Print
See related documents
A. Draft resolution
(open)
Report | Doc. 14661 | 30 October 2018
Sergei Magnitsky and beyond – fighting impunity by targeted sanctions
Committee on Legal Affairs and Human Rights
Summary
The Committee on Legal Affairs and Human Rights reaffirms its commitment to the fight against impunity of perpetrators of serious human rights violations and against corruption as a threat to the rule of law. It recalls Resolution 1966 (2014) “Refusing impunity for the killers of Sergei Magnitsky”, noting that instead of holding to account the perpetrators and beneficiaries of the crimes committed against Mr Magnitsky and disclosed by him, the Russian authorities have harassed the victim’s family and his former client, William Browder.
Meanwhile, several countries (Estonia, Latvia, Lithuania, the United Kingdom, Canada and the United States), have adopted “Magnitsky laws” to enable their governments to impose targeted sanctions such as visa bans and asset freezes on perpetrators and beneficiaries of serious human rights violations. The most recent such instruments cover any and all perpetrators of such violations enjoying impunity in their own countries.
All the member States of the Council of Europe are called upon to consider enacting legal instruments enabling their government to impose targeted sanctions on individuals reasonably believed to be personally responsible for serious human rights violations for which they enjoy impunity on political or corrupt grounds. Such instruments shall lay down a fair and transparent procedure as indicated in respect of terrorist offences in Resolution 1597 (2008). In addition, States are invited to refrain from co-operating with any politically motivated prosecutions relating to the Magnitsky case.
A. Draft resolution 
(open)1. The Parliamentary Assembly
reaffirms its commitment to the fight against impunity of perpetrators
of serious human rights violations and against corruption as a threat
to the rule of law.
2. It recalls its Resolution
1966 (2014) on refusing the impunity of the killers of Sergei Magnitsky,
urging the competent Russian authorities to fully investigate the
circumstances and background of the death in pretrial detention
of Sergei Magnitsky and to hold the perpetrators to account. Mr Magnitsky
had denounced a large-scale fraud against the Russian State budget
by criminals benefiting from the collusion of corrupt officials. Resolution 1966 (2014), adopted in January 2014, envisaged targeted sanctions,
such as visa bans and asset freezes, against the individuals involved
in this crime and its cover-up, as a means of last resort.
3. At the end of 2014, the Committee on Legal Affairs and Human
Rights took the view that the Russian Federation had not made any
progress in the implementation of the Assembly’s resolution. Instead
of holding to account the perpetrators of the crimes committed against
Mr Magnitsky and disclosed by him, the Russian authorities harassed
Mr Magnitsky’s mother, his widow and his former client, Mr William
Browder. In January 2015, the Assembly’s President therefore transmitted Resolution 1966 (2014) to all national delegations for follow-up by the competent
authorities.
4. Since then, the Russian authorities have still not made any
progress in prosecuting the perpetrators and beneficiaries of the
crime against Sergei Magnitsky, despite his family’s active engagement
in the proceedings. All criminal cases against the officials involved
in Mr Magnitsky’s ill-treatment and killing were closed; some of these
officials were publicly commended by senior representatives of the
State, and others received promotions.
5. The Assembly further notes that Mr Magnitsky’s former client,
Mr William Browder, who is leading a worldwide campaign against
impunity, continues to be harassed and persecuted by the Russian
authorities, among other things by repeated attempts to abuse Interpol’s
Red Notice and Diffusion procedures.
6. Meanwhile, several member and observer States (including Estonia,
Latvia, Lithuania, the United Kingdom, Canada and the United States)
have adopted legislative and other instruments to enable their governments
to impose targeted sanctions on perpetrators and beneficiaries of
serious human rights violations.
7. The Assembly welcomes the fact that the most recent such instruments
(in the United States, Canada and the United Kingdom) are not limited
to persons from particular countries, or found to be involved in particular
crimes, such as the killing of Sergei Magnitsky. They potentially
cover any and all perpetrators of serious human rights violations
enjoying impunity in their own countries, whichever they may be.
8. The United Kingdom’s Criminal Finances Act 2017 defines “gross
human rights abuse or violation” as cruel, inhuman or degrading
treatment or punishment of a person who has sought to expose illegal
activity carried out by a public official or a person acting in
an official capacity, or to defend or promote human rights and fundamental
freedoms; when such treatment is carried out by a public official
or a person acting in an official capacity or at the instigation
or with the consent of such an official. Similar definitions are
included in the United States and Canadian Magnitsky Acts.
9. The Assembly considers targeted (“smart”) sanctions against
individuals as preferable to general economic or other sanctions
against entire countries:
9.1. targeted
sanctions send a clear message to individual perpetrators of serious
human rights violations that they are not welcome in the countries
adopting the sanctions and that these countries will not allow them
to use their financial institutions to aid and abet their reprehensible
actions or enjoy the proceeds of their crimes;
9.2. general sanctions, by contrast, hurt mostly ordinary people
but least of all the ruling elites who are responsible for the actions
that gave rise to the sanctions.
10. The Assembly also recalls its Resolution 1597 (2008) on UN Security Council and EU anti-terrorism blacklists
and insists that the requirements of procedural fairness and transparency
laid down in this resolution shall also apply to those accused of
serious human rights violations other than terrorism.
