police custody. Later that year, that form of detention was abolished.

Since then, Mr Xu has taken on numerous public interest cases. Most recently, his centre’s lawyers represented parents of children who died or fell ill after consuming melamine-tainted milk powder.

If found guilty of tax evasion, Mr Xu could face a sentence of up to seven years. Lawyers working with the centre said the tax evasion charges were part of Beijing’s broader attempt to harass activist lawyers and legal aid groups.

Open Constitution was set up as a company because aid groups that try to register as nonprofits often face insurmountable administrative hurdles in China. However, the alternative exposes them to government demands to declare tax as a for-profit business.

Earlier this month, centre organizers called for public donations and tried to settle the fine. However, they said this proved difficult because tax authorities refused to issue necessary paperwork and the bank accounts of the centre and Mr Xu were frozen.

Mr Zhou said he was allowed to visit Mr Xu late last week in a Beijing detention facility where Mr Xu remained as of Tuesday.