Who was Sergei Magnitsky?

Sergei Magnitsky, whose name is associated with laws implemented to impose sanctions on abusers of human rights, was a Russian tax advisor who died in police custody in 2009. He was arrested and charged on allegations of tax evasion after accusing Russian tax officials of defrauding Hermitage Capital Management, an investment firm he was advising. It is thought that these allegations were without merit and used as a punishment for his testifying against corrupt officials. During his time in custody, he was refused medical treatment and there is evidence to suggest he was beaten. Mr. William Browder, the co-founder of Hermitage Capital, has been at the forefront of the campaign for states to adopt legislation sanctioning those involved in Mr. Magnitsky’s death, and others considered to have breached fundamental human rights. He recognised the difficulty in achieving justice in either the domestic courts or international courts in cases such as this, and the concern that those responsible would continue to act with impunity.

The US Magnitsky Act

Mr. Browder began his campaign in the US and, in 2012 a bi-partisan bill was passed into law designed to punish those who had been involved in the death and mistreatment of Magnitsky. This focused on sanctions against named individuals including banning entry into the US, freezing their assets and prohibiting their use of US banking facilities. While this may have begun with the focus on the Magnitsky case, the potential expansion of this legislation was soon realised in the passing of further laws to sanction others seen as human rights abusers anywhere in the world.

The UK Magnitsky Act

It was announced on 6^th July 2020 that the UK was to impose sanctions on 49 named individuals including those implicated in the deaths of Magnitsky and Saudi journalist Jamal Khashoggi in 2018. It is expected that more names will follow. Mr. Browder stated in interview that, sanctions from the UK have particular cultural clout due to the desires of many wealthy individuals from overseas to have a ‘house in Belgravia’ or send their children to British boarding schools.

The new sanctions’ regime arising from The Global Human Rights Sanctions Regulations 2020 allows for Magnitsky-style sanctions such as the imposition of travel bans and asset freezes against listed individuals. Sanctions can be imposed against so-called ‘Designated Persons’ which are those that the Secretary of State deems are or have been ‘involved’ in an activity which, if carried out by or on behalf of a state within the territory of that state would amount to a serious violation of an individual’s:

a) Right to life

b) Right not to be subjected to torture or cruel, inhuman or degrading treatment or punishment

c) Right to be free from slavery, not to be held in servitude or required to perform forced or compulsory labour

In this regulation an “involved person” means a person who—

a) is or has been involved in an activity falling within regulation 4(2),

b) is owned or controlled directly or indirectly (within the meaning of regulation7) by a person who is or has been so involved,

c) is acting on behalf of or at the direction of a person who is or has been so involved, or

d) is a member of, or associated with, a person who is or has been so involved.

This is the most recent legislative development following May 2018, when the UK passed the Sanctions and Anti-Money Laundering Act made necessary by the EU referendum decision to ensure that the UK’s international obligations were upheld. This enabled the government to impose a variety of sanctions in the areas of finance, immigration, trade, aircraft and shipping. Prior to this, there had been the amendment to the Proceeds of Crime Act 2002 by virtue of s.13 of the Criminal Finances Act 2017 which inserted ‘gross human rights abuse or violation’ into the meaning of ‘unlawful conduct.’ The focus previously having been on money-laundering and financial crime, now seems to have shifted to implementing Magnitsky-style sanctions against those implicated in human rights abuses.

Comment

The significance of the new sanctions’ regime is in its potential. This marks the first time the UK has acted unilaterally in implementing such a scheme following its withdrawal from the European Union. It plays an important role reputationally as the UK is seen to be taking action to defend human rights. Nevertheless, the power of such sanctions is in their collective application, and the need for other countries to adopt similar measures. Politically this may prove difficult particularly in reaching a consensus across the member states of the EU, some of whom may find that individuals in states to whom they are allied would be targeted. Further observations of the regulations include the broad discretion to delegate, which is likely to give rise to legal challenge in the future, but also the fact that the legislation focusses on individuals rather than states meaning it has the potential to prove a targeted diplomatic tool.

This summary on the Magnitsky Act in the UK was written by Siân Beaven,  for further information on Siân’s practice please contact Tony George via our switchboard on 01962 868161 or via email: t.george@pumpcourtchambers.com