11. The Assembly therefore calls on all member States of the Council
of Europe, the European Union and States having observer or any
other co-operative status with the Council of Europe and its Parliamentary Assembly
to:
11.1. consider enacting legislation
or other legal instruments enabling their executive, under the general
supervision of parliament, to impose targeted sanctions such as
visa bans and account freezes on individuals reasonably believed
to be personally responsible for serious human rights violations
for which they enjoy impunity on political or corrupt grounds;
11.2. ensure that such legislation or legal instrument lays
down a fair and transparent procedure for the imposition of targeted
sanctions as indicated in respect of terrorist offences in Resolution 1597 (2008), in particular by making sure that:
11.2.1. targeted persons are informed
of the imposition of sanctions and of the full and specific reasons
for their imposition, and that they are given the opportunity to
respond within a reasonable time to the case made in support of
the sanctions;
11.2.2. the instance taking the decision on imposing sanctions
is independent of that collecting information and proposing to include
a person in the sanctions list;
11.2.3. the initial decision to impose sanctions may be challenged
before a court of law or an appeals body that enjoys sufficient
independence and decision-making powers, including the power to
delist a targeted person and to provide him or her with adequate
compensation in case of erroneous sanctions;
11.3. co-operate with one another in identifying appropriate
target persons, including the use of relevant European Union mechanisms
and by sharing information on persons included in sanctions lists and
the grounds for their reasonable belief that these persons are responsible
for serious human rights violations and benefit from impunity on
political or corrupt grounds;
11.4. make use of the vast pool of information and evidence
on serious human rights violations whose perpetrators enjoy impunity
collected and documented by local, national and international non-governmental
human rights organisations, and, amongst others, the “Natalya Estemirova Documentation
Centre” in Oslo (Norway);
11.5. refrain from co-operating with any politically motivated
prosecutions relating to the Magnitsky case, such as the ones focusing
on his former client, Mr William Browder.
12. In addition, the Assembly encourages its member parliamentarians
to:
12.1. follow the precedent set
by fellow parliamentarians in a number of those countries which
have already taken action in this field by seeking to persuade their
governments to adopt similar proposals and, where appropriate, to
take legislative initiatives themselves;
12.2. maintain close liaison with the Assembly on any such initiatives
they propose or have taken and seek relevant advice and assistance
from the Assembly if needed.
B. Explanatory memorandum by Lord Donald Anderson, rapporteur
(open)1. Introduction
1. The motion for a resolution
underlying the current report is intended as a follow-up to Parliamentary Assembly Resolution 1966 (2014) on refusing impunity for the killers of Sergei Magnitsky.
2. The Assembly was appalled by the death in pretrial detention,
in 2009, of the Russian tax and accountancy expert, Sergei Magnitsky.
Mr Magnitsky had carried out investigations into a massive tax reimbursement
fraud against the Russian State budget perpetrated by the abuse
of investment vessels captured from Mr Magnitsky’s client, Mr William
Browder, by criminals benefiting from the collusion of corrupt police
and tax officials. After the complaints he had prepared were entrusted
for investigation to the very officials whom he had accused of complicity
in the suspected fraud, Mr Magnitsky was himself detained for alleged
tax evasion. When he refused to change his testimony, he faced increasingly
harsh conditions of detention despite his declining health, including
acute pancreatitis for which he was refused necessary surgery. Mr Magnitsky
finally died in terrible circumstances in pretrial detention after
he was beaten with rubber batons, which were used to “pacify” him
when he screamed in agony. The Assembly was further appalled that
none of the officials responsible for Mr Magnitsky’s death had been
punished. On the contrary, some enjoyed promotions and public praise
by senior representatives of the State, whilst Mr Magnitsky himself
was prosecuted posthumously, something which may properly be considered
as the ultimate absurdity.
3. Based on a detailed analysis of these events, the Assembly
urged the competent Russian authorities to investigate fully the
circumstances and background of Mr Magnitsky’s death, and the possible
criminal responsibility of all officials involved. The circumstances
considered by the Assembly included contradictory testimony by prison
officials and other witnesses, the existence of two contradictory
versions of the official provisional “death report”, and the origin
of the extreme wealth newly displayed by certain retired Interior Ministry
and tax officials. The Assembly particularly highlighted purchases
of property in Dubai by a number of officials involved. The Assembly
considered that targeted sanctions against the individuals involved
– such as visa bans and asset freezes – should be imposed as a means
of last resort.
4. In Resolution 1966
(2014), which was adopted by an overwhelming majority, the
Parliamentary Assembly reiterated its strong support for the fight
against impunity and corruption, seen as threats to the rule of
law. The Assembly also resolved to closely follow the implementation
of the concrete proposals it had addressed to the Russian authorities
in order to ensure that the perpetrators and beneficiaries of the
crime against Sergei Magnitsky be held to account. It further resolved
that:
“if, within a reasonable period of time, the competent authorities have failed to make any or any adequate response to this resolution, the Assembly should recommend to member States of the Council of Europe to follow as a last resort the example of the United States in adopting targeted sanctions against individuals (including visa bans and freezing of accounts), having first given those named individuals the opportunity to make appropriate representations in their defence.”
5. As explained in detail in the addendum to the report prepared
by Mr Gross, the competent Russian authorities’ response to the
Assembly’s recommendations was indeed quite inadequate. This was
confirmed by the Committee on Legal Affairs and Human Rights at
its meetings on 29 September and 10 December 2014. The committee
took the view that the Russian Federation had not made any progress
in the implementation of the Assembly’s resolution and asked the
President to follow up this matter with national parliaments. Instead of
holding to account the perpetrators of the crimes committed against
Mr Magnitsky and those disclosed by him, the Russian authorities
harassed Mr Magnitsky’s mother, his widow and his former client,
Mr William Browder. On 6 January 2015, the then President of the
Assembly, Ms Anne Brasseur, transmitted Resolution 1966 (2014) and related documents to all Heads of national delegations
and requested them to take the matter up with the relevant national
authorities.
