Anti-Corruption

Sanctions

Global Magnitsky Sanctions: The Swiss Army Knife

The Global Magnitsky Sanctions apply worldwide, without any requirement of a jurisdictional nexus with the United States. They define corruption broadly enough to capture a wide range of conduct and persons. The sanctions target “serious human rights abuse,” but do not define the term. Moreover, the sanctions are readily deployable. No tailored legislation, executive order, or other administrative process—other than a sanctions determination by the Secretary of Treasury in consultation with the Secretary of State—is required to impose sanctions anywhere, anytime. Given their global reach, substantive breadth, and wide applicability, the Global Magnitsky Sanctions have distinct utility value as they can be readily employed for multiple legal, policy and strategic objectives. They are the Swiss Army Knife of sanctions. To date, 78 individuals and entities have been sanctioned for corruption and human rights abuses. The most recent of these sanctions actions, against Turkey, has triggered speculation as to its motives and objectives. This is discussed below, as are some of the provisions that suggest the Global Magnitsky Sanctions were formulated for sweeping applicability and enforcement latitude.

Sanctions

United States Sanctions High-Ranking Turkish Officials Under Global Magnitsky

Today the United States took the extraordinary step of imposing sanctions on Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu. The sanctions were imposed under the Global Magnitsky Sanctions program, promulgated by Executive Order 13818 pursuant to the Global Magnitsky Act of 2016 and the International Emergency Economic Powers Act, among other legal authorities.

Anti-Corruption

Russia Summit Could Spur Congressional Activism on Sanctions, Trade

The meeting in Helsinki between the U.S. and Russian presidents has (as presumably everyone knows) sparked strong reactions in the United States, particularly in response to the U.S. President’s performance. Beyond the politics of the moment and its aftermath, the Helsinki meeting could have legal consequences, should Congress move to insert itself, beyond its standard law-making and oversight role, in sanctions and trade matters. And not just with respect to Russia. There are a number of ways that Congress can play a greater role in sanctions and trade. Such Congressional involvement, if it materializes, would likely be designed to constrain the President, such as by restricting his ability to lift, not impose or modify sanctions through Executive action.

Anti-Corruption

Canary in the Cobalt Mine: Glencore Corruption Probe May Not Be a One Off

The U.S. arm of Glencore, the global commodities trading and mining giant, has been served a subpoena by the U.S. Department of Justice, according to news accounts. The DOJ’s subpoena reportedly seeks documents and information pertaining Glencore’s business in the Democratic Republic of Congo (DRC), Nigeria and Venezuela to assess potential violations of U.S. anti-money laundering laws and the Foreign Corrupt Practices Act (FCPA), the principal U.S. law essentially prohibiting the bribery of foreign officials for business gain by U.S. companies and others subject to United States’ jurisdiction (broadly construed and applied).The Glencore subpoena may not be a one-off and it should be viewed– at least for risk assessment and compliance improvement purposes– as potentially part of a larger U.S. strategy to proactively target corruption and, by extension, money laundering, in Africa and Africa’s extractives industries. (The wider context is that the Trump Administration views U.S. anti-corruption, anti-money laundering and sanctions laws and their enforcement as “tools of economic diplomacy”, including to advance trade and other policy objectives).

Anti-Corruption

Global Magnitsky Regulations: U.S. Multinationals and Dual Citizens Have Heightened Sanctions Exposure

U.S. multinational companies/entities as well as dual citizens/nationals should understand their heightened sanctions exposure under the Global Magnitsky Act, EO 13,818 and the GloMag Regulations. Multinational companies/entities would be well-advised to update their risk-based compliance programs and educate their relevant personnel to make compliance more likely, including by avoiding inadvertent violations of the Global Magnitsky Act, EO 13,818 and the GloMag Regs.

Anti-Corruption

The Value of Integrating News Awareness into Corporate Compliance and Risk Management

The case of Michael Cohen, “personal lawyer” to the U.S. President, continues to yield rich legal, compliance and risk management lessons for a growing group that includes U.S. and foreign companies, banks, lobbyists, government officials, and lawyers. Recent developments in the Cohen matter highlight how news awareness can enhance compliance and risk management for companies and others. Unlike AT&T and Novartis, most companies will not find themselves entangled in headline news of national importance, but enough of them are likely to get caught flat-footed by news about them or their business partners and peers (such as in the same industry, where news of one company’s bad behavior can lead law enforcement authorities to scrutinize peer companies in industry sweeps).

Global Magnitsky Sanctions

Trump Administration Supercharged Global Magnitsky Corruption and Human Rights Sanctions

Beyond the parameters of the Global Magnitsky Act, EO 13818 markedly enlarges the range of sanctionable conduct and persons. The differences between the language of EO 13818 and the Global Magnitsky Act are substantive and significant. In several instances, EO 13818 expands sanctions by omitting the Act’s qualifying language, adding new bases for sanctions, and/or leaving key terms undefined. Key instances of EO 13818’s broad and/or uncertain language are discussed below.

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