The American Interest
Policy, Politics & Culture
What the Magnitsky Act Means
Published on December 18, 2012

Sergei Magnitsky was a 37-year-old lawyer who was beaten, deprived of vital medical attention, and left to die in a Russian prison nearly a year after uncovering a massive fraud allegedly committed by Russian officials to the tune of $230 million. The very people whom Magnitsky implicated in the fraud arrested him in 2008; a year after his murder, several of these officials were promoted and awarded, adding insult to the fatal injury inflicted on Magnitsky.

Magnitsky’s client, Hermitage Capital head Bill Browder, launched a full-court press to seek justice for his lawyer in the West in the absence of any possibility for justice inside Russia. Browder recounted Magnitsky’s riveting story to members of the U.S. Congress and anyone else who would listen. Fortunately, two Congressmen, Senator Ben Cardin (D–MD) and Representative Jim McGovern (D–MA), did listen, and they followed up by leading the campaign to adopt the Sergei Magnitsky Rule of Law Accountability Act, which was approved by the House in a 365–43 vote November 16, and by the Senate with an equally bipartisan landslide (92-4) on December 6. The Act will deny visas to and freeze the assets of those in the Russian ruling elite implicated in Magnitsky’s murder and other human rights violations and corruption. Various polls in Russia show support for the legislation by a ratio of more than two-to-one among those familiar with it. In targeting sanctions against corrupt and abusive Russian officials as opposed to the whole country, the Act resonates with the many Russians who are fed up with these kinds of problems in their country. The next critical step is to get European countries to adopt similar measures, which would have an even greater impact on those Russians who like to travel and do business in Europe.

There will likely be international ramifications to the approval of the Magnitsky Act —especially if it gets applied to other abusive officials elsewhere around the world; Senator Cardin strongly supports such an extension of the law’s reach. The Act is also bound to influence the Russian-American relationship—if not today, then in the future. If not implemented aggressively, the legislation risks ending up as yet another piece in the “Let’s Pretend” game that the West has long been playing with Russia and other authoritarian states. (Indeed some hope for this outcome.) This would expose the deep crisis affecting the Western world and signal a victory for the forces of authoritarian corruption seeking to demoralize Western society. The U.S. Congress must see to it that the Obama Administration implements the legislation in a serious manner.

To understand the significance of the Act, we have to see the “Magnitsky factor” in a broader historical and political context. During the Helsinki process of the early-to-mid-1970s, the West created a new foreign policy model of linkage between interests and values. While the West pursued this linkage inconsistently and often only rhetorically, it was recognized as the key principle of Western foreign policy doctrine. This recognition was reflected in the almost universal acceptance of the Helsinki Principles, according to which human rights are not merely the internal matter of a country. This principle is a key part of the OSCE and the European Council’s legal framework. It was translated into the philosophy of democracy promotion with the Western states and civic organizations that supported the building of democratic institutions (elections, parties, rule of law) in transition societies.

Regrettably, the Obama Administration announced early on in its reset policy with Russia that it was abandoning the notion of linkage between interests and values. This mistake essentially gave Putin a green light to engage in human rights abuses, secure in the knowledge that such actions would not affect the broader relationship. In passing the Magnitsky Act, Congress has fixed that mistake. Long before the Helsinki Accords, and consistent with them, the U.S. Congress approved the Jackson-Vanik amendment in 1974 to deprive countries of most favored nation trade status if they limited their citizens’ right to emigrate. The Magnitsky Act takes the premise behind Jackson-Vanik and updates it to apply it to today’s Russia.

The Old Ways of Dealing with Russia

Since the collapse of the USSR, Western policy toward Russia has gone through many zigs and zags. The West adopted the “Transformation through Integration” approach (promoting Russia’s transformation by moving it toward the West), which implied the West’s active cooperation in building Russian democratic institutions. As it became more evident that the Russian regime had little in common with liberal democracy, a modified model appeared, known as “Integration through Transformation” (integrating Russia with the West, but contingent on its transformation). But the essence of the model had not changed: The West still hoped that Russia would democratize, and it would participate in Russia’s democratization and integration into Europe.

These hopes were grounded in the erroneous assumption that Russia had started moving toward democracy in the 1990s. In fact, Russia was reviving the system of personalized power under the guise of liberal slogans. By describing the period of the 1990s as a time of democracy in Russia, when to most Russians it was a terrible and dislocating decade, and by openly supporting the new Kremlin one-man rule, Westerners wound up discrediting the notion of democracy in the eyes of many Russians. “If this is democracy,” they thought, “then we don’t want any!” The West was thus reduced to participation in the imitation of reforms in Russia. Many Russians began to view the West as cynically interested in Russia’s demoralization and degradation. Moreover, once the “collective” West embarked on this path, it couldn’t veer from it. No Western politician was willing to admit that the belief in Yeltsin and Putin (early in his rule) as democratic reformers was a mistake. Nor did anyone want to risk undermining the advantageous partnership with Russia on issues of economics and security.