6. Subsequently, several member States of the Council of Europe
and countries having observer status (Estonia, Latvia, Lithuania,
the United Kingdom, as well as Canada and the United States have
adopted legislation or other legal instruments to enable their governments
to impose targeted sanctions against perpetrators or beneficiaries
of serious human rights violations such as the killing of Sergei
Magnitsky. In the motion for a resolution underlying the present
report, the Assembly was invited to examine these initiatives and to
encourage other member and observer States to follow suit as appropriate. It is noteworthy
that what began in the United States in 2012 as the possibility
to impose sanctions on persons responsible for a crime against one
individual, Sergei Magnitsky, was broadened in 2016 into the possibility
to impose sanctions (freezing of assets and visa bans) against any
and all serious violators of human rights who enjoy impunity on
political or corrupt grounds.
It is noteworthy
that what began in the United States in 2012 as the possibility
to impose sanctions on persons responsible for a crime against one
individual, Sergei Magnitsky, was broadened in 2016 into the possibility
to impose sanctions (freezing of assets and visa bans) against any
and all serious violators of human rights who enjoy impunity on
political or corrupt grounds. 7. Mr Magnitsky’s former client continues to be persecuted by
the Russian authorities to this day, among other things by repeated
attempts to abuse Interpol’s Red Notice procedure. So far, all these
attempts have been unsuccessful. Mr Browder is campaigning worldwide
for the enactment of “Magnitsky laws” providing for targeted sanctions
(e.g. travel bans, asset freezes) against officials responsible
for the death of Mr Magnitsky and those who benefited from the crime
he had denounced. The scope of these laws has been widened in several
countries to cover all individuals who are personally responsible
for serious human rights violations and who benefit from de facto impunity in their own countries.
So far, all these
attempts have been unsuccessful. Mr Browder is campaigning worldwide
for the enactment of “Magnitsky laws” providing for targeted sanctions
(e.g. travel bans, asset freezes) against officials responsible
for the death of Mr Magnitsky and those who benefited from the crime
he had denounced. The scope of these laws has been widened in several
countries to cover all individuals who are personally responsible
for serious human rights violations and who benefit from de facto impunity in their own countries.8. As announced in my introductory memorandum discussed at the
meetings of the Committee on Legal Affairs and Human Rights in April
2018 in Strasbourg and in May 2018 in Reykjavik, I shall first provide
a brief update on the follow-up by the Russian authorities to the
Magnitsky case since the adoption of Resolution 1966 (2014), including the disinformation campaign directed against
the Assembly’s 2014 report and progress made by law-enforcement
bodies in different countries in following the “money trail” of
the stolen tax money, which amounts to approximately US$230 million.
9. Secondly, I shall examine the “Magnitsky laws” that have already
been adopted in several countries. After briefly recalling the advantages
of targeted versus general sanctions, I will focus on common features
of these laws regarding criteria and procedures for the identification
of persons to be subjected to targeted sanctions, on the difficulties
which parliaments faced in adopting these laws, and how they managed
to overcome them.
10. Last but not least, I shall take a closer look at the “defence
rights” required in view of the Assembly’s well-established record
for upholding the right of persons included in sanctions lists for
alleged wrongdoings. This point was already mentioned in Resolution 1966 (2014) and must not be neglected, as a matter of the Assembly’s
credibility as a defender of human rights. The Assembly laid down
relevant requirements in Resolution
1597 (2008) on UN Security Council and EU anti-terrorism blacklists,
and we must ensure that these safeguards also apply to those accused
of serious human rights violations other than terrorism.
11. Based on this work, I have developed concrete proposals for
further action, summed up in the draft resolution addressed to all
member and observer States and to members of the Assembly taking
on board best practices and lessons learnt. The aim of this report
is thus to encourage members of the Assembly to examine the response
of parliamentarians in other countries who have legislated for sanctions
against those who commit serious human rights abuses; and, at the
same time, to adapt and adopt such laws or other legal instruments
as appropriate in their own parliaments. Thus our recommendations
are not intended to be prescriptive. After all, fellow parliamentarians
are the experts on the procedures and legislative opportunities in
their own countries; in most if not all
countries the lead has been taken by parliamentarians urging successfully
their sometimes hesitant governments to take action.
2. New developments concerning the Magnitsky case since December 2014
2.1. Follow-up by the Russian authorities: disinformation instead of accountability
12. In December 2014, the lawyer
for Ms Magnitskaya filed a complaint before the Investigations Department
of the Russian Investigative Committee raising the failure to conduct
thorough, full and comprehensive investigations into the death of
her husband, including failure to question officials named as suspects,
loss of evidence, refusal of independent post mortem examinations
and failure to examine possible conflict of interest issues. The
complaint was rejected by the Head of the Investigations Department, Mr Tshukin.
13. In January 2015, the Magnitsky family’s lawyer filed an application
to investigate and prosecute Mr Tagiev, the head of the Matrosskaya
Tishina detention centre (where Mr Magnitsky died), for providing
false information during the investigation into Mr Magnitsky’s death
by stating in a letter dated 16 March 2011 that no CCTV recordings
existed for the areas where Mr Magnitsky spent his last hours and
was found dead. This was contrary to evidence held in the criminal
case file, including photos of CCTV cameras in the areas in question,
testimony of prison staff, and records of the equipment of the detention
centre with CCTV cameras including their location. But the applications
were refused by the Preobrazhensky District Court and the Moscow
City Court in June 2015.
14. In February 2015, the Magnitsky family’s lawyer filed a complaint
against the decree to terminate the investigation into Mr Magnitsky’s
death, citing in particular the lack of investigation into the use
of rubber batons and handcuffs. The complaint was rejected in February
2015 on the ground that “data about the possible use of a rubber
baton was checked and did not find confirmation” – despite the fact
that the official forensic medical report contains conclusions that
the injuries on Mr Magnitsky’s body were consistent with the use
of a hard blunt object such as a rubber baton. Interestingly, the
use of rubber batons was already documented in the Assembly’s 2014
report by Mr Gross, on the basis of a copy of a prison administration
document on the use of “special means” to “pacify” Mr Magnitsky.
