Time to act on Magnitsky
Saturday, August 31, 2019
Justinian in Law & Justice, Magnitsky

Where's our Magnitsky Act? ... An effective way of dealing with corrupt individuals who violate human rights ... Lapsed Bill in the Commonwealth parliament ... Giving human rights an effective weapon ... The legacy of Russia's abuse of power and the calculated killing of state enemies ... Greg Hogan reviews the NSW Law Society forum on the shape of a local Magnitsky law 

The grave of Sergei Leonidovich Magnitsky in Moscow

Australia has no tradition of unilaterally imposing sanctions on foreign people who have committed gross human rights violations. Our focus has been on sanctioning other states, usually though the mechanisms of the UN, including its Human Rights Council. 

An Australian Magnitsky Act could remedy this shortcoming. The proposed International Human Rights and Corruption (Magnitsky Sanctions) Bill sought to give the Commonwealth government power to sanction foreign persons for gross violations of human rights or significant corruption. 

This is the Bill proposed by the now former MP, Michael Danby, which lapsed at the dissolution of parliament on April 11, 2019. 

Sergei Magnitsky was a Russian tax accountant, auditor and attorney. He was employed by the Moscow based law firm Firestone Duncan, whose clients included Hermitage Capital Management. 

He was investigating a $US230 million fraud involving Russian tax officials, and in the process was accused himself of fraud and taken into custody.  

Magnitsky died before his trial. He was refused medical treatment for gall stones and pancreatitis and it is alleged he was beaten while held by the Russian Federal Penitentiary Service. 

Magnitsky's friend and colleague, the American-born British financier, Bill Browder, who founded Hermitage Capital Management, lobbied the US administration for legislation that sought to sanction Russian officials thought to be involved in the Magnitsky's death. 

At the time, Hermitage was the largest foreign portfolio investor in Russia. 

The Sergei Magnitsky Rule of Law Accountability Act was passed into US law in 2012. It was extended to encompass corruption with the Global Magnitsky Human Rights Accountability Act in 2016.   

In the United Kingdom, Magnitsky-style laws are enacted by way of proceeds of crime and anti-money laundering legislation. 

Bill Browder has characterised sanctions imposed by Magnitsky laws as "the iPad for human rights advocacy" - a new technology for dealing with human rights abuses on a global scale.   

Browder: father of the Magnitsky movement 

There are various exceptions to the applications of these laws, including diplomatic immunity and where national security interests and international agreements prevail.

The Law Society of New South Wales recently canvassed these issues in a thought leadership forum, A Magnitsky Act for Australia - Human Rights Bombshell or Frankenstein's Monster?   

Emeritus Professor Graeme Gill, director of research development, department of government and international relations, University of Sydney, spoke of the political tussle Browder had with Russian Federation President Vladimir Putin.  

Gill thought that an Australian Magnitsky Act would need to be disentangled from the Russian experience. It should have a completely different name - without reference to Sergei Magnitsky.  

He suggested that an Australian Act should not mandate the taking of sanctions, otherwise the law may "weaponise human rights" in a way that "degrades human rights". 

Pauline Wright, president of NSW Council for Civil Liberties and former president of the Law Society of NSW identified six countries that have passed Magnitsky laws: the USA, the UK, Canada, Estonia, Lithuania, and Latvia (most recently, in 2018).  

She pointed to the case made by Geoffrey Robertson QC in an Australian Quarterly article, Oct-Dec 2018, Why Australia needs a Magnitsky Law.


Great deep dive on why Australia needs a Magnitsky Act by one of world's top human rights lawyers, Geoffrey Robertson QC and Australian activist @RummeryChris https://t.co/z2CjSTuzO2

— Bill Browder (@Billbrowder) September 29, 2018


Transparency is an important requirement for this sort of legislation. In the USA, there is administrative review by the Secretary to the Treasury, and appeal to the judiciary, though not for visa bans. 

In the UK, there is the ability to request a review by the Secretary of State, and judicial review, but the UK will not be liable unless shown to have acted in bad faith. In Canada, there is appeal to the Minister of Foreign Affairs, and a parliamentary annual review of "blacklisted" people.

Senator Kimberley Kitching (ALP Victoria), deputy manager of Opposition business in the Senate and shadow assistant minister for government accountability, told the forum that there is multi-party support for an Australian Magnitsky Act. 

The Greens, most of the cross-benchers and the Labor Party support Michael Danby's lapsed Bill. Kitching said that Australia needs to now "draw a line in the sand" and join with its Five Eyes partners to enact legislation. 

The next useful step should be an inquiry conducted by the Senate Standing Committee on Foreign Affairs, Defence and Trade. Senator Kitching specifically called out the Cambodian generals, who would be ideal candidates for sanctions under a Magnitsky Act - see the ABC's 4 Corners Champagne with Dictators

Jeremy Moller, senior advisor on risk at Norton Rose Fulbright Australia, cited justifications for promoting our own version of a Magnitsky law, including the downing of Flight MH17, the killings of Sergei Magnitsky and Jamal Khashoggi, the atrocities during the Syrian civil war, the systematic mistreatment of Rohinga, Uyghur, and Kurdish peoples, and extrajudicial executions in Venezuela.

Moller asked, "why not just rely on the existing Autonomous Sanctions Act for sanctioning individuals who have grossly violated human rights?". This Commonwealth legislation has never been reviewed by the government since it was enacted in 2011, and Geoffrey Robertson has called the legislation, "not fit for purpose".  

Moller pointed to the hurdles that any business would have with sanctions compliance from a risk management perspective. He likened sanctions compliance to delving into the onion-like nesting of Russian Matryoshka dolls.

Sanctions compliance and risk management

There were 18 individuals in the Russian Federation initially sanctioned with the US Magnitsky law. Currently, there are 111 persons sanctioned by the US Global Magnitsky laws. Moller did not name any third party business that had also been sanctioned by the US for dealings with any person on the blacklist. 

Magnitsky laws find their strength by being limited in scope. Reconsideration needs to be given to Danby's proposal that would see the relevant minister imposing immigration, trade sanctions or prescribed penalties by delegated legislation. 

There should be the safeguard of judicial determination in an Australian Magnitsky Act.  

Magnitsky laws are a useful non-military alternative to more aggressive political postures, and are an effective tool by which values can be driven home to those who might otherwise be beyond jurisdictional reach. 

The biographer A.N. Wilson, in his 2012 book Hitler, reminds us that politicians, having cast off from their moral frame of reference the more grotesque prejudices of early 20th century European fascism, are in fact its heirs. 

On August 27, the European Court of Human Rights at Strasbourg found that Magnitsky's incarceration, treatment in prison and death consitutued substantial violations of the Convention for the Protection of Human Rights and Fundamental Freedoms. The court awarded damages of 34,000 to Magnitsky's widow and mother. 

The full reasons of the court are here and a BBC report is here

Greg Hogan is an Australian lawyer, a chartered financial analyst, and a chartered alternative investment analyst. In 2004, he travelled overland across Russia from Irkutsk to St. Petersburg, and on through the Baltic republics of Estonia, Latvia, and Lithuania. In 2006, as a potential investor, he met with Hermitage Capital Management in London. He has extensive experience with global hedge fund investing. He has closely followed the Magnitsky human rights campaign waged by HCM's founder Bill Browder. 

Article originally appeared on Justinian: Australian legal magazine. News on lawyers and the law (http://justinian.com.au/).
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