March 2014

Why London turns a blind eye to Russia’s adventurism

The Guardian

Threats to Russia over its actions in Ukraine are undermined by the warm welcome its billionaires continue to receive in the west.

The kleptocracies that have replaced the old Soviet empire are vulnerable, I wrote on these pages as the Ukraine crisis began. The freezing of their assets was a non-violent response to the threat to the integrity of a sovereign state that had not committed genocide or developed weapons of mass destruction; that had not threatened to invade a neighbour or provided any other casus belli beyond having a revolution against a fantastically corrupt government.

We might have threatened Putin’s elite support and made his backers realise that they had to choose between supporting Russian adventurism or holding on to their loot. I believed we had a fair idea of what their choice would have been.

Russia is exposed. Putin’s central bank estimated that two-thirds of the $56bn moved out of Russia in 2012 might have been the proceeds of crimes, bribes to state officials and tax fraud. English bankers and lawyers, British and Dutch tax havens in the Caribbean, and estate agents in Mayfair, the Cote d’Azur and Manhattan launder the loot.

Never mind asset freezes and visa bans; a vigorous investigation into immoral earnings by the European and north American authorities would have spread panic among the crime bosses. David Cameron sniffed weakness. He warned Moscow at the beginning of March that Russia would pay “significant costs” if it did not back down.

The crisis escalates today as Crimea votes on an anschluss with Russia under the eyes of Putin’s troops. The failure to date to impose sanctions on or make believable threats against Russian assets tells us much about Britain and the wider west, none of it flattering.

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March 2014

How U.S. sanctions hope to strike at Putin’s allies without actually targeting Putin

Washington Post

On Monday, President Obama released a list of individuals sanctioned for their involvement in Crimea’s vote to join the Russian Federation. Of the 10 names on the list, seven are Russian.

One person, however, was notable by his absence: Russian President Vladimir Putin.

While Putin’s name appears three times in the list, U.S. officials have explained that it would be “extraordinary” for them to target a head of state in such a case, despite calls to do so from people such as Bill Browder, one of the key supporters of the Magnitsky Act.

The list does strike at Putin, however, by targeting some of his key allies. These people may not be household names in the United States or Western Europe, but they hold real power in Russia, which may not be apparent from the one-line descriptions given by the White House.

For starters, there’s Vladislav Surkov, described as a presidential aide to Putin. Surkov is notorious in Russia-watching circles as the theater director who later became a PR man for Mikhail Khodorkovsky. He eventually came to the Kremlin and used his understanding of publicity and image to help sustain and strengthen Putin’s presidency, with some even suggesting that he was the real power behind the throne. He was called “Putin’s Rasputin” in the London Review of Books, and the “Gray Cardinal” by many others. While he apparently fell out of favor after anti-Putin protests in 2012, he was brought back last fall to help deal with Ukraine and other situations.

Then there’s Sergei Glazyev, once a fierce critic of Putin and even a rival to his presidency, who was brought into the president’s fold in 2012, and is described as a “Presidential Adviser to Russian President Vladimir Putin.” Glazyev was tasked with developing the Customs Union between Russia, Belarus and Kazakhstan, a precursor to the “Eurasian Union” that is said to be close to Putin’s heart. It had been hoped that Ukraine might join the Customs Union, and Glazyev had acted as Putin’s main emissary to the country over 2013. He had issued a number of warnings to Ukrainians as the Euromaidan protests progressed.

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March 2014

Time for the Magnitsky Act

National Review Online

When it comes to Ukraine, the United States and European Union are stuck between a rock and a hard place. Russian troops are hunkering down in the recently occupied Crimean peninsula, showing no signs of retreat. The West, wary of involvement — especially military involvement — in yet another international conflict, has confined its rhetoric to talk of “costs” and economic sanctions.

One weapon in the United States’ economic arsenal is the 2012 Magnitsky Act, which allows the administration to sanction individual Russians. In particular, the law was aimed at those who were responsible for the detention, abuse, and death of Sergei Magnitsky, a Russian accountant and auditor. Magnitsky was tortured and murdered after accusing Russian officials of corruption and theft of taxpayer funds. Under the act, the Obama administration could target individuals by freezing their assets held in the United States and denying them visas.

This individualized pressure could be coupled with sanctions against the entirety of Russia, further pressuring Russian leaders to remove troops from Crimea.

The Obama administration opposed its passage in 2012, when it was approved with bipartisan supermajorities in both houses of Congress. Now, however, the law is one of the few weapons the American government is potentially willing to use against Russia.