In the version of this document of which Mr Gross had obtained a copy
from the “Public Oversight Committee” (the official Russian National
Protection Mechanism under the UN anti-torture Convention), which
had taken copies of relevant documents before any cover-up could
be organised, the “special means” whose use was reported in this
document included handcuffs and batons. In a later “version” of
the otherwise identical document, only handcuffs were mentioned
in the bracketed text detailing the “special means” used.
15. In February, March and April 2015, the Magnitsky family’s
lawyer also filed complaints against the posthumous naming, in the
decree closing the investigation into his death, of Sergei Magnitsky
as a perpetrator of the US$230 million fraud that he had denounced,
respectively of the laundering of the proceeds from the fraud, and
seeking to admit evidence of Mr Magnitsky’s innocence. All these
applications were rejected in the final instance in May 2015. A
similar application (prompted by new posthumous accusations against
Sergei Magnitsky in a reply to a mutual legal assistance request
from the United States) was refused in January/March 2016.
16. In December 2015, Russian General Prosecutor Chaika publicly
accused Mr Magnitsky and Mr Browder of having themselves committed
the US$230 million fraud denounced by them and suggested that Mr Browder was
responsible for the deaths of three Russian citizens. In the same
month, the Russian Investigative Committee launched an investigation
into the deaths of three persons – MM. Korobeinikov, Kurochkin and Gasanov
– against Mr Browder. In April 2017, Russian State television aired
a feature accusing Mr Browder and the CIA of murdering Mr Magnitsky,
with the Prosecutor General’s office and the Investigative Committee announcing
an investigation in this sense.
17. In January 2017, Mr Nikolai Gorokhov, lawyer for the Magnitsky
family, filed criminal complaints against two investigators for
abuse of office and collusion with alleged suspects. He also provided
evidence to the American authorities on the laundering of part of
the proceeds of the crime denounced by Mr Magnitsky in New York.
In March 2017, before the hearings concerning these complaints,
Mr Gorokhov fell from the balcony of his (fourth-floor) apartment. He
miraculously survived the fall, details of which he cannot remember.
But reportedly, unknown persons were seen next to him on the balcony,
and he had earlier received several death threats.
He
miraculously survived the fall, details of which he cannot remember.
But reportedly, unknown persons were seen next to him on the balcony,
and he had earlier received several death threats.18. In July and October 2017, the Russian authorities made two
more (the fourth and fifth) requests to Interpol for issuing Red
Notices, respectively “Diffusions”, requesting Mr Browder’s
arrest. They were eventually refused as being politically motivated.
A sixth attempt by Russia to have Mr Browder arrested recently failed
in Spain, on 30 May 2018. Mr Browder was briefly detained by Spanish
police on the ground of a bilateral request from Russia – ironically,
he was in Spain in order to testify before senior Spanish prosecutors on
the laundering, in Spain, of part of the proceeds of the crime denounced
by Mr Magnitsky – but was released shortly thereafter after the
Spanish authorities were informed of the political motivation behind
the Russian request.
requesting Mr Browder’s
arrest. They were eventually refused as being politically motivated.
A sixth attempt by Russia to have Mr Browder arrested recently failed
in Spain, on 30 May 2018. Mr Browder was briefly detained by Spanish
police on the ground of a bilateral request from Russia – ironically,
he was in Spain in order to testify before senior Spanish prosecutors on
the laundering, in Spain, of part of the proceeds of the crime denounced
by Mr Magnitsky – but was released shortly thereafter after the
Spanish authorities were informed of the political motivation behind
the Russian request. 19. Finally, in December 2017, Mr Browder and his colleague, Mr Cherkasov,
were convicted in absentia and
sentenced to long prison terms for tax evasion and fraudulent bankruptcy
by the Tverskoi District Court in Moscow. In criminal proceedings
still ongoing in October 2018 it is alleged that Mr Magnitsky and
Mr Browder were themselves the perpetrators of the US$230 million
fraud denounced by them, whilst the true perpetrators, the “Klyuev
Group”, and the tax and police officials involved in the crime and
its cover-up are exonerated, despite their
unexplained wealth (luxury properties and other assets in Russia,
Dubai, Cyprus and elsewhere, as documented in the Assembly’s 2014
report ). On the other hand,
the case against the lawyer retained by Hermitage, Mr Khareitdinov,
is still continuing, despite the Assembly’s specific call to the
contrary in Resolution 1966
(2014). Mr Khareitdinov
is being prosecuted for use of a “false power of attorney” because
he acted on behalf of the true owners of the Hermitage firms also
after they were hijacked by the “Kluyev Group”.
despite their
unexplained wealth (luxury properties and other assets in Russia,
Dubai, Cyprus and elsewhere, as documented in the Assembly’s 2014
report ). On the other hand,
the case against the lawyer retained by Hermitage, Mr Khareitdinov,
is still continuing, despite the Assembly’s specific call to the
contrary in Resolution 1966
(2014). Mr Khareitdinov
is being prosecuted for use of a “false power of attorney” because
he acted on behalf of the true owners of the Hermitage firms also
after they were hijacked by the “Kluyev Group”.20. To complete this picture of systematic official obfuscation
of the truth and continued harassment of the victims, I should briefly
refer to an unusual campaign of disinformation aimed at discrediting
the Assembly’s 2014 report on the Magnitsky case. A full-length
“investigative documentary film” presented in the spring of 2016
by the well-known Russian film-maker Andrei Nekrasov purported to
present the “truth” (that is to say the official Russian line) on
the Magnitsky case. The film was to be aired, inter
alia, on French and German public television channels.