The West’s imitation of a normative approach to Russia has had two consequences. First, it has tarnished the West’s reputation as a normative society both on the Russian stage and on the global one. Second, it has facilitated the exportation of corruption to the West (especially to European countries) from Russia and other post-Soviet states. Thus, a segment of Western society began to serve the interests of corrupt elements from authoritarian or “imitation democracy” states and, in so doing, impacted the Western countries’ foreign policies. Undermining the West from within through the exportation of corruption has been far more effective than the policies of confrontation and containment practiced by the Soviet Union.

Magnitsky as a Turning Point

The “Magnitsky factor” marks a turning point, since it allows for the possibility of solving the following problems:

  • restoring the primary role of a normative aspect in Western society by confronting the issue of normative imitation, external corruption and the demoralization of political elites in both Russia and the West;
  • undermining the sustainability of corrupt authoritarian regimes by limiting their external resources and hindering their elites’ personal integration into the West;
  • bringing back liberal democracy as an attractive alternative to the authoritarian model;
  • overcoming anti-Americanism and anti-Western sentiments in Russian and other societies that are now suspicious of the West and its agenda by standing up for principle.

The Magnitsky Act signifies an entirely different format of Western influence. It does not intend to influence the societies that live under authoritarian regimes (in most cases, these societies no longer need lectures on building democracy); it is aimed instead at the elites who use Western countries to secure their interests and their authoritarian regimes.

To be clear, Congress likely would not have passed the Magnitsky Act had it not been linked to the repeal of the Jackson-Vanik amendment and the granting of permanent normal trade relations (PNTR) with Russia. The American business community, motivated by the prospect of losing equal access to Russia’s markets once Russia became a member of the WTO, deserves credit for pushing on that front. Dropping opposition to Magnitsky was the only way for the American business lobbies to get PNTR, since a number of key members of Congress made it clear that they would not support PNTR without Magnitsky. Still, after the Senate vote, the business community focused its comments on the granting of PNTR status, which is understandable, in that most businesses are generally not interested in promoting democracy or human rights or imposing sanctions. Klaus Kleinfeld, Chairman and CEO of Alcoa and the Chairman of the U.S. Russia Business Council, had this to say: “We welcome today’s historic Senate action which provides the U.S. business community with the certainty and predictability it needs to compete in Russia’s growing market. Passage of Russia PNTR offers an important boost to U.S. businesses across sectors.”

For the Russian government, however, the repeal of the Jackson-Vanik amendment has long been a non-issue. In fact, it provided the Kremlin with a familiar and convenient excuse for its constant anti-Western harangues. It was the Magnitsky Act accompanying PNTR that came as an unwanted surprise for the Kremlin. Thus, even with PNTR, American companies may find rough sailing in Russia in the near term, as the Kremlin and its lackeys in the Duma vent their frustration over the Magnitsky legislation. Nonetheless, by linking economic interests to universal values, Congress turned a new page in the foreign policy textbook—albeit a page turned against the wishes of the Executive Branch. This indeed marks a new approach, both for the United States and the West as a whole.

As noted above, Russian society, and especially its most progressive segments, have overwhelmingly supported the Magnitsky Act. It also supported the lifting of Jackson-Vanik but was much more interested in seeing it replaced with Magnitsky. Russian internet users, who are usually quite suspicious of the U.S., reacted to the passage of the bill on the popular Echo Moskvy website as follows:

Of course, I doubt that that the American politicians sincerely care about Russia . . . but I can say one thing with certainty: the act WORKS. If we notice all the Kremlin’s hype around the law, it means THERE MUST BE A REASON. Then, these efforts are not IN VAIN, after all. Whatever names we are calling Americans and regardless of how we are treating them . . . this time they did a great job!

Here is one more posting on the same website:

Thank you, the U.S. Senate, for trying to deprive Putin’s gang of the reason to exist.

According to a recent Levada Center poll, 39 percent of Russians support the Magnitsky Act, an incredibly high level of support among the Russian public, who are usually reserved and even hostile toward the United States. Around 95.5 percent of listeners of Echo Moskvy (which, granted, has a largely liberal listenership) supported the Magnitsky Act, with only 4.5 percent against. Given the Kremlin’s relentless and negative propaganda campaign against the Act, these levels of support in Russia are nothing short of amazing.

However, for the “Magnitsky factor” to work, its practical application must be developed further. First and foremost, it has to be adopted in Europe as well, since Europe is the main recipient of Russia’s corrupt exports. Therefore, a Schengen Zone member of the EU should pass a similar law so that in effect all countries of the Schengen Agreement must abide by it. Passage in the UK, Norway and Canada would also send an important signal, but approval in the Schengen Zone would have the greatest impact.