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March 2014

Put 32 Russian officials on an EU „Magnitsky list”, urge Foreign Affairs MEPs

European Parliament News

The EU should ban visas and freeze the EU assets of 32 Russian officials involved in the case of Russian lawyer Sergei Magnitsky, said the Foreign Affairs Committee in a resolution voted on Tuesday. Mr Magnitsky died in pre-trial detention in 2009, after allegedly having been tortured and deprived of medical care. The resolution names the officials.

The EU Council should draw up a common list of officials believed to be responsible for the torture and death of Russian lawyer Sergei Magnitsky, for its judicial cover-up and for continuing harassment of his mother and widow.

These officials should be banned from travelling in all EU countries and their financial assets held in the EU should be seized, say MEPs in a resolution drafted by Kristiina OJULAND (ALDE, EE) and adopted by 53 votes in favour, 1 against and 2 abstentions.

MEPs refer to independent investigations which found Mr Magnitsky was subjected to „inhumane conditions, deliberate neglect and torture” and point to the need for a joint and firm EU policy towards Russia. They also call on Russia to close the posthumous trial against Mr Magnitsky.

MEPs criticise the EU’s High Representative for Foreign Affairs Catherine Ashton for failing to place the issue on the Foreign Affairs Council agenda, despite the European Parliament’s October 2012 request that she should do so.

The list

MEPs ask that the following Russian officials, amongst others, be placed on the list:

GAUS, Alexandra
GRIN, Victor
KLYUEV, Dmitry
KOMNOV, Dmitriy
PAVLOV, Andrey
PONOMAREV, Konstantin
PROKOPENKO, Ivan Pavlovitch
TAGIEV, Fikhret

Sixteen of the officials on this list have already been prohibited from entering the United States or using its banking system, by the US “Magnitsky bill”. MEPs suggest 16 additional names of officials which are involved in Mr Magnitsky’s posthumous trial.

At the same time, they stress that the list should be revised regularly and urge Russia to undertake a credible investigation into Mr Magnitsky’s death and bring those responsible to justice.

Next steps

The “Magnitsky list” recommendation has yet to be backed by the full House on April plenary (tbc).

The decision for establishing such a list should be taken by the EU Council.

In chair: Elmar Brok

Procedure: Non-legislative resolution

REF. : 20140317IPR39115

March 2014

European Parliament Committee Backs Magnitsky Sanctions

Radio Free Europe

The European Parliament’s Foreign Affairs Committee has proposed that 32 Russian officials be sanctioned by the EU due to their involvement in the death of Russian whistle-blowing lawyer Sergei Magnitsky.

The European Parliament had previously called on EU member states to emulate the United States’ so-called Magnitsky List and freeze assets and impose visa bans on Russian officials, but certain European countries have blocked any such move.

However, after the March 17 decision by EU foreign ministers to sanction 13 Russian officials and an additional eight Crimeans for their roles in the crisis in Ukraine, there are hopes that EU member states might change their minds.

It is also the first time the European Parliament has presented the names of those they want punished.

The whole European Parliament is expected to overwhelmingly endorse the proposal during its April plenary.

March 2014

A European Magnitsky List

Wall Street Journal

The Foreign Affairs Committee of the European Parliament voted on Tuesday to sanction 32 Russian officials involved in the persecution of Sergei Magnitsky, the Moscow lawyer who died in custody in 2009 after exposing official graft. The legislation follows America’s 2012 Magnitsky Act that currently targets 18 officials. When the European Parliament convenes in April, passage would send a signal that Russia’s neighbors will no longer ignore the nature of the Putin regime.

The bill would require all EU states to impose a “visa ban on these officials and to freeze any financial assets that they, or their immediate family, may hold within the European Union.” Among them are a number of Interior Ministry officers, including Oleg Logunov, who as head of the legal department of the ministry’s investigative committee was instrumental in Magnitsky’s unlawful detention. Also included is Igor Alisov, the judge who presided over Magnitsky’s Kafkaesque posthumous “tax-evasion” trial, and who read a “guilty” verdict to an empty defendant’s cage in 2013.

Europe may be tardy in targeting Magnitsky’s killers, but the Obama Administration’s record is worse. It first tried to kill the Magnitsky Act and then tried to water it down. An overwhelming majority in Congress from both parties forced the law on President Obama. Vladimir Putin retaliated by putting U.S. officials on a sanctions list of his own, and he even stopped Americans from adopting Russian orphans.