The film-maker used highly unfair methods trying to make the Assembly’s
rapporteur and fellow parliamentarians who had supported the report
during the debate in the Assembly appear as ill-informed and incompetent,
even accusing one of them (Ms Marieluise Beck, Germany/Greens) of
being an agent of the CIA. Thanks to timely interventions by several
members and former members of our committee, including its then
Vice-Chairperson, Mr Fabritius, and Mr Gross himself, the airing
of this glaring example of “fake news” was prevented at the last
moment and a misleading interview by Mr Nekrasov in the Frankfurter Allgemeine Zeitung was
rectified.
2.2. The money trail: investigations into proceeds from the crime denounced by Sergei Magnitsky
21. William Browder and his team
stubbornly continued their efforts to follow the trail of the money
stolen by the perpetrators of the crime denounced by Sergei Magnitsky,
transmitting relevant information obtained from whistle-blowers
such as Mr Alexander Perepilichny (who died in suspicious circumstances
in the United Kingdom in November 2012 ) to the law-enforcement bodies
of the countries concerned (12 so far: Cyprus, France, Estonia,
Latvia, Lithuania, Luxembourg, the Republic of Moldova, the Netherlands,
Spain, Switzerland, the United Kingdom and the United States). I
met with Mr Browder and his team at their premises in London, together
with our rapporteur on the Russian and Azerbaijani “Laundromats”,
Mr Mart van de Ven (Netherlands, ALDE). The experience gained by
Mr Browder’s team in pursuing the money trail from the US$230 million
fraud against the Russian budget is highly relevant also for the
Council of Europe’s ongoing fight against large-scale corruption
and money-laundering in general. I trust Mr van de Ven will refer
to them in his future report, as appropriate, and draw the necessary
conclusions. As far as my report is concerned, I welcome the fact
that, so far, close to 20% of the US$230 million has already been
recovered, despite the highly sophisticated money laundering methods
used and the reluctance of several countries to investigate these
cases (according to Mr Browder, the reluctant countries include
Cyprus, but, more surprisingly perhaps, also Latvia and, for some time,
the United Kingdom). One of Mr Browder’s team members, referring
to inside information, considers that the US$230 million in question
were laundered through a well-established “pipe” controlled by a
special department (“Department K”) of the FSB. In his view, access
to this “pipe” is occasionally granted to ordinary organised criminals,
but it is primarily used for “official” purposes, such as funding
activities aimed at influencing political developments in certain
countries, besides “rewards” for corrupt officials. Given the “red
flag” system in place in the Russian Federation regarding outbound
capital movements, the laundering of the proceeds of the crime disclosed
by Sergei Magnitsky must have been “authorised” by senior officials.
While I have not seen sufficient evidence to endorse this thesis,
it would go a long way towards explaining why the Russian authorities
refuse to provide any assistance – including in response to official
mutual legal assistance requests from law-enforcement bodies of
other countries – to those trying to recuperate the funds that were
undisputedly stolen from the Russian budget. As Mr Gross had suspected
before, Sergei Magnitsky may well have died because in blowing the
whistle on the US$230 million tax reimbursement fraud, he had tripped
over the tip of an iceberg made up of what Mr van de Ven has called
“reverse money laundering”, or “black-washing” – i.e. diverting
legal budgetary funds (subject to a level of budgetary controls)
into a massive “parallel budget” used for all kinds of opaque purposes.
) to the law-enforcement bodies
of the countries concerned (12 so far: Cyprus, France, Estonia,
Latvia, Lithuania, Luxembourg, the Republic of Moldova, the Netherlands,
Spain, Switzerland, the United Kingdom and the United States). I
met with Mr Browder and his team at their premises in London, together
with our rapporteur on the Russian and Azerbaijani “Laundromats”,
Mr Mart van de Ven (Netherlands, ALDE). The experience gained by
Mr Browder’s team in pursuing the money trail from the US$230 million
fraud against the Russian budget is highly relevant also for the
Council of Europe’s ongoing fight against large-scale corruption
and money-laundering in general. I trust Mr van de Ven will refer
to them in his future report, as appropriate, and draw the necessary
conclusions. As far as my report is concerned, I welcome the fact
that, so far, close to 20% of the US$230 million has already been
recovered, despite the highly sophisticated money laundering methods
used and the reluctance of several countries to investigate these
cases (according to Mr Browder, the reluctant countries include
Cyprus, but, more surprisingly perhaps, also Latvia and, for some time,
the United Kingdom). One of Mr Browder’s team members, referring
to inside information, considers that the US$230 million in question
were laundered through a well-established “pipe” controlled by a
special department (“Department K”) of the FSB. In his view, access
to this “pipe” is occasionally granted to ordinary organised criminals,
but it is primarily used for “official” purposes, such as funding
activities aimed at influencing political developments in certain
countries, besides “rewards” for corrupt officials. Given the “red
flag” system in place in the Russian Federation regarding outbound
capital movements, the laundering of the proceeds of the crime disclosed
by Sergei Magnitsky must have been “authorised” by senior officials.
