By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends most of her time in Asia researching a book about textile artisans. She also writes regularly about legal, political economy, and regulatory topics for various consulting clients and publications, as well as writes occasional travel pieces for The National.
Embedded in the 3,000-page National Defense Authorization Act, passed by both houses of Congress by veto-proof majorities earlier this month and sent to the President on December 14, the Global Magnitsky Human Rights Accountability Act provides new authority for the executive branch to impose visa bans or revocations, or sanctions (including property seizures) on individuals accused of committing human rights violations or engaging in gross corruption.
As Sarah A. Altshuller has written on law firm Foley Hoag’s Corporate Social Responsibility and the Law blogThe Act may be part of a paradigm shift in the way U.S. sanctions law is utilized. Unlike most U.S. sanctions regimes that target issues in specific countries by sanctioning entire governments or groups of individuals and entities, the Act would apply sanction to individuals anywhere in the world who have engaged in activities deemed to violate certain international human rights standards. The Act could offer an expanded scope to the Treasury Department’s Office of Foreign Assets Control (“OFAC”) in promoting U.S. policies globally, much as the 2015 sanctions on malicious cybersecurity undertakings expanded the group of activities, including drug trafficking and terrorism, that are global targets of OFAC sanctions. Under the terms of the Act, the State Department’s Bureau of Democracy, Human Rights, and Labor (“DRL”) would be given authority to determine who is placed on the sanctions list, which will presumably be implemented by OFAC. In making these determinations, the Administration is required to consider “credible information obtained by other countries and nongovernmental organizations that monitor violations of human rights” as well as information provided by certain committees of Congress.”>Corporate Social Responsibility and the Law blog:
The Act may be part of a paradigm shift in the way U.S. sanctions law is utilized. Unlike most U.S. sanctions regimes that target issues in specific countries by sanctioning entire governments or groups of individuals and entities, the Act would apply sanction to individuals anywhere in the world who have engaged in activities deemed to violate certain international human rights standards. The Act could offer an expanded scope to the Treasury Department’s Office of Foreign Assets Control (“OFAC”) in promoting U.S. policies globally, much as the 2015 sanctions on malicious cybersecurity undertakings expanded the group of activities, including drug trafficking and terrorism, that are global targets of OFAC sanctions.
Under the terms of the Act, the State Department’s Bureau of Democracy, Human Rights, and Labor (“DRL”) would be given authority to determine who is placed on the sanctions list, which will presumably be implemented by OFAC. In making these determinations, the Administration is required to consider “credible information obtained by other countries and nongovernmental organizations that monitor violations of human rights” as well as information provided by certain committees of Congress.
The measure has been lauded by Alexandra Schmitt, advocacy coordinator for Human Rights Watch:
The Global Magnitsky Human Rights Accountability Act fills an important gap in the US sanctions toolkit by preserving the flexibility to target individual human rights abusers without punishing entire countries. This new tool will allow the US to more easily go after known abusers in a smart, targeted way without interrupting larger bilateral engagement.
The law borrows its name from the Sergei Magnitsky Rule of Law Accountability Act, passed in 2012, in honor of the late Russian human rights lawyer who was tortured and found dead in his jail cell in Moscow. Magnitsky was targeted for his role in exposing huge levels of corruption and the largest tax fraud scheme in Russian history. A version of this bill was introduced early last year by Senator Ben Cardin, a long-time advocate of human rights and anti-corruption efforts. The bill quickly garnered bi-partisan support, with five Republicans – Senators McCain, Rubio, Wicker, Kirk, and Cruz – and five Democrats – Senators Shaheen, Durbin, Markey, Blumenthal, and Coons – signing on as co-sponsors. A House version followed and a coalition of human rights groups, including Human Rights Watch, have been active supporters ever since.
The original Magnitsky Act applied solely to Russia and was heavily opposed by Secretary of State Hillary Clinton and the Obama Administration, as it was thought this legislation might thwart the then-intended reset of relations with Russia. It provoked a vociferous response from Russian President Vladimir Putin, who continues to oppose the measure and its expansion.
Implementation Paramount: What Will Trump Do?
