Business Ethics & Conduct

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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Trump Administration Targets Chinese Dominance, Corruption in Africa

Notably, in the two pages of the NSS that are devoted to the National Security Strategy in the Africa context, none of Africa’s 54 nations are mentioned, but China is named twice. The NSS notes with concern China’s “expanding . . . economic military presence in Africa, growing from a small investor in the continent two decades ago into Africa’s largest trading partner today.” China’s methods and influence in Africa are described unflatteringly.  “Some Chinese practices,” the NSS states bluntly, “undermine Africa’s long-term development by corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.”
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From Sergei Magnitsky to Global Magnitsky: United States Sanctions Corruption and Human Rights Abuses Globally

The financial penalties imposed by the Global Magnitsky Sanctions (and other U.S. sanctions programs) are powerful, as they effectively cut off sanctioned persons from the U.S. financial system and, substantially, U.S. dollar transactions. Given the size and centrality of the U.S. financial system to international commerce and payments, persons without access to U.S. banks and other constituent parts of the U.S. financial system are largely shut out of the international financial system (this assumes, of course, effective enforcement and compliance by U.S. authorities, banks and international financial system participants). Put in context, the United States’ Global Magnitsky Act and sanctions program are singular in their force. Other countries have adopted versions of a Magnitsky Act (including Canada, which has imposed sanctions under its law), but none of these other Magnitsky frameworks rival the potential sweep and impact of the United States’ Magnitsky framework.
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U.S. Magnitsky Sanctions Are a Powerful Weapon Against Corruption and Human Rights Abuse

EO 13818 directly targets foreign government officials and private parties who commit or enable human rights abuses and certain corrupt acts. The Order also employs extraordinary theories of liability. For example, EO 13818 holds current and former “leaders” of foreign entities (government and private) strictly and vicariously liable—and thus sanctionable—for the corrupt acts, during a leader’s tenure, of their entities. The Order also imputes the sanctioned status of a blocked private or government entity to its current or former “leaders,” if the entity was blocked “as a result of activities related to the leader’s or official’s tenure.” Additionally, EO 13818 treats as a corrupt act the transfer or facilitation of the transfer of corrupt proceeds by current or former foreign government officials and “persons acting for or on their behalf.” These three bases for liability, among others, are unique to EO 13818—they are not provided for by the Global Magnitsky Act.
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Hdeel Abdelhady to Speak on Managing Money Laundering, Trade Sanctions, and Corruption Risks

MassPoint’s Founder and Principal, Hdeel Abdelhady, will speak at a program on managing money laundering, trade sanctions, and corruption risks in business. The program, entitled “Know Your Business Partners: A Must to Managing Money Laundering, Trade Sanctions, and Corruption Risks,” will take place on November 17, 2017 in Washington, D.C. at the American Bar Association Business Law Section’s Fall 2017 Meeting.
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