While I have not seen sufficient evidence to endorse this thesis,
it would go a long way towards explaining why the Russian authorities
refuse to provide any assistance – including in response to official
mutual legal assistance requests from law-enforcement bodies of
other countries – to those trying to recuperate the funds that were
undisputedly stolen from the Russian budget. As Mr Gross had suspected
before, Sergei Magnitsky may well have died because in blowing the
whistle on the US$230 million tax reimbursement fraud, he had tripped
over the tip of an iceberg made up of what Mr van de Ven has called
“reverse money laundering”, or “black-washing” – i.e. diverting
legal budgetary funds (subject to a level of budgetary controls)
into a massive “parallel budget” used for all kinds of opaque purposes.22. Among the most noteworthy events in this context after January
2015 are the opening of money laundering investigations by the French
authorities (May 2015) in connection with the US$230 million fraud
and the raid, in November 2015, of Hermitage’s Cypriot lawyers’
office, upon a request by Russia based on the criminal case against Mr Browder. By contrast,
in June 2016, the Cypriot authorities refused to act on Hermitage’s
submissions denouncing a fraud against two Cypriot companies owned
by Hermitage and money laundering in Cyprus through accounts controlled
by Mr Kluyev. Meanwhile, Mr Browder
has launched a court case in Cyprus aimed at preventing the Cypriot
attorney general’s office from co-operating with the Russian general
prosecutor’s office due to the alleged political motivations of
the proceedings. I was recently informed by the lawyer acting on
behalf of Mr Browder in Cyprus, Christos Pourgourides, that
the District Court of Nicosia, on 3 August 2018, refused the interim
injunction requested by Mr Pourgourides, arguing that subsequent
pecuniary damages can be an adequate remedy. On substance, the judge
ruled:
Meanwhile, Mr Browder
has launched a court case in Cyprus aimed at preventing the Cypriot
attorney general’s office from co-operating with the Russian general
prosecutor’s office due to the alleged political motivations of
the proceedings. I was recently informed by the lawyer acting on
behalf of Mr Browder in Cyprus, Christos Pourgourides, that
the District Court of Nicosia, on 3 August 2018, refused the interim
injunction requested by Mr Pourgourides, arguing that subsequent
pecuniary damages can be an adequate remedy. On substance, the judge
ruled:«… I find that the applicants/plaintiffs have satisfied the second requirement of section 32 of the Courts of Justice Law, that is that they have a reasonable prospect of success, as they have produced evidence from which it is shown that they have an arguable case relating to the violation of their rights safeguarded by the Constitution and not only this. All the allegations and arguments that have been raised by the defendant, I do not find that they weaken the evidential power of the plaintiff’s case to the extent that I can rule that they have no reasonable prospect of success at the trial of the action.»
It should be noted that in 2017, the United Kingdom refused similar Russian mutual legal assistance requests, precisely because of their alleged political motivation.
23. Finally, Hermitage submitted
new information regarding the laundering of the US$230 million to
the law-enforcement bodies of Latvia (December 2016), the United
Kingdom (May 2017), the Netherlands (whose authorities froze assets
of a firm owned by the son of a senior Russian government official,
Mr Katsyv, in May 2017) and Spain (March 2018). In
February 2018, the same firm owned by Mr Katsyv was ordered to pay
the U.S. Treasury over US$6 million as part of a “settlement” in the money-laundering case of US v. Prevezon connected to the
US$230 million fraud. Money laundering investigations related to
the proceeds of the crime denounced by Mr Magnitsky are continuing
in France, the Netherlands and Switzerland (where, in January 2018,
a court confirmed the dismissal of a Swiss police officer alleged
to have inappropriately co-operated with Russian officials and private
parties in connection with proceedings on the laundering of part
of the US$230 million).
In
February 2018, the same firm owned by Mr Katsyv was ordered to pay
the U.S. Treasury over US$6 million as part of a “settlement” in the money-laundering case of US v. Prevezon connected to the
US$230 million fraud. Money laundering investigations related to
the proceeds of the crime denounced by Mr Magnitsky are continuing
in France, the Netherlands and Switzerland (where, in January 2018,
a court confirmed the dismissal of a Swiss police officer alleged
to have inappropriately co-operated with Russian officials and private
parties in connection with proceedings on the laundering of part
of the US$230 million).3. “Magnitsky laws” adopted so far: challenges and successes
24. As mentioned above, four member
States of the Council of Europe (in chronological order, Estonia, Lithuania,
Latvia and the United Kingdom) and two States having observer status
with the Organisation (the United States) or with the Parliamentary
Assembly (Canada) have so far adopted “Magnitsky laws”. In
2012, the U.S. “Magnitsky Act” empowered the government to impose
targeted sanctions (freezing of assets and visa bans) on persons
found responsible for one crime against one individual, Sergei Magnitsky.
The scope of this law was broadened by the 2016 “Global Magnitsky
Act” to include the possibility of targeted sanctions against any and all serious violators of
human rights who enjoy impunity on political or corrupt grounds,
anywhere in the world. As explained by Canadian Senator Raynell
Andreychuk at our committee meeting in Reykjavik, the Canadian legislation,
which was passed on her initiative by unanimous votes in both houses
of parliament, also follows the broader, “global” approach.
In
2012, the U.S. “Magnitsky Act” empowered the government to impose
targeted sanctions (freezing of assets and visa bans) on persons
found responsible for one crime against one individual, Sergei Magnitsky.
The scope of this law was broadened by the 2016 “Global Magnitsky
Act” to include the possibility of targeted sanctions against any and all serious violators of
human rights who enjoy impunity on political or corrupt grounds,
anywhere in the world. As explained by Canadian Senator Raynell
Andreychuk at our committee meeting in Reykjavik, the Canadian legislation,
which was passed on her initiative by unanimous votes in both houses
of parliament, also follows the broader, “global” approach.25. Senator Raynell Andreychuk and colleagues from the Baltic
countries, who – also at our committee meeting in Reykjavik – shared
their own parliaments’ experiences in achieving the adoption of
“Magnitsky legislation” agreed that the passage of the texts in
their countries was clearly facilitated by their “global” approach:
by not singling out one country in particular, or suspected human
rights violators from one country, the movers of these instruments
succeeded in deflecting accusations of double standards or inappropriate geopolitical
motives. Interestingly, the first group of persons listed after
the adoption of the Canadian legislation includes suspected high-ranking
military thugs from Venezuela and South Sudan. The reference to
the name of Sergei Magnitsky in these laws is no more than a well-deserved
tribute to the brave Russian lawyer who lost his life for upholding
the truth. I should like to stress that I also favour the global
scope of the more recently adopted instruments. Such emphasis is
surely wholly in conformity with the very raison d’être of the Council
of Europe.
