Canada, like US, names anti-corruption bill for Magnitsky, draws Russian rebuke

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17 July 2017. By Robert Thomason.

The Canadian Parliament is considering legislation similar to the US Global Magnitksy Act, which places sanctions on corrupt foreign officials and human rights abusers. The Canadian proposal, like its US counterpart, is opposed by the Putin administration as an attack on Russia.

Canada's Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) does not single out Russian nationals for sanctions, but proposes sanctions for any offending nationality. However, the bill's preamble details Magnitsky's death during Russian detention. The bill as a whole has drawn a strong rebuke from Russia.

"We are compelled to warn official Ottawa that we consider its strong support for a Canadian version of the US Magnitsky Act, as a means to make unsubstantiated human rights claims against Russia, to be another openly hostile move," the Russian foreign ministry said of the bill, designated as S-226. "Should the Canadian parliament approve this punitive legal act, it would seriously damage relations between our countries, which are not experiencing the best of times already."

Magnitsky was a Russian lawyer who, after exposing a $230 million tax fraud in Russia, was imprisoned on charges that he, himself, participated in the fraud. He died in Russian custody in 2009.

Russia's response to the Canadian legislation was similar to its opposition to two US laws. The US Congress in 2012 passed the Magnitsky Human Rights Accountability Act specifically sanctioning Russians held responsible for his death. Last year it named a broad anti-corruption sanctions act, the Global Magnitsky Act, after him. Natalia Veselnitskaya, the Russian lawyer who met with Donald Trump Jr. and Paul Manafort in June 2016, has been active in Russia's lobbying against the US laws.

"The Russian Embassy in Ottawa has spoken out against Bill S-226," said James Bezan, the member of Canada's House of Commons who introduced the bill in that chamber. "However, the Bill has been supported by Canadians across the country and has been championed by Canadians including the diaspora of Ukrainian, Russian, Vietnamese, Chinese, and Iranian [descent]."

S-226 passed the Canadian Senate in April. It was recently reported favorably by a House of Commons committee and is due for its final reading in the House of Commons later this year. If it passes its third reading, the Senate would take it up again to resolve amendments.

The Canadian bill's provisions track those of the US Global Magnitsky Act. In Canada, the government would determine whether a foreign official of any nation has engaged in significant acts of corruption or has violated internationally recognized human rights. Upon such a finding, the government would ban transactions from the country's financial system and deny sanctioned persons entry into Canada.

The US Global Magnitsky Act does the same in the US for foreign officials whom the president has designated as being in violation of the act.

The Trump administration this spring sent Congress an interim report under the new Global Magnitsky Act, but no sanctions were reported. US annual reports, due each Dec. 10 on United Nations "Human Rights Day," will disclose who has been sanctioned.

The Canadian bill also requires an annual report to Parliament, though the date is not specified, and also says that lawmakers are to be notified within 15 days after the issuance of an order sanctioning a corrupt official.

Another difference between the US Global Magnitsky Act and the Canadian proposal is that the US law specifically authorizes high ranking members of certain Congressional committees to recommend names of foreign officials and their associates whom they believe to be eligible for sanctions, and requires the executive branch to report back to the legislators on the status of those recommendations.

The US Departments of State, Treasury and Justice are developing standards under which each will review information and contribute to designation decisions, a government official told MLex. The US government would be open to information from any source, but that the bar for imposing sanctions would be high, the official said, and more weight would be given to information that is independently verifiable and that comes from multiple sources.

Recurring acts of corruption would more likely draw sanctions than isolated cases, the official said. The focus would be on cases of corruption that have occurred in the last three to five years.

Dedicated e-mail addresses have been set up to provide information: globalmagnitsky@state.gov for the State Department and glomag@treasury.gov for the Treasury Department.

The administration has met with civil society groups to discuss how they could put forward information. At least one major non-governmental organization engaged in anticorruption work is waiting to see how the law will play out.

"It remains to be seen what the government means by 'significant corruption,' " said Stefanie Ostfeld, deputy head of the US office of Global Witness, an anticorruption NGO.

Global Witness frequently issues reports on corruption, particularly in resource-rich countries with poor populations. These reports, such as a recent one on Nigerian oil sector corruption, may provide evidence that would inform the process of designating an official for sanctions, Ostfeld said, but added the State Department would want to do its own verification of any information it receives.

	Eliot Gao