Advocates Advise How Best to Renew Magnitsky Act

Rep. Jim McGovern, co-chair of the Tom Lantos Human Rights Commission and chairman of the powerful House Rules Committee, hosted a Human Rights Commission hearing March 24 to explore how the Magnitsky Act has worked in the last five years. McGovern noted that Magnitsky Act sanctions have been imposed on 127 individuals and 117 entities in 30 countries, and the recent European and Canadian sanctions against perpetrators of oppression in the Xinjiang province in China used legislation modeled on the Magnitsky Act.

Sen. Ben Cardin, D-Md., and Sen. Roger Wicker, R-Miss., introduced a reauthorization of the Magnitsky Act in late January. McGovern and Rep. Chris Smith, R-N.J., will work on a companion bill. Smith is the other co-chair of the Tom Lantos Human Rights Commission, and also attended the hearing.

Advocates agreed that incorporating elements of a Trump administration executive order on sanctions would strengthen the Magnitsky Act. For instance, the legislation uses a “gross violations of internationally recognized human rights” standard, and the executive order uses the term “serious human rights.” Also, the Magnitsky Act focuses on abuses against whistleblowers and those seeking to obtain rights to a fair trial, or to obtain or defend free democratic elections. The executive order covers those persecuted for their race or religion, and also covers sexual violence.

Beth Van Schaack, a human rights professor at the Center for Human Rights and International Justice at Stanford University, said that the rewrite should cover non-state actors, not just state actors. She endorsed the Senate bill's changes to the original Magnitsky Act. She also praised the executive order, saying it allows the government to sanction enablers, not just perpetrators.

Human Rights First CEO Michael Breen testified that his group has submitted 400 cases for potential sanctions, and more than one-third of the parties who were targeted under the Magnitsky Act were from his coalition.

He suggested that the bill's rewrite should include immediate family members when an individual is targeted, so a wife or adult child cannot access foreign banks as a way around the sanctions. Both he and Van Schaack said it's important to provide more funding to the Treasury Department's Office of Foreign Assets Control, which manages sanctions. Van Schaack said it takes about six to nine months to put together the evidence for Magnitsky sanctions, and with more resources, the agency wouldn't have to be so selective. Tutu Alicante, an exile from Equatorial Guinea because of his anti-corruption activism, decried the fact that so many places have horrific corruption that have not yet had officials designated.

The Sentry general counsel Brad Brooks-Rubin agreed that more resources are helpful, but he noted that some resources should be dedicated to enforcement actions against those who deal with designated targets. Alicante agreed that those who work with corrupt officials on the list should face consequences. “Western enablers are the fulcrum without whom … financial crimes could not be carried out,” he said, and complained that real estate agents and lawyers who worked with an Equatorial Guinean politician to move $110 million in assets out of the country were never punished. “Corruption is never a victimless crime, but its consequences are especially devastating in my country,” he said, where three-quarters of the population subsist on less than $2 a day.

Brooks-Rubin said OFAC should also improve, messaging about those who are being delisted from sanctions. “OFAC has a lot on its plate,” he said, but he said it's essential to give officials an opportunity to demonstrate a change in behavior.

Van Schaack agreed, saying, “It should be clear to individuals … what they need to do to get themselves removed.” She said sanctions are meant to be a lever to change policies, and without a clear way to leave the sanctioned list, that leverage is greatly reduced.

John Hughes, an adjunct senior fellow at the Center for a New American Security, told the members of Congress that the Treasury Department should issue guidance on what they expect the private sector to do to avoid engaging with those who violate human rights in China's Xinjiang region, Myanmar or other countries.

Brooks-Rubin said that in some cases, Magnitsky sanctions are probably not a strong enough lever, and said that in Burma, now known as Myanmar, to change the outcome of the coup, “broader sectoral approaches might be necessary.”