26. Another challenge that must be overcome in order to facilitate
the passage of Magnitsky-type instruments is the fear that sanction
regimes often tend to cause harm to the wrong people. This may indeed be
true for general sanctions, for example trade embargoes. These often
have dire consequences for vulnerable population groups in the countries
concerned, but generally not for their leadership. Those in power, whose
actions caused the sanctions to be imposed and who have the power
to eliminate the grounds for the sanctions, also have the means
to offset the consequences of the sanctions for themselves.
27. By contrast, targeted (or “smart”) sanctions do not create
economic hardship for ordinary people and focus instead on individual
accountability of persons who are found to be directly responsible
for the impugned actions. What convinced many sanction sceptics
in Canada and elsewhere was Ms Raynell Andreychuk’s argument that
allowing such individuals to enter our countries, allowing them
to make use of our institutions, in particular our banks, in fact
amounts to “aiding and abetting” their reprehensible actions or
helping them to enjoy the proceeds of their crimes. Surely, this
is not something we want to be associated with, let alone profit from
financially, for example by collecting banking fees or selling luxury
goods to such people. In the words of British Prime Minister Theresa
May, these people are “not welcome” in
our countries.
these people are “not welcome” in
our countries.28. Another important lesson learnt from parliaments which successfully
adopted “Magnitsky laws” is that such initiatives must be supported
from the start across party lines. This was clearly the case in
the United Kingdom, as confirmed by my fellow British parliamentarians,
who were instrumental in overcoming the government’s initial resistance
against the “Magnitsky amendments” to the Sanctions Act, and whom
I consulted extensively in the preparation of this report. The leaders
of this initiative in the United Kingdom Parliament were drawn from
senior members of the Conservative, Labour, Scottish National and
Liberal Democrat parties.
29. The final challenge that needs to be addressed in order to
successfully pass and apply “Magnitsky laws” is the need for appropriate
safeguards to avoid wrongful listings. I will address this in the
next chapter.
4. Safeguards needed in light of Resolution 1597 (2008)
30. The call for targeted sanctions
against human rights violators enjoying impunity in their own countries
is meant to promote respect for human rights and must not give rise
to new human rights violations. “Smart sanctions” such as travel
restrictions and freezing of assets clearly have a direct impact
on individual human rights such as freedom of movement and the protection
of property. Whilst it is still being debated whether such sanctions
have a criminal, administrative or civil character, their imposition
must respect certain minimum standards of procedural protection
and legal certainty. High standards in procedural and substantive
terms must be guaranteed in order to ensure the credibility and
effectiveness of sanctions. As far as the Assembly is concerned, Resolution 1597 (2008) on UN Security Council and European Union blacklists
has laid down appropriate standards based on the European Convention
on Human Rights (ETS No. 5, “the Convention”). The Assembly must
now require the same standards and safeguards for “Magnitsky laws”
targeting other categories of human rights violators than terrorists
and their supporters.
31. The proposed standards are laid down in paragraph 11.2 of
the draft resolution and its sub-paragraphs. Based on Article 6
of the Convention, it is required first and foremost that target
persons are informed of the fact of the imposition of sanctions,
including their nature, and of the reasons for which they are imposed.
Target persons must be given the opportunity to respond to the case
made in support of the sanctions. This can be done by written procedure,
within a reasonable time frame, for both sides.
32. The second requirement is that the instance taking the decision
on imposing sanctions must be independent of the body collecting
and evaluating the information and proposing to include a person
in the sanctions list – a consequence of the basic principle of
procedural fairness that the investigator and accuser (“prosecutor”)
must not be identical with the decision-maker (“judge”).
33. Last but not least, it must be possible for the targeted person
to challenge the initial decision to impose sanctions before an
appeals body that enjoys sufficient independence and decision-making
powers, including the power to delist a targeted person and to provide
him or her with adequate compensation in case of erroneous sanctions.
34. The distribution of competences and the practical organisation
of proceedings must be decided by each country, in light of its
own institutional arrangements and operational possibilities. The
quality of the decision-making process can be much improved by international
co-operation, in particular the sharing of information on possible
target persons and of his or her response to the factual allegations
made in support of the imposition of sanctions.
35. In this context, it should be noted that impartial and reliable
information on the identity of persons found to be responsible for
serious human rights violations and benefiting from impunity in
their own countries can also be obtained from non-governmental organisations.
I draw attention to the excellent work of the “Natalya Estemirova
Documentation Centre (NEDC)” based in Oslo (Norway), which pools
relevant information on serious human rights violations, witness
testimony, documentary evidence and information on investigations carried
out (or not) by the competent law-enforcement bodies. The NEDC,
which brings together researchers from nine leading human rights
organisations (including the Norwegian Helsinki Committee, HRC “Memorial”, Human
Rights Watch and the International Federation for Human Rights (FIDH))
has developed and is maintaining a searchable database on human
rights violations that have not been properly investigated by the competent
authorities. Its creation can indeed be seen as a positive response
by civil society to a call the Assembly addressed to the Committee
of Ministers in Recommendation
1922 (2010) on legal remedies for human rights violation in the
North Caucasus region, namely to “consider creating, within
the Council of Europe and with the collaboration of non-governmental
organisations working in this field, a record-keeping system for
the witness statements, documents and evidence substantiating human
rights violations committed in the region”.
