Have 'Magnitsky List' Sanctions Worked Against Russia?

Have 'Magnitsky List' Sanctions Worked Against Russia?
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This week in her speech at the European Parliament, Nadezhda Tolokonnikova (representing prisoners' rights group Zona Prava and formerly of Pussy Riot art collective) endorsed the Magnitsky List and supported sanctions against top-tier Russian policymakers as a way to "stand up" to President Putin's ambitious realpolitik of 2014.

Earlier in March, the well-known opposition blogger and former Moscow mayoral candidate Alexey Navalny made similar pleas in a New York Times piece forcefully titled, "How to Punish Putin." Mr. Navalny called for specific sanctions against Mr. Putin's inner circle to show the "serious costs" of the Russian President's actions and urged Western authorities to "investigate ill-gotten gains from Russia within their jurisdictions."

West's policymakers are seemingly listening: on April 1, U.S. Congress approved $1 billion in loan guarantees tied to new economic sanctions against Russia. European politicians will likely follow suit with similar measures.

Of course all this is shrugged off by the Russian officials targeted by U.S. or European sanctions. They say they're proud to be sanctioned and they have neither financial interests nor desire to vacation in the West.

Before the Crimea standoff, Russia was -- and still is -- subject to the so-called "Magnitsky List" sanctions adopted by the United States and heavily lobbied for in Europe -- that's the list Nadezhda Tolokonnikova promoted in Brussels.

Let's look how those sanctions turned out in the U.S.

The purpose of the Magnitsky Act was to punish Russian officials who were thought to be responsible for the death of Sergei Magnitsky and others guilty of "gross human rights violations" in Russia. The Act prohibits their entrance to and use of banking system in the United States.

The U.S. Magnitsky Act was an experiment by U.S. Congress. During the good ol' days of the U.S.-Russian reset-that-never-was, the Magnitsky Act had alienated Washington from Moscow at a time when their cooperation on Iran, Afghanistan, Syria, and other global matters was crucial.

Since September 2013, the New York district prosecutor has frozen more than $20 million of Manhattan property assets and bank accounts allegedly used to launder money for individuals linked to the alleged fraud operation that ultimately resulted in Mr. Magnitsky's dying in jail. The New York District Court did not use the Magnitsky Act to do so: the freeze order cites 18 U.S.C. § 981 (a) (1) (A) 985 (civil forfeiture) and U.S.C. § 1956 and § 1957 (money laundering, from the 1986 Act), making no references to the U.S. Magnitsky Act, rendering the latter a redundant tool in U.S.' pursuit of those accountable for the death of Sergei Magnitsky.

Meanwhile, the Russians viewed the U.S. Magnitsky Act as a purely political gesture. The Kremlin's response was similarly political yet disproportionate. Russia's own pre-Crimea list of Americans banned from entry also stood at 18 names, including Manhattan U.S. Attorney Preet Bharara for prosecuting international arms dealer Viktor Bout, who is currently serving a 25-year sentence in the United States Penitentiary in Marion, Illinois. In a twist of fate, Mr. Bharara is leading the Manhattan asset freeze case.

In addition to adopting an "anti-Magnitsky" list, the Russian Duma retaliated by banning child adoptions to U.S. citizens. According to State Department data, Americans adopted 45,861 orphans from Russia 1999-2012. No child has been adopted from Russia after the Russian ban was implemented in December 2012.

The inability of thousands of American families to adopt orphans from Russia remains the only measurable effect of the U.S. Magnitsky Act. Visa bans for officials had no impact on the Russian elites, and neither visa bans nor asset freeze cases require Magnitsky-type legislation because the U.S. already had all the necessary tools to pursue cases in American courts.

Although President Obama signed the Magnitsky Act, the White House had initially objected to the legislation, calling the proposed bill "ambiguous," "redundant," "quasijudicial," "burdensome," and citing concerns over its "foreign policy implications" and "due process."

Ultimately, the quasijudicial nature of the Magnitsky Act's approach and a simple cost-benefit analysis of the sanctions resulted in President Obama's decision not to extend the list of Russian officials targeted by the sanctions in December. It was the right thing to do at the time, before Ukraine exploded internally and Russia went on a binge. Instead of enhancing U.S. diplomacy, the targeted sanctions against Russia under the Magnitsky Act delayed cooperation, stalled negotiations, shifted priorities from urgent issues, and had direct negative consequences for American citizens and Russian orphans. No other set of economic sanctions in recent history has done so much damage to U.S. national interests. U.S. policymakers must address these critical questions before expanding the sanctions globally.

On January 15, Senators Cardin (D-Md.) and McCain (R-Ariz.) introduced the Global Human Rights Accountability Act, S. 1933, seeking to expand globally the sanctions outlined in the Sergei Magnitsky Rule of Law Accountability Act of 2012.

If the Act goes global, the U.S. must be prepared to see a similarly strong response from its allies and foes. Should the U.S. hope to find justice through sanctions for some yet-identified group of Chinese or Israeli or British human rights violators who have never been convicted by national or international courts? How would the global act affect visa-free travel between U.S. and allies? Are the American people prepared to finance the additional work of the Departments of State and Treasure required to place the alleged violators on a "global" list? Can a substantial part of bilateral relations with every nation focus on the back-and-forth over Magnitsky-type sanctions?

The Kremlin's response has demonstrated these foreign policy choices and implications of passing Magnitsky-type sanctions against any given country. After Crimea, the White House has shown it doesn't need an act of Congress to implement its own targeted sanctions against individuals involved in some type of activities that hurt U.S. interests. The game appears to be endless.

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