President-elect Donald Trump’s choice of Rex Tillerson, CEO of ExxonMobil, who has had wide experience in Russia, combined with Trump’s own comments suggests an intention of pursuing a more cooperative, less adversarial relationship with Russia during his administration. That suggests little tendency to apply Magnitsky provisions to Russian officials, a conclusion Altschuller also reaches here.
How widely or narrowly the provisions will be interpreted is a matter for the executive branch to determine. And it is ultimately within the President’s discretion to decide whether or not to impose sanctions. The ultimate impact of this statute will depend on how aggressively the incoming administration casts its implementation net. Schmitt suggests– bit overoptimistically, in my opinion– that this could be a bipartisan priority:
The strong endorsement by senators on both sides of the aisle sends a vital message to the incoming administration that accountability for human rights abuses is a bipartisan priority and may provide an opportunity for future collaboration if president-elect Donald Trump is willing to make good on what could be a rare opportunity.
But this does not mean that the Trump administration would be blind to possibilities the measure opens up. In particular, the administration might choose to target human rights violations not necessarily out of concern for these issues per se, but as a means to pursue a wider foreign policy agenda. Again to quote Schmitt:
One place to start could be China. Trump has written in his book in 2000 that he is “unwilling to shrug off the mistreatment of China’s citizens by their own government” and that Chinese leaders are keen to overlook “the human rights situation.” A new Human Rights Watch report documents a raft of abuses by Chinese Communist Party authorities who oversee a secretive detention system, including torture and deaths, in the name of combating corruption. Trump could demonstrate his willingness to address this concern by directing his secretary of state to examine possible senior Chinese officials who could be sanctioned under the Magnitsky law.
Foreign Corrupt Practices Act and Other Anti-Bribery Provisions
It would be to easy to suggest that this new statutory tool will have a profound impact, as its effectiveness depends so crucially on implementation. In this respect, the history of the Foreign Corrupt Practices Act (FCPA) serves as a cautionary tale. The US took the lead in promoting statutory anti-corruption measures in the 1974 FCPA. And the current Department of Justice (DoJ) has targeted bribery and foreign corruption as enforcement priorities. Yet as I have previously written here, the focus of the Department of Justice on FCPA violations, when coupled with the lack of an aggressive enforcement policy, has led to some perverse effects. Allow me to quote from that previous post:
“We have to act sometimes as shoe salesmen, flogging competence in FCPA violations, that occur in subsidiaries or with foreign suppliers,” says my white collar defense specialist contact. “This work leads us to countries and legal systems we don’t know well, to uncover chickenshit violations that occur far from home.” Far better, he believes, would be for the DoJ to focus on law-breaking that occurs in the United States, as that could be effectively deterred by the agency refocusing its enforcement priorities.
The United Kingdom has also targeted foreign bribery and passed its own Bribery Act in 2011, which contains some provisions more extensive than the US statue. Interestingly, similar concerns have been raised over that legislation’s impact and effectiveness, tied in part to enforcement concerns (hat tip to Richard Smit for drawing this link to my attention).
UK Magnitsky Amendment
The UK is currently considering its own Magnitsky Amendment, a measure added to the Criminal Finance bill that targets terrorist finance, money laundering, and tax issues, as reported by the Financial Times:
It would enable the government and private parties to apply to the High Court to freeze UK assets belonging to those involved in or profiting from gross human rights abuses in any country.
That includes people who have targeted whistleblowers, journalists or human rights activists with retaliatory action after they uncovered corruption.
“People with blood on their hands for the worst human rights abuses should not be able to funnel their dirty money into the UK,” said Dominic Raab, the Conservative MP who tabled the amendment. He added that the proposal would prevent Britain from being a “safe place for despots and dictators” to hide their money.
If passed, the amendment could help London counter its reputation as a safe haven for kleptocrats’ and corrupt officials’ wealth. It comes months after moves to create a register of the real owners of British properties.
The Guardian echoed the FT’s analysis in its own optimistic assessment:
The initiative enjoys unusually wide cross-party support. Labour’s Chris Bryant said the chances of it becoming law were “quite positive”.
The bill, which could come into force as early as spring 2017, is designed to clean up London’s reputation as a haven for “dirty money”. Its existing provisions target corrupt politicians and international criminals who launder money through the capital’s banks and plough stolen cash into high-end real estate.