At the same time, it is quite clear that “corruption donors” in Russia and other countries will take all necessary steps to block the new law and render it merely symbolic. “Baloney. It will change nothing,” as one Russian official put it, perhaps hoping that the White House, which has constantly voiced its disagreement with the law, will be able to thwart it. But, just in case, the Kremlin has already started to prepare “symmetric” and “asymmetric” measures to combat American human rights violations. The Russian Foreign Ministry had this to say right after the bill was approved:

The decision of the United States Senate following the House of Representatives of the United States approved the legislation, which under the false pretenses introduces the visa and financial sanctions against some Russian citizens, is the performance in the theater of the absurd. . . .

It looks like that behind ridiculously biased approach taken in the U.S. Congress there is only the vindictive desire to get even for principled, consistent line of Russia in world affairs in favor of strict adherence to international law. We have to reiterate hyperactive opponents of normal development of Russian-American relations: their efforts look pathetic. However, the Russian side will have to respond.

This statement is quintessentially Soviet, for the Soviet Union was great at accusing its opponents of the same things it was accused of. Perhaps, the statement’s authors failed to see its absurdity: They identify themselves with those responsible for a person’s death and show their readiness to protect Russian human rights violators at any cost.

On December 13, President Vladimir Putin blasted the Magnitsky Act as a “purely political, unfriendly act.” The Russian leader was apparently sincere when he said, “Frankly speaking, I don’t understand. This is most likely a domestic political intrigue. But I don’t understand why Russian-U.S. relations should be sacrificed for some domestic political gain.” The Russian leader definitely does not believe that Americans can include a normative dimension into their policy; he evidently thinks that Washington works within the same policy formula that he pursues, and the rest is simply “intrigue.” Apparently, thus far he has found no evidence to the contrary.

A natural question amidst all this froth arises: Why did the Kremlin allow the situation surrounding Magnitsky’s death to escalate to the point that the West felt it had to adopt sanctions against members of the Russian ruling elite? The Kremlin’s political shortsightedness is not the only culprit here. There is a more serious problem. The logic of personalized power does not allow the regime to display weakness. The regime cannot punish one if its own members; otherwise the principles of mutual loyalty and permissive connivance that consolidate Putin’s regime will being to crumble.

Right after the Act’s adoption, Moscow warned about restrictions on certain meat products from the United States. This constituted its first retaliatory step after the law was passed. The Russian Duma is endorsing its own version of the anti-Magnitsky law, carrying its own retaliatory measures: For example, it calls for American parents who adopt Russian children and abuse them to be banned from entering Russia, along with American officials guilty of abusing the human rights of Russian citizens, such as the notorious arms dealer Viktor Bout.

The reaction of the Kremlin and the ruling class to the Magnitsky Act is quite understandable. After all, some fear it will endanger their financial positions and their ability to remain connected to the West. Others, like the Communists, support retaliation against America to express their outrage at the very fact that the United States tries to exert pressure on the Russian elite. The irony of this is outstanding: The Communists and other elite groups known for their anti-American stances are in fact defending the right of the corrupt Russian elite to keep their assets in dollars and in U.S. banks!

The Magnitsky Act has its detractors in the West, as well among those who fear that the adoption of a new normative approach to foreign policy will complicate partnership with Russia on issues like Iran, Afghanistan, Syria, energy policy and so on. Staunch supporters of Kissingerian-style realpolitik will dismiss the normative approach as romantic dreaming. They believe that Western foreign policy should be a bargaining process or a “transactional relationship,” and that the internal politics of a country one is negotiating with should be put on the back burner. There are also those who are directly implicated in catering to Russia’s corrupt exports—banks, businesses, legal and political consultants, and companies engaged in PR for the Kremlin—who will work to make the Magnitsky Act irrelevant.

Incorporating the Magnitsky approach into the West’s foreign policy does make it more complex. The West will have to abandon its traditional methods and stereotypes and move on to a multi-step diplomacy that may not yield immediate results. But this is no loss: current Western diplomacy no longer involves strategic thinking. The West may boast of its tactical successes, but these come at the expense of strategic failures. The question is whether Western diplomacy will be able to move on to normative politics. The jury is still out on that, including among those in Russia who support passage of the Magnitsky Act.

Nonetheless, the overwhelming support for the Magnitsky Act in the U.S. Congress, the unanimous backing for similar legislation in the European Parliament this fall and in the Dutch Parliament last July, and a recent resolution in the German Bundestag speaking out for civil society and human rights in Russia suggest that the West is adjusting its approach and reviving a more normative role in dealings with the Kremlin.

As the last decade’s experience bears out, the realist approach to Russia has discredited the West in many Russians’ minds. The West lost its overall vision and foresight of political developments amid Russia’s turn toward authoritarianism and the spike in anti-American and anti-Western sentiments.

The coming year will be key to determining how systemic the change in approach by the West toward Russia will actually be. The “Magnitsky factor” offers some hope that the West will overcome its current malaise. And credit for that should go to people like Sergei Magnistky and those who seek justice for his death.

David J. Kramer, a former Assistant Secretary of State for Democracy, Human Rights and Labor, is president of Freedom House in Washington, DC. Lilia Shevtsova, an AI editorial board member, is senior fellow at the Carnegie Moscow Center.