Magnitsky Act

Trump Dossier

The law or “Magnitsky Act” was adopted in six countries. The USA was the first country to approve it in 2012, similar laws were justified in Estonia in 2016, in Canada and Lithuania – in 2017, and also in Latvia – in 2018. The UK adopted the first part of the Magnitsky Act in 2017, concerning the assets freeze of those involved in gross violations of human rights.

Initially, the United States introduced sanctions against a number of Russian security officials who were suspected of involvement in the deaths of the auditor of the consulting company Firestone Duncan, Sergei Magnitsky. In 2008, Magnitsky claimed that he had discovered a large-scale theft scheme from the Russian budget, totaling 5.4 billion rubles. However, instead of investigating the facts presented by them, the auditor himself was faced with allegations of tax and corruption violations. Magnitsky was in Matrosskaya Tishina prison, where he was found dead after spending almost a year in prison. According to Magnitsky’s lawyers, a part of the evidence, indicating the violent nature of his death, later disappeared from official records.

Then, Sergei Magnitsky was tried posthumously in Russia. The Russian Federation authorities explained this practice, similar to the medieval one, by the fact that the second person involved in the case, Magnitsky’s employer and head of the Hermitage Capital investment fund, William Browder, is alive and hides from Russian justice. Browder, meanwhile, considers the accusations against him to be politically motivated and untenable.

HOW MAGNITSKY ACT WORKS

It was Browder who was the main lobbyist for the adoption of penalties in Western countries towards criminal Russian officials. In 2016, the US Congress changed the “Magnitsky law”, making it global for other countries.

The basic mechanism of the law lies in visas denial and entry into countries that have adopted this normative act. The ban may be limited to five years or more. The second penalty measure is the opportunity to freeze any assets of persons under sanctions. The USA, Canada, and Great Britain do not limit the prosecution under this law only to Russian citizens. Representatives of other countries are also included in the “blacklists”.

The American “Magnitsky list” includes 49 Russian citizens. First of all, these are officials who, according to the United States, are involved in embezzlement of funds from the Russian budget, as Magnitsky claimed that he revealed the evidence. The security officials, who are supposed to have brought Magnitsky to death, are documented, too.

The list contains famous names, that are not connected with the Magnitsky case. For example, the chairman of the Investigative Committee of the Russian Federation Alexander Bastrykin, the persons involved in the poisoning of the former employee of Alexander Litvinenko, Dmitry Kovtun and Andrey Lugovoy, the son of the Prosecutor General of Russia Artyom Chaika, as well as the head of Chechnya Ramzan Kadyrov.

MAGNITSKY ACT IN OTHER COUNTRIES

The Canadian “Magnitsky list” includes 30 Russians, as well as citizens of other countries, such as Venezuela and Sudan. The list is similar to the American one – it outlines the same circle of defendants suspected of involvement in the death of Magnitsky.

The Baltic countries included only Russians in their lists. Estonia adopted the law in 2016, including 49 Russian officials on the blacklist. It almost looks like an American one. Lithuania published a similar list in January 2018: both lists, except the defendants in the Magnitsky case, consist of the name of the Chechen leader and head of the Russian Investigative Committee. In March, the Lithuanian authorities expanded their “blacklist”, names in which have not been disclosed yet. In February 2018, Latvia was the last of the Baltic countries to adopt a similar law.

According to the authorities of several European countries and the United States, the participation of the Baltic countries is explained by the fact that its banks, primarily Latvian, contributed to laundering money stolen from the Russian budget.

The main difference of the British Magnitsky Act is who and why the sanctions will be spread on. Similar laws have already enacted, including persons on the blacklists: their alleged violation of human rights or involvement in corruption.

Regarding corruption, London has or develops a number of other tools, such as the ability to demand explanations about the origin of their assets from suspicious citizens.

The bill, which the Magnitsky Amendment is added to, will also require the names of offshore companies’ owners registered in British Overseas Territories, such as the Cayman Islands and the British Virgin Islands, to be disclosed.

However, there is no single “Magnitsky list” at the EU level and no corresponding regulatory act, introducing sanctions. So far, only the European Parliament adopted a resolution and made a list of 32 persons back in 2014.

Great Britain was the first major EU country far from North America to adopt such a law. Experts believe that a “precedent has been made” that could accelerate the emergence of similar laws in other EU countries, including Sweden, the Netherlands, Denmark, and Poland.

SANCTIONED SUBJECTS

Due to the fact that the new law considers human rights violations as the main criterion, experts do not expect large Russian businessmen to be put on the UK blacklist.

The British Royal Joint Institute for Defense Studies notes in its analysis of the new bill, difficulties in applying the law may provoke on condition that persons under sanction challenge them in court.

If the refusal to issue a visa or entry permit does not require the authorities to explain the reasons, financial sanctions, for example, freezing of assets, will entail the need to show the court sufficient evidence to impose penalties on the person involved in the sanction to challenge them in court. However, experts agree that this would not affect the effectiveness of the sanctions themselves.

Natalia Veselnitskaya
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