Global Magnitsky: The Swiss Army Knife of Sanctions
The Global Magnitsky corruption and human rights sanctions have been described as “smart sanctions” because they target specific conduct, rather than an entire country. To the extent that “smart” connotes limitation, the categorization should be taken with a grain of salt.
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 in the full article, as are some of the provisions that suggest the Global Magnitsky Sanctions were formulated for sweeping applicability and enforcement latitude.
Foreign and U.S. parties with international business, other activities, or connections should educate themselves, incorporate the Global Magnitsky Sanctions into their regulatory and compliance portfolios, and assess and mitigate their potential sanctions risk.
In doing so, special attention should be given to the sanctions provisions applicable to complicity, facilitation or other indirect or incidental conduct related to corruption and human rights abuse. Along these lines, banks and other financial services providers should take note of their particular risk of liability for transfers and facilitations of transfers of corrupt proceeds. Their anti-financial crime policies and resources (including personnel), should incorporate the Global Magnitsky Sanctions.
More generally, it would be unwise to assume that the Global Magnitsky Sanctions should concern only corrupt foreign officials, human rights abusers, and anti-corruption and human rights advocates. The Global Magnitsky Sanctions cast a wide net.
As the sanctions provisions discussed above indicate, a wide range of parties around the world are potentially sanctionable for, among other acts, certain associations with culpable parties and unwitting facilitation of corruption and human rights abuses before and after the fact.