USA*Engage Blog

The Magnitsky Muddle
Monday, 30 July 2012
by Dan O’Flaherty
Russia becomes a member of the World Trade Organization (WTO) on August 22 and Congress has to grant permanent normal trade relations (PNTR) to Russia by exempting them from the Jackson-Vanik amendment by then. Otherwise, American companies will not have the advantages that our negotiators have spent 19 years gaining for them in the Russian market. The Senate Finance and the House Ways and Means Committees have both done their duty and reported out identical bills granting PNTR to Russia and imposing comprehensive reporting requirements by USTR on Russian compliance. Fine.

Here's the rub. A few weeks earlier the Senate Foreign Relations and House Foreign Affairs Committees reported out different versions of the Sergei Magnitsky Rule of Law Accountability Act. This is in response to the now well-known torture and death in detention of a Russian lawyer who was hot on the trail of corrupt Russian officials. Many in Congress want to replace the Jackson-Vanik amendment, which dealt with Jewish immigration from the USSR, with updated human rights legislation that addresses contemporary Russian misdeeds.

The House version mandates the Secretary of State to create a list of Russians involved in Mr. Magnitsky's death. Those listed are to be denied visas to the United States and to have their U.S. assets frozen. It also provides that the chairpersons and ranking members of ten congressional committees – five in each chamber – can nominate people for the list. This approach is consistent with the new vogue in "smart sanctions" that target foreign perpetrators of bad acts and do it by going after their money.

Meanwhile, the Senate Finance Committee went way overboard and substituted the phrase "anywhere in the world" for "Russia." This raises the specter of a list whose authors, including 20 Members of Congress, are able to name and shame any foreign leader who in their view has committed a violation of internationally recognized human rights. It takes no imagination whatever to conjure up leaders of major nations, some of whom the U.S. even supports or needs (think Saudi Arabia, think China) who fit the bill.

Russia PNTR will not pass without a Magnitsky component. The question is which Magnitsky will it be? And vitally, when will it happen? As of today, Congress has one week before recess. By the time they come back in September Russia will have been a WTO member for about two weeks. And it's not at all clear that Congress would act on PNTR during their eight legislative days in September. This puts it over to a lame duck session when all hell may be breaking loose over sequestration and the debt ceiling, among other undone things. And if not lame duck, then it's next year when we will have a new Congress and possibly a new president and we will have to start all over again – as commercial opportunities in Russia are increasingly taken by our European and Asian competitors.

This is a mess and it is why the USA*Engage and the National Foreign Trade Council are urging this Congress and this President to get their act together right now and enact Russia PNTR with the House Foreign Affairs version of the Magnitsky bill.