Global Magnitsky Sanctions

Global Magnitksy Law and Sanctions

U.S. Targets Chinese Belt & Road Project With Global Magnitsky Sanctions

The Treasury Department’s announcement of the sanctions speaks to the foreign policy and geostrategic significance of the UDG sanctions action. The release speaks of China’s “malign” investment in Cambodia, its use of the UDG projects in Cambodia to “advance ambitions to project power globally,” “disproportionality benefit” itself through BRI projects, and concerns that the Dara Kakor project “could be converted to “host military assets.” The Treasury Department’s language echoes U.S. concerns about the BRI and other Chinese international project financing activities, including that China engages in “debt trap” financing.
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Senate Bill Seeks Sanctions in Khashoggi Case, End to Yemen War

The Saudi Arabia Accountability and Yemen Act of 2018 seeks further sanctions for those responsible for the death of Jamal Khashoggi, including at the highest levels of the Saudi establishment, and an end to the war in Yemen. The Act adds a chapter to the unfolding story of Congress' increasing sanctions activism, stemming from a lack of faith that the Trump Administration will enforce sanctions with fidelity to law and national policy.
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Global Magnitsky Sanctions FAQs

The Global Magnitsky Act and Global Magnitsky Sanctions (GMS) are in the public discourse as a result of recent events, such as the case of U.S.-based journalist Jamal Khashoggi and the imposition of Global Magnitsky Sanctions on two Turkish officials in August. To help the public understand the Global Magnitsky framework, MassPoint Legal and Strategy Advisory has published the Global Magnitsky Sanctions FAQs
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Technology, Human Rights and Sanctions

Some Congress members are lobbying the Administration to impose human rights sanctions on Chinese officials and companies responsible for or complicit in abuses against China’s Uighur Muslim minority and other minorities. Two companies named, Dahua Technology and Hikvision, are very large, China-based global firms that produce surveillance products and systems. The bottom line is that the tech industry should take note of the development (even if no sanctions are imposed), as it foreshadows the legal and reputation risk issues they will, without doubt, face in connection with tech-enabled abuses, privacy encroachments, and other conduct by consumers of tech products and services.
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Global Magnitsky: The Swiss Army Knife of Sanctions

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.
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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.
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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.
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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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President Trump Promulgates Global Magnitsky Sanctions: EO 13818 Analysis

The Global Magnitsky Sanctions are extraordinary for a number of reasons. First, they are global in reach and require not jurisdictional nexus between the United States and the corrupt acts and human rights abuses they target. As to corruption, both the Global Magnitsky Act and EO 13818 define it broadly, well beyond U.S. and international frameworks that are concerned primarily or exclusively with bribery. The Global Magnitsky Sanctions also depart from U.S. and international anti-corruption frameworks by directly penalizing foreign government officials for corrupt acts. As discussed above, EO 13818 significantly expands the scope and reach of the Global Magnitsky Act and, in doing so, employs extraordinary theories of liability, such as strict and vicarious liability on the leaders or officials of any foreign entity that engaged in covered corrupt acts. Independently and together, the provisions of EO 13818 empower the United States, and particularly the Executive Branch, to sanction a wide range of persons and conduct without meeting the due process, evidentiary, or other requirements that would apply in U.S. courts. As indicated in a prior installment of this MassPoint series, 52 individuals and entities have so far been sanctioned under EO 13818. It remains to be seen how the Trump Administration (or subsequent administrations) will implement the Global Magnitsky Sanctions. For now, foreign persons in particular—both government and private—should familiarize themselves with the Global Magnitsky Sanctions and assess their risk for liability, particularly for facilitating corrupt acts such as by transferring the proceeds of corruption.
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