United States Lobbies G-7 Nations to Adopt Global Magnitsky Sanctions, Now a “Central Tool of U.S. Foreign Policy”
As discussed extensively on this website and at MassPoint PLLC, the United States’ Global Magnitsky Sanctions are a powerful tool in the U.S. legal arsenal. As evident from the President’s Executive Order of December 2017 setting forth the wide-ranging scope of U.S. Global Magnitsky Sanctions, the Trump Administration has magnified the sanctions authorities conferred by the Global Magnitsky Act. A recent Financial Times article, if accurate, illustrates not only the Trump Administration’s appreciation for the Sanctions’ legal force, but also their foreign policy usefulness.
According to the FT, the United States has pressured G-7 member states to adopt their own versions of the Global Magnitsky Sanctions, particularly for the near-term purpose of countering Russia. Canada was an early adopter of the Magnitsky sanctions framework. Earlier this month, United Kingdom recently adopted a Magnitsky sanctions measure (as an amendment to sanctions and anti-money laundering legislation). But Germany and France, for example, have not. Per the FT, “US officials say they want the Europeans to take co-ordinated action against ‘state and non-state actors’ behind cyber-intrusions and to adopt new anti-corruption measures at the national level.”
Significantly, the FT article also reported that “in a May 8 letter to Congress, obtained by the FT, the [U.S.] [S]tate [D]epartment said the Global Magnitsky sanctions program had become ‘a central tool of United States foreign policy.’” If the FT’s account of the letter is correct, the statement is essential to understanding how the Trump Administration (or segments of it) views and intends to deploy the Global Magnitsky Sanctions not only for legal enforcement purposes, but also to achieve foreign policy objectives. (Relatedly, as discussed here, the Trump Administration’s National Security Strategy describes U.S. sanctions, anti-corruption and anti-money laundering laws to as “economic tools” to “deter and coerce” rivals).
As a legal matter, the potential impact of U.S. enforcement of the Global Magnitsky Sanctions should not be underestimated. As stated previously, the Global Magnitsky Sanctions, “are, in scope and substance, extraordinary in an number of ways” that are merit re-stating in full here:
- First, the Global Magnitsky Sanctions require no jurisdictional nexus between the United States and the conduct and persons they target. Thus, the Global Magnitsky Sanctions are an assertion of U.S. universal jurisdiction over covered corrupt acts and human rights abuses.
- Second, the Global Magnitsky Sanctions define corruption broadly, well beyond bribery which is the primary or exclusive target of anti-corruption laws that typically apply to foreign corruption.
- Third, the Global Magnitsky sanctions effectively regulate and directly punish foreign government officials in the area of corruption and, in this respect, depart from other U.S. anti-foreign bribery law (namely the Foreign Corrupt Practices Act) and international frameworks (e.g., OECD and UN anti-corruption frameworks) that defer to national governments and laws to regulate and punish their own officials in connection with bribery and other corrupt conduct.
- Fourth, the Global Magnitsky Sanctions framework– particularly the Global Magnitsky Act– expressly carves out a role in the sanctions designation process for Congress, foreign countries and NGOs, vesting all three of these constituencies with formal and potentially powerful roles in the process of identifying and designating sanctionable conduct and/or persons. This aspect of the Global Magnitsky Sanctions framework is, like others, extraordinary and worth watching closely. (Watch this website and visit www.masspointpllc.com for more on this point).
- Fifth, the Global Magnitsky Sanctions, given their reach and the severity of the penalties they authorize, vest the United States– particularly the U.S. Executive Branch– with extraordinary enforcement powers, and decisions to impose sanctions will undoubtedly entail legal, policy and political considerations, each or a combination of which will likely give rise to controversy.
- Finally, for now, the Global Magnitsky Act and Sanctions (and the legal mechanics underpinning them, such as the assertion of universal jurisdiction) are likely to be further internationalized. Other countries have adopted versions of the Global Magnitsky Act and sanctions (e.g., Canada) and more are considering one or both (e.g., the United Kingdom).
The next G-7 meeting is scheduled to take place in Canada in 10 days. That gathering might shed light on whether U.S. calls for additional G-7 states to adopt Magnitsky sanctions have been successful or are continuing. Even if G-7 members choose not to follow the United States’ lead in the near-term, the larger story here is that the United States now sees the “Global Magnitsky sanctions program . . . [as] ‘a central tool of United States foreign policy.'” The manner in which the United States enforces the Global Magnitsky Sanctions will be relevant to foreign nations, U.S. and foreign multinational companies, state-owned enterprises, policy makers, and anti-corruption and human rights advocates.
- ZTE and U.S. Law as Trade War Weapon, Law360/MassPoint PLLC, May 21, 2018.
- U.S. Lawmakers Raise Possibility of Magnitsky Sanctions on Chinese Officials, Magnitsky Laws and Sanctions Update, April 21, 2018.
- Congress Members Urge Trump Administration to Apply Global Magnitsky Sanctions to Sudan, Magnitsky Laws and Sanctions Update, April 14, 2018.
- Some U.S. Individuals and Entities Have Direct Sanctions Exposure Under Global Magnitsky Sanctions, No. 5, April 10, 2018.
- Departing from Prevailing Legal Standards, United States Directly Sanctions Foreign Government Officials for Corruption, MassPoint Magnitsky Series, No. 4, April 6, 2018.
- How the Trump Administration Supercharged Global Magnitsky Corruption and Human Rights Sanctions, MassPoint Magnitsky Series, No. 3, April 3, 2018.
- From Sergei Magnitsky to Global Magnitsky: United States Asserts Universal Jurisdiction Over Corruption and Human Rights Abuses, MassPoint Magnitsky Series No. 2, March 27, 2018.
- New U.S. Sanctions Are a Powerful Weapon Against Corruption and Human Rights Abuse Worldwide, MassPoint Magnitsky Series No. 1, March 5, 2018.
- United States National Security Strategy in Africa Targets Chinese Dominance, Corruption in Africa, February 2018.
- OFAC Further Tightens Russia Debt Prohibitions Pursuant to the Countering Russian Influence in Europe and Eurasia Act of 2017 (OFAC DIrective 1 As Amended September 29, 2017), October 2017.
- From Anti-Money Laundering to Immigration Enforcement: Time to Reassess the Law Enforcement Role of Banks, Credit Unions and Other Financial Intermediaries, September 2017.
- United States Adds Russian Direct Investment Fund, Other Russian Financial Services Actors to Sectoral Sanctions List, August 2015. Certain Financing, Debt, and Equity Transactions Remain Prohibited; Action Relevant to U.S. Persons and Non-U.S. Persons (particularly Middle East- and Asia-based.