based in Oslo (Norway), which pools
relevant information on serious human rights violations, witness
testimony, documentary evidence and information on investigations carried
out (or not) by the competent law-enforcement bodies. The NEDC,
which brings together researchers from nine leading human rights
organisations (including the Norwegian Helsinki Committee, HRC “Memorial”, Human
Rights Watch and the International Federation for Human Rights (FIDH))
has developed and is maintaining a searchable database on human
rights violations that have not been properly investigated by the competent
authorities. Its creation can indeed be seen as a positive response
by civil society to a call the Assembly addressed to the Committee
of Ministers in Recommendation
1922 (2010) on legal remedies for human rights violation in the
North Caucasus region, namely to “consider creating, within
the Council of Europe and with the collaboration of non-governmental
organisations working in this field, a record-keeping system for
the witness statements, documents and evidence substantiating human
rights violations committed in the region”.5. Conclusions
36. The purpose of this report
is to encourage national parliaments to consider passing “Magnitsky
laws” providing for targeted sanctions against individuals found
personally responsible for serious human rights violations and who
enjoy impunity in their own countries, on political or corrupt grounds.
The emphasis is on “encourage” – each parliament shall decide for
itself on the most appropriate way to fight impunity. In my view, “Global
Magnitsky laws” that avoid singling out individual countries whilst
paying tribute to the brave lawyer who lost his life for defending
the truth are excellent tools in the fight against impunity. Their
very existence should also have a dissuasive effect on potential
perpetrators of serious human rights violations who feel shielded
from being held to account in their own countries, but wish to enjoy
the fruits of their misdeeds abroad.
37. This report is based on the understanding that “targeted sanctions”
applied to individuals in order to promote accountability for their
own actions are preferable to general economic or other sanctions
targeting a country as a whole. As explained above, targeted sanctions
avoid economic hardship for ordinary people and hold to account
only the individuals directly responsible for the impugned actions.
38. It is true that serious human rights violations such as those
for which we are advocating the imposition of targeted sanctions
are, in most countries, also criminal offences. Holding perpetrators
of criminal offences to account is normally the responsibility of
the national law-enforcement bodies. But
it has become abundantly clear in the Magnitsky case, a case that
has been particularly well-documented by this Assembly, that not all perpetrators of serious
human rights violations are held to account by their own countries’
competent authorities. Many escape criminal responsibility – either
because the competent authorities are incompetent and overburdened,
or because the perpetrators enjoy high-level protection from criminal
prosecution, on political or corrupt grounds.
But
it has become abundantly clear in the Magnitsky case, a case that
has been particularly well-documented by this Assembly, that not all perpetrators of serious
human rights violations are held to account by their own countries’
competent authorities. Many escape criminal responsibility – either
because the competent authorities are incompetent and overburdened,
or because the perpetrators enjoy high-level protection from criminal
prosecution, on political or corrupt grounds.39. In such cases, targeted sanctions, administered in a proper
way, with appropriate safeguards as indicated above, can be highly
effective: persons responsible for serious human rights violations
are made to experience themselves some unpleasant consequences of
their actions, such as the inability to obtain visas for travel
to desirable foreign countries, or the freezing of their financial
assets abroad, which in turn are oftentimes the fruit of the very
violations for which they incur the sanctions. However, such sanctions
must not be confounded with criminal punishments. These would indeed
raise jurisdictional issues and would require more elaborate procedures.
I concede that targeted sanctions are mainly symbolic, intended
to pass a clear message to the persons directly concerned, namely
that the international community strongly disapproves of their actions.
In the words of British Prime Minister Theresa May, such persons
are “not welcome”, or, as Canadian Senator Raynell
Andreychuk explained to us in Reykjavik, we do not want to “aid
and abet” their reprehensible acts by granting them the use of our
countries’ institutions and helping them enjoy their ill-gotten gains.
The angry reactions by the targets of such sanctions and by their
protectors in high places observed so far show that this message
is indeed well-received.
or, as Canadian Senator Raynell
Andreychuk explained to us in Reykjavik, we do not want to “aid
and abet” their reprehensible acts by granting them the use of our
countries’ institutions and helping them enjoy their ill-gotten gains.
The angry reactions by the targets of such sanctions and by their
protectors in high places observed so far show that this message
is indeed well-received.40. Finally, two observations: firstly, this report and its recommendations
are wholly consistent with the very aims and ideals of the Council
of Europe as the paramount human rights institution in Europe, namely protection
of human rights; and secondly, to be effective in the implementation
of these recommendations parliamentarians should indicate to the
Assembly proposals they have initiated and any progress made as
a result; the Assembly shall provide relevant advice and useful
contacts.
Appendix – Synoptic table of existing “Magnitsky Laws” (countries, dates, titles and main features of the legislation)
(open)|
Country |
Date |
Title |
Main features of the legislation |
|---|---|---|---|
|
United States |
14.12.2012 |
Sergei Magnitsky Rule of Law Accountability Act |
|
|
Estonia |
8.12.2016 |
Amendments to the Law on Amending the Obligation to Leave and Prohibition of Entry Act 262 SE |
|
|
United States |
23.12.2016 |
The Global Magnitsky Human Rights Accountability Act |
|
|
United Kingdom |
21.2.2017 |
“Magnitsky Amendments” to the Criminal Finances Act 2017 |
|
|
Canada |
19.10.2017 |
The Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) |
|
|
Lithuania |
16.11.2017 |
“Magnitsky Amendments” to Article 133 of the Law on the Legal Status of Aliens |
|
|
Latvia |
8.2.2018 |
Parliamentary Resolution “On the proposal to introduce sanctions against the officials connected to the Sergei Magnitsky case” |
|
|
United Kingdom |
1.5.2018 (House of Commons) 21.5.2018 (House of Lords) |
“Magnitsky Amendments” to the Sanctions and Anti-Money Laundering Act 2018 (SAML) |
|