The American Interest
Policy, Politics & Culture
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The Problem with the Magnitsky Bill
Published on April 23, 2012

Russia’s accession to the World Trade Organization has created a quandary for Congress. On the one hand, members want to respect WTO rules and allow free trade with Russia, thereby further integrating that country into the world economy. On the other hand, many in the policymaking community have concerns over the Russian government’s human-rights record and do not want, in effect, to reward an undeserving Moscow with unfettered access to American markets. For this reason, Congress has yet to repeal the 1975 Jackson-Vanik amendment, which stipulates that the United States cannot grant Permanent Normal Trade Relations to non-market economies that restrict emigration, a practice the Soviet Union once engaged in. The Soviet Union disappeared in 1991, and Russia long ago removed all impediments to citizens who wish to leave the country, but Congress has kept Jackson-Vanik in place, hoping to use it as leverage with the Russian government. As a result, the United States cannot engage in unrestricted trade with Russia, and Russia, of course, is responding in kind by limiting American access to its markets.

Congress, though, seems to have found a way out of this impasse by swapping one piece of human-rights legislation for another: Several leading members of Congress have said they would vote to repeal Jackson-Vanik if the so-called Magnitsky Bill is passed. This bill seeks to bar from the United States, and freeze the assets of, Russian officials responsible for the November 2010 death of lawyer Sergey Magnitsky and for “other gross violations of human rights.” Magnitsky was investigating tax fraud by Russian officials, who in turn apparently sought to silence him by charging him with fraud, locking him up in pre-trial detention and denying him medical attention that likely would have saved his life. Magnitsky’s death sparked international outrage, and the Magnistky Bill is Congress’s attempt to hold the guilty parties responsible. By substituting the Magnitsky Act for Jackson-Vanik, the United States would seem to accomplish both its goals: getting free trade with Russia and keeping up the pressure on the Kremlin to respect human rights.           

The Magnitsky Bill, however, is very unlikely to improve human rights in Russia, and it is also reflective of a broader problem affecting U.S. foreign policy: an impulse to engage in self-righteous posturing rather than in crafting serious strategy. The problems the bill aims to address, corruption and abuse in Russia’s criminal justice system, are far too entrenched and lucrative to those involved to be seriously impacted by denying officials entry to Western countries or access to their Western bank accounts. U.S. Ambassador to Russia Michael McFaul, himself a vocal proponent of American democracy promotion in the former Soviet Union, opposes the Magnitsky Bill, claiming that it is redundant to steps the State Department has already taken to bar officials responsible for Magnitsky’s death from the United States. The Administration’s resistance to the legislation is understandable. The law would tie its hands in its dealings with Russia and make what is already a contentious bilateral relationship that much worse—all while doing nothing to actually improve human rights in Russia.

In truth, though, further deterioration of relations with Russia would mean little to most in Washington. This is the bigger problem that initiatives such as the Magnitsky Bill reflect. Since the end of the Cold War, Russia has not asserted itself as a power to be reckoned with, as China has done, nor has it democratized and integrated itself into Euro-Atlantic political and economic structures, as the countries of Central Europe have done. Russia’s lack of hard power and its failure to cooperate more closely with the West leaves American policymakers without a clear agenda for dealing with it. Many in the United States are disappointed with Russia’s failure to democratize, but few take Russia seriously as an economic or military force. This disappointment produces impulses to correct the course of Russian politics, and Russia’s seeming insignificance means there is little to check these impulses.

This approach to Russia stands in sharp contrast to the one Congress has taken to the other formerly communist nuclear power that Jackson-Vanik covered: China. Congress lifted all Jackson-Vanik restrictions on trade with China before it joined the WTO in 2001 and did not find it necessary to replace them with other measures to ensure that Beijing observed human rights. Obviously, this was not because there were no concerns over how China treats its citizens, but because economic relations with China were simply too important to make them hostage to human rights concerns. The volume of U.S. trade with China is about 16 times larger than U.S. trade with Russia and China’s U.S. Treasury securities holdings are nearly ten times larger than Russia’s. When one weighs China’s and Russia’s human rights records against their relative importance to the U.S. economy, it is hard not to conclude that Congress is ready to push for human rights abroad only when no real interests are at stake.

That human rights promotion is at best a secondary consideration for the United States is reflected by the Magnitsky Bill itself, which includes so-called “waivers for national interest.” These waivers stipulate that the Administration can allow Russian officials guilty of human rights abuses into the country or have their assets unfrozen if it deems that doing so is in the national interest. In a similar vein, while the Obama Administration is lobbying to make the bill’s rules apply to all countries and not just Russia (and thereby lessen tensions with Moscow) unnamed congressional aides told Foreign Policy that such an expansion might be problematic, as it could create conflicts with some foreign governments. In other words, while there are countries where the U.S. Congress sees promoting human rights as a secondary consideration to maintaining good relations with their governments, Russia is not one of them.

