Tax lawyer Sergei Magnitsky, died November 19th 2009
This interview has been edited for brevity and clarity
With some notable exceptions, international law is largely concerned with State obligations and not the individual. A trailblazing aspect of the GMA is that this is a sanction regime that targets individuals who have perpetrated humans rights violations/abuses and/or grand corruption, as opposed to States. Are there advantages of this type of legislation vis-à-vis more traditional sanction regimes?
There’s been a bit of an evolution in the process – the original Magnitsky act applied just to Russia and just to Russian Human Rights abusers. It had a dramatic effect on the Putin regime, in fact Putin made it his number one foreign policy objective to have it repealed. It was by the tenor of his shrill replies that the lawmakers behind the original Magnitsky act realised its efficacy. The result was a globalised act, so that a Chinese or Venezuelan human rights violator doesn’t get a better deal than a Russian one. During the rewriting of this expanded legislation ‘gross corruption’ or ‘high kleptocracy’ was also added to the definitions of triggers – primarily because it’s all interrelated. I would say that 95% of all human rights abuse is connected to corruption and/or kleptocracy. Sometimes you can only get a violator on human rights abuses, sometimes only on corruption, either way the interconnectedness makes it a very important addition to the legislation and one that is unique to the Magnitsky acts. This was added to the US ‘Global Magnitsky act’ (GMA) in 2016, and is the basis for the Magnitsky acts of Canada, UK and others.
Further, as you say, ‘old-world’ sanctions tended to sanction countries, so if terrible acts were committed on a consistent and shocking basis, then eventually countries like the DPRK or Iran would be subject to sanctions – but it would be the countries themselves, rather than the individuals responsible. This is a blunt instrument that doesn’t really get to the heart of the problem. When you sanction a country you end up sanctioning the victim of the regimes as much as the perpetrators. Oftentimes in effect the perpetrators don’t get sanctioned at all, as they have the financial means to avoid being hit by the same effects that are wracking a national economy, thus they only practically hit those who are already victims. The idea behind the Magnitsky act, then, is that it is a modern-day cancer drug – instead of giving medicine which almost kills the patient to kill the cancer, we now have a tool which goes directly to the cancerous cells. The GMA was created to solve this ‘blunt instrument’ problem.
We’ve seen some success in the deployment of the GMA to sanction human rights violators, even in cases where a government’s executive has been extremely reluctant to react – most recently and notably in the case of Jamal Khashoggi. How do you envision the Magnitsky act being deployed in such cases of infractions of international human rights law?
The Khashoggi case is instructive in several different ways, the first being that this is an example of Saudi Arabia – which was a country that is considered to be one of America’s closest allies – having members of its government sanctioned. This would have been unheard of 10 years ago. That’s a very positive part of the whole thing. There’s also an Israeli on the GMA sanctions list, which again, would have previously been unheard of. What that shows is that it’s possible to precisely target individuals with sanctions, even when they are nationals of a country that is considered an ally. Also instructive, however, was that when push came to shove, the buck stopped before it reached the most important alleged perpetrator, Mohammed Bin Salman (MbS). The story is not over on Saudi Arabia, however, and there’s a lot of appetite in Congress to go after MbS. It’s disappointing that he’s not on the sanction list – but people should recognise that there are 17 Saudis who are on the sanctions list. This is a huge move forward in the realpolitik of sanctions.
In the case of Khashoggi, a legislature was able to circumvent an unwilling executive, but what are the safeguards afforded by Magnitsky acts to avoid their misuse? There’s judicial oversight, but one of the main criticisms of sanction regimes – both UN regimes and country specific – is that they’re often quite opaque, they create lists where the individual concerned may not even necessarily know that they’re on them and it’s very difficult to then get off them.
One of the main features of the Magnitsky act is that it is a public sanctions list – so when someone is sanctioned, they get publicly named and shamed. There is no mystery if you are on the list or not. Then, depending on the country, most if not all countries have some kind of opportunity to appeal your designation. That’s a very important human rights protection that needs to be there and mostly is there – though admittedly has yet to be tested. So far, the number of people sanctioned is relatively low and the bar has been extremely high to get someone on the sanctions list so that, as far as I can tell, no one is one there who doesn’t deserve to be there. That doesn’t mean in the future there won’t be abuses of sanctions and controversial people sanctioned and maybe people sanctioned in politically motivated cases, which will raise fundamental issues – but so far that doesn’t seem to have happened.
We’ve seen the increasing spread of Magnitsky type legislation over the past few years. Having started in the US, the EU, Norway, Japan and Australia are currently looking at adopting their own. In that context, what do you view to be the role of regional and intergovernmental bodies in the implementation and execution of Magnitsky type legislation?