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March 2014

Ros-Lehtinen, McGovern Pen Letter to President Obama Urging Russian Officials be Added to Magnitsky List

Congresswoman Ileana Ros-Lehtinen

U.S. Rep. Ileana Ros-Lehtinen (R-FL), Chairman of the Middle East and North Africa Subcommittee, joined by Rep. Jim McGovern (D-MA), Co-Chairman of the Tom Lantos Human Rights Commission, today sent a letter to President Obama asking for the Administration to add names of Russian officials responsible for human rights abuses to the Magnitsky list. The Magnitsky list was established in 2012, when the President signed the Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act into law, and was named after Russian lawyer, Sergei Magnitsky who was imprisoned by Russian authorities after he began investigating a large fraud scheme that involved Russian tax officials. Magnitsky was thrown into the notorious Butyrka prison where he was held for over 11 months without trial and was beaten, tortured and denied much needed medical treatment and subsequently died in custody as a result of his harsh treatment.

Statement by Ros-Lehtinen:

“Putin and his officials have grown increasingly brazen with their attempts to silence dissent and with their human rights abuses against those in Russia who try to shine a light on the corruption of the state, yet the Administration has hesitated to take action despite having received several names to be added to the Magnitsky list. No names have been added to this list since April 2013, and that sends a message to the Kremlin that it can continue to violate the rights of the Russian people and the United States will sit by and take no action. I thank Jim and I are happy to join forces in urging the President to use the full intent and scope of the Magnitsky list to promote human rights in Russia, and we hope he will add more names to the list.”

Statement by McGovern:

“The Magnitsky Act can be an important tool in the effort to promote human rights – but only if the Administration uses it,” Rep. McGovern said. “I am proud to join with my colleague Ileana Ros-Lehtinen in this bipartisan effort, and I look forward to the Administration’s response.”

To read the letter, please click here.

For the list of names Reps. Ros-Lehtinen and McGovern submitted, please click here.

March 2014

Why Russia No Longer Fears the West


The West is blinking in disbelief – Vladimir Putin just invaded Ukraine. German diplomats, French Eurocrats and American pundits are all stunned. Why has Russia chosen to gamble its trillion-dollar ties with the West?

Western leaders are stunned because they haven’t realized Russia’s owners no longer respect Europeans the way they once did after the Cold War. Russia thinks the West is no longer a crusading alliance. Russia thinks the West is now all about the money.

Putin’s henchmen know this personally. Russia’s rulers have been buying up Europe for years. They have mansions and luxury flats from London’s West End to France’s Cote d’Azure. Their children are safe at British boarding and Swiss finishing schools. And their money is squirrelled away in Austrian banks and British tax havens.

Putin’s inner circle no longer fear the European establishment. They once imagined them all in MI6. Now they know better. They have seen firsthand how obsequious Western aristocrats and corporate tycoons suddenly turn when their billions come into play. They now view them as hypocrites—the same European elites who help them hide their fortunes.

Once Russia’s powerful listened when European embassies issued statements denouncing the baroque corruption of Russian state companies. But no more. Because they know full well it is European bankers, businessmen and lawyers who do the dirty work for them placing the proceeds of corruption in hideouts from the Dutch Antilles to the British Virgin Islands.

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March 2014

Ukraine crisis: Russia is in no position to fight a new cold war

Financial Times

Putin and his allies have talked tough while enjoying the comforts of globalisation.

When the Soviet Union invaded Czechoslovakia in 1968, the Moscow stock market did not crash. That is because there was no Moscow stock market. By contrast, the news that Russian troops have taken effective control of Crimea was greeted, on Monday, by a 10 per cent collapse in shares on the Russian market.

This contrast between 1968 and now underlines why talk of a new cold war is misleading. The economic and political context of Crimea in 2014 is entirely different from Czechoslovakia in 1968. Russia no longer has an empire extending all the way to Berlin. The pain of that territorial loss is part of the reason why President Vladimir Putin is fighting so hard to keep Ukraine in Moscow’s much-diminished sphere of influence.

Just as important, the world is no longer divided into two mutually exclusive, and hostile, political and economic systems – a capitalist west and a communist east. After the collapse of the Soviet system, Russia joined the global, capitalist order. The financial, business and social systems of Russia and the west are now deeply intertwined. A new east-west struggle is certainly under way today but it is being fought on entirely different terrain from the cold war – and under different rules.

The Kremlin may assume that the west’s business dealings with Russia work in its favour. President Putin, the former KGB agent, probably still believes the old Soviet maxim that western foreign policy is dictated by capitalists – who will not allow their financial interests in Russia to be endangered. The west’s supine reaction to the Russian military intervention in Georgia in 2008 may have strengthened this impression. Ben Judah, author of a recent book on Russia, argues that the eagerness of western business people and former politicians to do business with Russia has made Mr Putin “very confident that European elites are more concerned about making money than standing up to him”.

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