Of course America’s inconsistency in its promotion of human rights abroad is not, by itself, a reason to never promote them; perhaps if the Magnitsky Bill had a real chance of accomplishing its stated aims, one could support it despite its being redundant and self-contradictory. But the truth of the matter is that the bill has no real chance of reducing corruption or human rights abuses in Russia’s criminal justice system. In fact, those who believe it does have such a chance  are actually underestimating the scope of the problem. Corruption in Russia is not just a matter of a handful of unscrupulous bureaucrats misusing their posts; it is a mainstay of the economy. According to Moscow’s INDEM think tank, Russian businesses paid about $462 billion in bribes in 2010, which is around 31 percent of the country’s gross domestic product.1 With this much money available to officials through graft, it is not surprising that, according to a 2010 poll conducted by the Public Opinion Foundation, more than half of Russians aged 18–30 want to pursue careers in civil service. President Dmitry Medvedev himself said that these numbers showed young people were looking to become bureaucrats because, despite low official salaries, this career was “a way to get rich quickly”, and that this was “very disturbing.”

As these comments suggest, Russia’s leaders are aware of the corruption engulfing government agencies. Medvedev devoted much of his time as President to passing anti-corruption measures and reforming the police force. Magnitsky’s death, in fact, was a catalyst for some of these reforms. About a month after the lawyer died Medvedev proposed changes to the law that would prevent the police from keeping people accused of financial crimes in pretrial detention, thereby removing officials’ primary tool for pressuring and extorting business figures. This measure was passed into law, but, like all of Medvedev’s efforts to reduce government abuse and corruption, it proved to be more cosmetic than real and failed to change fundamentally how law enforcement functions in Russia. Those responsible for Magnitsky’s death remain unpunished and Russian law enforcement continues to churn out grim stories of abuse on a near daily basis. The country’s leaders may realize how serious the corruption problem is and they may want to change it, but they have not shown any willingness to go after the problem aggressively.

Part of the reason for their hesitancy to tackle corruption earnestly is that they or people close to them benefit from it. There is evidence, for example, that top officials have been shielding the perpetrators in the Magnitsky case and allowing them to engage in theft of budget funds on a massive scale. The larger impediment to a real anticorruption campaign, though, is that corruption is so central to how law enforcement agencies work in Russia, and these agencies are so essential to how the Putin regime exercises power, that if the leadership did truly tackle the problem, it would find itself in a serious fight with a key constituency.

At some point the Russian people’s outrage with this corruption may prove sufficient to force the leadership to do something about it. In large part, anger over corruption motivated the recent anti-Putin street protests, but the long term prospects for this sort of bottom-up change are unclear. What is clear is that publicly barring officials from the United States or freezing their assets will not be sufficient incentive for Russia to crack down on abuses by law enforcement.

The Magnitsky Bill’s backers point to the fact that corrupt Russian officials like to travel and keep their money abroad as evidence that denying them these privileges will make them less corrupt. But these arguments miss the rather obvious point that if these officials did not engage in this corruption, they would also be effectively barred from Western banks and trips abroad not by American laws but by the fact that they could never afford such luxuries on their meager official salaries in the first place. These arguments also miss the point that, however irritated Russia’s leaders may be with the Magnitsky Bill, its sanctions are nowhere near sufficient to get them to take on their own security services.

Those who whish to see human rights as cornerstone of U.S. foreign policy may respond that we should have even tougher measures than the Magnitsky Bill that are applied more braodly. But aside from the question of whether or not this would be desirable, the U.S. relationship with China shows that it is impossible. Even the United States is not immune to the need to pursue its material interests. This only appears to not be the case when, as with the relationship with Russia, there appear to be no real interests at stake. Russia’s lack of integration into American-led international institutions, its apparently knee-jerk opposition to many Western initiatives and its relative lack of economic or military power may make it hard to see how or why the United States should engage with it. Should the perception in Washington of Russia’s importance to the United States change, one can be fairly sure measures such as the Magnitsky Bill will fall by the wayside.

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1INDEM calculates this to be 42 percent of GDP. However, according to World Bank data, $462 billion would only be 31 percent of Russia’s $1.48 trillion GDP.

Raymond Sontag received his doctorate in politics from the University of Oxford in 2011. He previously served as the program officer for the National Democratic Institute's political party program in Moscow.