A lot of people have asked me ‘how well harmonized is the implementation of the various Magnitsky acts?’ The answer is that it’s very badly harmonized so far. The reason for that is that the entire Magnitsky campaign emanates from my office of about 10 people and we’re taking our legislative successes where we can get them. This means we’re trying to get as much done as we can now and then later worry about harmonizing and amending laws so that everyone can work together with the same effective tool. I think there is the possibility that the UN could assist in that area. Any process where liberal democracies with free speech and ‘good values’ can share best practices is a good thing, but I’m always worried about the dictatorships, human rights violators and closed societies having any input. Since most of the world’s dictatorships are members of the UN and do many things to try to soften the blow towards other dictators, I do not think it should be co-ordinated as a UN-level Magnitsky act.
On the topic of best practices, in your personal opinion can you identify any current best practices in the deployment of GMAs, or perhaps ways in which it could improve or even complementarities between GMAs and other enforcement frameworks?
In the American GMA we had a simple paragraph put into the legislation which makes it a matter of law for the US to proselytize the benefit of Magnitsky acts to allied countries and cooperate in their implementation.This provision should be standard practice, which which will naturally create coherence.
Also, something interesting happened with the Magnitsky act in the UK. At the same time as the act was under review, another piece of legislation created ‘Unexplained Wealth Orders’. Under these orders, if someone who is suspected of connections to corruption, at home or abroad, all of a sudden shows up and purchases assets in the UK- unless they can explain where the money came from, the asset will be seized by the government. It completely shifts the burden of proof from law enforcement agencies. Instead of having to rely upon the assistance of a likely uncooperative foreign government to prove corruption in its own country, the defendant must prove that their wealth is legitimate. This is a legal template that fits together quite nicely with the Magnitsky act and should be in place in a lot more countries.
You previously mentioned interacting with ‘closed societies’. It has been said that GMAs are not a panacea for human rights issues and corruption and that deploying the GMA, especially at high levels of government can close doors that would otherwise have remained open during bilateral negotiations. What would be your response to that?
That’s nonsense, anybody who is violating international human rights law generally looks for the reward for doing that and calculates that against the risk of doing that. If the reward is great, politically or financially, and there’s no risk then clearly committing the abuse is a much better deal for them than a similar situation in which the reward is great but the risk is also great and possibly catastrophic. I’m not sure what logic there is to saying not having a consequence for a human rights abuse is better than having a consequence.
What role do you see for civil society and NGOs in the GMA?
The main thing civil society should do once these laws are in place, is go to the governments and present dossiers of perpetrators. Governments often don’t have significant resources devoted to finding ‘the villains’ but victims and NGOs often do. Over time a template on how to best present this information to different governments should emerge so that there can be a standard and non-confusing way in which NGOs can communicate with governments and target individual perpetrators.
Finally, moving beyond the perpetrators to the facilitators: it is necessary to convince actors, particularly financial ones that human rights are necessary as a good investment choice. This is creeping into the private sector with the growth of human rights due diligence and social governance, Norway, for example, has guidelines for the investment of its sovereign wealth fund, which are for a large part human rights based. Is this voluntary move enough or should these be imposed on fiscal and private institutions?
Generally when you have mafia type actors, they are not interested in acting in the national interest, they’re acting in their personal interest and therefore they’re not particularly patriotic or taking the courses of action that will benefit their country in the long term. The only thing you can do to change their behaviour is to create personal incentives not to do bad things which the Magnitsky act does. Similarly, investors and corporations are inherently amoral. They’re maximizing profits. To try to plead with an organisation whose mission is to maximize profits to maximize on other things is unrealistic. However, one of the wonderful things about the GMA is that it creates problems for these actors, if they end up doing business with someone who gets sanctioned. Consider the following example: a bank accepts the money of an individual who is subsequently sanctioned. If they then transfer that money, even if it’s via branches/banks outside the jurisdiction of the Magnitsky act, they move it in violation of US sanctions and could be fined 3x the amount of money that they’ve moved – even if they only get paid $150 for facilitating the transfer. At the same time if they don’t move that money, they could be sued by the account holder in another jurisdiction for damages that could be very significant. Thus the Magnitsky act harmonizes well with these concepts by creating a profit-maximizing disincentive for doing business with human rights violators and incentive for conducting proper human rights due diligence.
Featured Image: William Browder, co-founder and chief executive officer of Hermitage Capital LLP, speaks during a Senate Judiciary Committee hearing in Washington, D.C., U.S., on Thursday, July 27, 2017; Andrew Harrer/Bloomberg
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