The National Crime Agency estimates that up to £100bn of dubious money passes through the UK a year. …
Both the United States and the United Kingdom are at separate stages of considering new forms of Magnitsky measures that would improve each state’s respective ability to punish individuals who have committed human rights violations or engaged in gross corruption. In the UK case, the scope of this authority will depend on what, if any measure, Parliament ultimately passes.
As with existing anti-corruption and anti bribery frameworks– e.g., the US FCPA and the UK Bribery Act– the ultimate effectiveness and deterrent effect of new statutory authority depends on vigorous implementation and enforcement. In the US, the incoming Trump administration might well opt to use the enhanced authority to pursue its wider foreign policy priorities, as opposed to being primarily motivated by human rights concerns. This implies that the Global Magnitsky Human Rights Accountability Act might be aggressively but inconsistently enforced.
The FCPA link to your article doesn’t work.
Very helpful bit of research on this exercise of transnational law, potentially another facet of the new groundwork for diplomatic relations with Russia. Interesting to see whether/how it plays out.
With all due respect, I read these Acts as taking power away from the Judiciary, and handing it to the Executive Branch. Now they can punish your (foreign) dog for Human Rights violations (it barks at night!), without any burden of proof. No habeas corpus, no appeals, what’s not to like.
We have seen in Syria and elsewhere that HRW is just another name for FakeNews (or CIA, or whatever you deems fit), so no wonder they are on board.
Frightening times ahead.
The rule of law flew out the window quite awhile ago. We might maintain the pretense of it, but in a world where the US can engage in extrajudicial death by drone, and with total impunity, is one that could scarcely be said to be restrained by the rule of law. Holder himself said before a Congressional committee that due process simply means that there is a deliberative process of some kind (i.e. “we decided”) not necessarily a judicial one. As far as the US is concerned, if you’re a foreigner, you have no rights, and if you’re an American citizen, you have the pretense of rights… so long as you’re on US soil and not in an airport or anywhere along the border.
Good observation. But also when are we going to apply the rule of law to American and GB war criminals?
Yes, this is yet another surrender of power to the executive branch. One sees why the founders of the United States were so keen to keep the judiciary separate from the executive. If the executive gets to interpret the law as well as implement it, then they can use it to do almost anything. So increasingly more and more laws say that the president can do X if he/she ‘determines that it is appropriate’ – a blank check. No wonder so many senators and congressmen are eager to leave for cabinet positions, that’s increasingly where the real power lies. I’m still surprised at how eager Congress has been to give up its powers. Maybe reading too many Tom Clancy novels where the president is a near-divine wonder-worker? What’s been driving this dynamic?
Privatization would be my guess. The wealthy and powerful want a police state, the wealthy and powerful want spying, because the wealthy want to control (and acquire a piece of) every transaction…. they just don’t want the govt to do the management tasks. They want it handed over to ngos and ‘security’ corporations. The politicians do this because they never had an interest in governing, they are in it for the pay off of a board/think tank/party position.
Mad Men and Media Consolidation.
We let squillionaires try to suck profit out of news, which means lots of coverage of kids in wells and next to nothing explaining what congress did today and the consequences of the legislation being considered. Leaving a bunch of uninformed people voting on emotions, and not enough informed people to help move the sheep in the right direction. Then the ad people made even non controversial votes look either extremely partisan, or not partisan enough.
In other words Trump might continue to pursue the current policy of exceptional nation global policing. One should point out that the original Magnitsky Act is hardly uncontroversial having resulted from a spat between a wealthy oligarch and the Russian government. From WSWS
Russia responded by sanctioning some US government officials
Doubtless the passage of this new expanded version was intended as yet another tool for Hillary to use in the new cold war against Russia and as part of her Asia pivot. If Trump abuses it the foolish sponsors will have only themselves to blame.
For someone who ‘vociferously opposes’ the act, Putin does not seem to be shy about imitating it.
I agree with the underlying principle, although as others have pointed out the devil is in the details (I think it should be subject to judicial review or appeal). The only complaint I have with the Russian response is that Cheney was not named.
