US Congress postpones signing Magnitsky Act
6 August 2012 | By Ruth Green
15 October 2013
13 January 2014
15 October 2013
19 May 2014
13 March 2014
The US Congress has postponed its final vote on the Sergei Magnitsky Rule of Law Accountability Act of 2012.
The law, which has already overcome several major hurdles in the US Congress, was scheduled to go to the floor vote on 3 August before Congress broke for summer recess. However, the house announced at the end of last week that it would delay both voting on the law and on passing the bill to grant Russia Permanent Normal Trade Relations (PNTR) until Congress resumes in September.
The Act is part of a bill to repeal the Jackson-Vanik amendment to the Trade Act of 1974, which the US introduced to prevent the former Soviet Union, and other countries that restricted the emigration of their citizens, from enjoying PNTR with the US. The PNTR bill was approved by the House Ways and Means Committee two weeks ago.
WTO rules stipulate that member states must grant each other unconditional trading rights. As a result, this repeal is highly desired by US companies, which, after 22 August, when Russia finally joins the World Trade Organisation, will trade with Russia at a disadvantage to other WTO members until PNTR is granted.
In spite of the delays, the upcoming votes mark a key turning point as the US government finally bows to pressure by campaigners to name and shame those involved in the Magnitsky ordeal and similar human rights violations in Russia. Magnitsky, a partner at Moscow-based law firm Firestone Duncan, died in a Moscow prison on 16 November after being held without trial for almost a year on charges of tax evasion.
He was initially detained in November 2008 on suspicion of assisting his client, UK-based investment fund Hermitage Capital Management, to allegedly evade around $17.4m (£11m) in taxes. Although the original allegations were lodged against Hermitage, throughout the course of the investigation Magnitsky came upon what he believed to be a cover-up by Russian state officials to embezzle an estimated $230m (£146m) from the Russian treasury.
Following Magnitsky’s death, the erstwhile Russian president Dmitry Medvedev ordered an official investigation to determine the cause and circumstances surrounding his death (25 November 2009).
As a result of the investigation, in December 2009 the head of Moscow’s Federal Penitentiary Service was sacked alongside 20 other high-ranking prison officials (11 December 2009). A week later General Anatoly Mikhalkin, head of tax crimes at the country’s Interior Ministry, was also dismissed by a decree signed by President Dmitry Medvedev (17 December 2009).
Jamison Firestone, the managing partner of Magnitsy’s former firm, was forced to flee Russia at the end of 2009 over fears he was being targeted by the same people he claims are responsible for Magnitsky’s death (1 March 2010). Although he still has partners based in Moscow, Firestone continues to work from London and set up FD Advisory earlier this year to provide advice to UK law firms and businesses on Russian issues and on working in the Russian market (13 June 2011).
Firestone, who spent 18 years living and working in Moscow, is hopeful that the latest legislation will be a turning point for his beloved Russia. “Life in Russia is like a Grisham thriller. What’s happened to Russian law is terrible: when money and politics are not involved, it’s fine, but when they are, you’re absolutely screwed,” he said.
The Magnitsky case is arguably one of the most high-profile and well-documented human rights abuse cases in Russia in recent years and has attracted worldwide attention for exposing inherent weaknesses in the Russian judicial system (30 November 2009).
Bill Browder, the founder of Hermitage Capital Management, has been instrumental in bringing Magnitsky’s plight to the attention of the US Congress.
Browder has already named 60 Russian officials he believes to be involved in the fraud and the subsequent detention, torture and death of Magnitsky and is also encouraging other Western powers to impose asset freezes and issue visa bans on these individuals.
In February this year the Russian authorities announced plans to reopen the case and try Magnitsky posthumously, alongside Browder. A trial date has not yet been set.