The Magnitsky Act: Fueling Tension with Russia

On June 29^th, the Senate Foreign Relations Committee unanimously passed the Sergei Magnitsky Rule of Law Accountability Act. The bill had already passed the House. The Act, which was introduced by Sen. Ben Cardin and Rep. James McGovern, will impose visa bans and asset freezes on Russian human rights offenders. Sergei Ryabkov, the Russian Deputy Foreign Minister, threatened to ban U.S. officials from visiting Russia if the act became law.

The bill is named for Sergei Magnitsky, who died in a Moscow prison in 2009. Magnitsky was a middle-aged attorney and accountant who worked for the largest Western private equity fund in Russia, representing the foreign investor Bill Browder. Browder had invested in Russian stocks since the late 1990s, “the era of the great thefts of state assets masquerading as privatizations.” But by 2005, Browder had learned of widespread corruption, denounced it, and become an activist against it. Browder was soon exiled from Russia, so he sold his holdings to get himself to the West and made a $230-million tax payment to the Russian treasury. Magnitsky discovered that Russian tax officials had subsequently conspired to embezzle the payment. When he made these allegations publicly, Magnitsky was imprisoned and beaten. His death was widely condemned.

The Magnitsky Act will deny entry to the 60 or so officials that Bowder says were responsible for Magnitsky’s persecution. The bill aims to reduce such corruption and its spread across international borders.

U.S. Secretary of State Hillary Clinton is meanwhile working to improve U.S. trade relations with Russia, promoting the repeal of the outdated 1974 Jackson-Vanik Amendment, a Cold War-era provision restricting trade relations with Soviet states deemed to have violated human rights. But on June 29^th, Clinton met in St. Petersburg with Russian Foreign Minister Sergei Lavrov, who warned Clinton that passing the Magnitsky Act would result in damage to U.S.-Russian relations. President Obama had a similarly chilly meeting with President Vladimir Putin at the G-20 summit in Mexico.

For its part, the Obama administration has lobbied against the bill because it already tracks and denies visas to the Russians involved in Magnitsky’s death. The administration also pressured the Senate to include a provision for a secret annex in its version of the bill, which would render the bill useless because the names of human rights violators would not be made public. The New Yorker adds that the United States needs Russia’s support for progress on Syria’s civil war, Iran’s nuclear program, and U.S. supply lines to Afghanistan.

But widespread approval in Washington may make the administration’s attempts to bury the bill futile. Major proponents include Senators John McCain, Joe Lieberman, Roger Wicker, John Thune, and John Kerry, alongside Freedom House President David Kramer. If the bill does not become law soon, proponents say the United States will be unable to employ it for Russia’s upcoming WTO accession.

Steven Pifer, a senior fellow at the Brookings Institution, argues that the Magnitsky bill should not be linked to the Jackson-Vanik Amendment because the Russians “will not see the Magnitsky bill as an expression of outrage over how the Russian legal system was shabbily and corruptly manipulated to kill one of its fellow citizens. They will instead see the bill as reflecting what they believe to be a deep-seated anti-Russia sentiment on the Hill.” On the other hand, Lilia Shevtsova, a senior associate of the Carnegie Endowment for International Peace in Moscow, writes that “Putin’s Kremlin has used the West – eager for engagement and a policy ‘reset’ with Russia – to legitimize its authoritarian rule and to provide opportunities for its venal cronies’ integration into Western society.” She says this has discredited liberal democracy in Russia.

Pifer and Shevtsova are both correct. One the one hand, the bill would enable the United States to uphold its commitments to international human rights and the spread of democracy. On the other hand, as Pifer says, the United States cannot afford to lose Russia as a trading partner. Additionally, the two countries are currently dealing with several issues that could exacerbate one another, including missile defense, the future of Syrian leader Bashar al-Assad, Iran’s alleged nuclear ambitions, and U.S. supply lines to Afghanistan.

The Magnitsky Act will, unfortunately, fuel these already tense situations and throw Obama’s “reset” policies off course. As Putin said in July, “The replacement of the Jackson-Vanik amendment by an anti-Russian law and a course towards creating a missile defense system cannot but upset the existing strategic parity and be a source of concern for us.”