A step in the right direction. Now let’s see if DRL can outgrow their reputation as happy-clappy naïfs. If they can hit the broad side of a barn they can nail Marianne Ny and Mark Fuller.
First Malinowski will have to grow a pair… never mind.
I could see this easily being abused in regard to opposition to Israeli policy.
How so? There’s zero probability that a US Congress/Senate would pass a Bill that would’ve triggered an instant, highly-organized, power-talking, bare-knuckled campaign to kill whatever thing that cannot be named that might bring ‘harm’ to Israel, and on the flip side, any Palestinian caught beating up the ground with a stick is already headed to prison for some serious solitary reflection on his crimes.
Or do you mean it will become unlawful to criticize Israel? It’s certainly heading that way all over the Anglosphere.
Won’t any executive branch just pick and cherry pick who to pinpoint according to who it supports and who it is against. I doubt it will go after its friends in the US. Somehow, the act needs to have independent actors taking the lead, not those who use it for their own benefit.
From the newspaper reports, it seems that the UK version– as it is at the moment– will allow just that. By contrast, the US version provides the executive branch (ultimately the President) with complete discretion.
The US has a mountain of human rights abuses to atone for, but who will sanction this government and its heinous criminals? A good start would be to submit to the jurisdiction of the International Criminal Court in the Hague. That should mean reparations big time and turning swords into plowshares.
Have not read the Act itself, but followed the link to the description at the law firm blog, which offers a few other notable details: It looks like the sanctions largely (if not exclusively) target government officials or those acting on their behalf (which would seem to mean the Act won’t directly reach corporate/commercial corruption/human rights violations); on the other hand, sanctions may target not only visas but property under U.S. jurisdiction (which seems to add more bite and breadth to its potential application).
Also worth noting that to the extent the Act, or its implementation, affects commercial interests (including access to visas) of U.S. trade partners, it very likely could implicate U.S. WTO and other trade obligations. E.g. — “This implies that the Global Magnitsky Human Rights Accountability Act might be aggressively but inconsistently enforced.” ISDS also a possibility if the property interests of an “investor” with Treaty protections are affected.
It sounds like this legislation will offer wonderful new opportunities for U.S. hypocrisy. The criteria for deciding who violates human rights rises to PropOrNot standards.
Agree. As noted above in another comment above this looks as if tailored as a new tool for the martial humanitarians of Clinton vintage to dispense Imperial justice.
Coming to a Koch near you, when?
And how soon will it be applied to the miscreants at home… or is it just a case of abroad…
dishevled…. funnie how that works thingy….
I think congratulations are due.
The US has managed the following:
To trash productive capitalism, to trash democracy, and to trash universal human rights.
It is quite a trifecta. Call it the Final Death of the Enlightenment Project.
witters, the days of bourgeois liberalism were numbered from the start, just like any other perpetual motion machine based upon circular inequalities. Marx called it a century and a half ago. Indeed, it was the US that, through the ruthless elimination of any other potentially viable order of society, kept it alive (such as it is) for as long as it has; if it hadn’t been for the deep-seated American belief in forced labor as a spiritual tonic, the US might have had a Wobbly revolution instead of WWI.
The incoming Confucian bureaucratic socialism doesn’t sound so bad.
I could not have imagined this not being turned to serve darker ends of US policy with Clinton, and have no energy even to muster the attempt with Trump. Get ready for a rogue’s roll of villains from China, Iran, Saudi Arabia, North Korea, Venezuela, half of Central America, Ecuador, Argentina, South Africa, other big chunks of Africa, Turkey, Thailand and others. US, UK, Israel and ‘old’ NATO (unless they need to blame it for some disastrous outcome or other) exempt of course.
I suppose those blanked sanctions started to cost dearly to some friends of the powerful elite, so they decided to reduce the cost. Also, I reckon, ineffectiveness of those sanctions being on public display reveals the limits of US power.
However, as the grip of US on global financial institutions gets weaker, and its primacy on key technologies gets eroded, the impact of those sanctions will inevitably dwindle
In theory it makes sense. I’d like to see corruption targeting of people like the leadership of Brazil that stole billions from their people. In practice, egregious violators who support US foreign policy will probably be overlooked and it will just be used as another tool to manipulate foreign governments that don’t follow our orders.