Senate Finance Reports Measure on PNTR For Russia, Moldova; Magnitsky Act Included

Bloomberg BNA

Key Development: Magnitsky bill included, vote is unanimous.
Next Steps: Kirk, Baucus, Camp to meet July 19.

The Senate Finance Committee July 18 unanimously reported legislation designed to allow the president to grant permanent normal trade relations (PNTR) to Russia and Moldova.

The bill would also replace human rights sections of the Trade Act of 1974 with provisions, named after deceased tax attorney Sergei Magnitsky, targeting corrupt government officials in Russia and elsewhere.

In his opening remarks, Chairman Max Baucus (D-Mont.) noted that the measure will make permanent the normal trade relations the United States already has had with Russia for the past 20 years and should double U.S. exports to Russia in five years.

The opportunities for increased trade with Russia are related to the massive Eurasian country joining the World Trade Organization in August after a 19-year accession process. The upper house of the country’s legislature July 18 approved the WTO accession package (see related report).

Baucus said hundreds of companies and trade associations have come out in favor of PNTR, as well as U.S. and Russian Jewish groups, including the National Conference on Soviet Jewry and the American Israel Public Affairs Committee.

Section 402 of the Trade Act, the so-called Jackson-Vanik Amendment, requires an annual review of respect for emigration rights that was originally intended to support Jewish emigration from the former Soviet Union. The bill would terminate the application of this section along with the others in Title IV.

The annual review constitutes a condition according to WTO rules and is therefore at odds with the organization’s core principle of unconditional most favored nation (MFN) status, which is the term for PNTR used in international treaties. Absent MFN, Russia is not required to grant the terms of its accession package to the United States and U.S. companies.

Baucus noted that Moldova is the only WTO member with which the United States does not have permanent normal trade relations. “Like Russia,” Baucus said, “Moldova has allowed freedom of emigration for many years, and Moldova joined the WTO in 2001.”

Cardin Sees His Version Being Taken Up in House

The modified chairman’s mark that was reported by a 24-0 vote adds the Sergei Magnitsky Rule of Law Accountability Act of 2011, sponsored by Sen. Benjamin Cardin (D-Md.) as reported out of the Senate Committee on Foreign Relations on June 26 (123 ITD, 6/27/12). The bill has been described by lawmakers on both sides of the aisle as a replacement for Jackson-Vanik.

“Senator Cardin’s proposal to add the Magnitsky Rule of Law Accountability Act to the PNTR legislation will help fight human rights abuses in Russia,” Baucus said. “By enacting PNTR together with the Magnitsky bill, we are replacing Jackson-Vanik with legislation that addresses the corruption and accountability issues that Russia confronts today.”

Cardin told BNA after the hearing that the unanimous vote in the committee is a clear signal an expedited way can be found to get PNTR done. The Maryland lawmaker did not anticipate a problems arising around a Senate floor vote.

He said that his bill will likely be taken up by the House even though, unlike the House version—the Sergei Magnitsky Rule of Law Accountability Act of 2012 (H.R. 4405), which is Russia-specific—his version has a global scope.

Both Magnitsky bills would sanction with visa denials and asset freezes those linked to the 2009 death of a tax attorney while in the custody of Russian authorities and those tied to other gross violations of human rights.

“I think that there is going to be an effort made to get the House and Senate on the same wavelength on this issue,” Cardin said. “There is no possible way PNTR can pass without Magnitsky—actually Magnitsky is more popular than PNTR.”

He said that chairman Baucus and House Ways and Means Chairman Dave Camp (R-Mich.) have talked and understand the reality that Magnitsky is essential to moving PNTR.

Kirk to Meet July 19 With Baucus, Camp

U.S. Trade Representative Ron Kirk is scheduled to meet July 19 with Baucus and Camp, according to the week-ahead schedule from USTR. Kirk said in a statement after the vote that with Russia expected to join the WTO in a few short weeks, American exporters want to be first in line for business there.

“Granting permanent normal trade relations to Russia will ensure that American companies, workers, farmers, ranchers, manufacturers, innovators, and service providers access the full benefits of Russia’s WTO membership, and that they can use those benefits to support jobs here at home,” Kirk said. “Access to the dispute settlement process at the WTO is just as important. We applaud the Senate Finance Committee’s action today, and look forward to working with Congress to advance America’s interests with regard to Russia’s WTO accession as quickly as possible.”

Camp likewise welcomed in a statement the news that the Finance Committee was able to report bipartisan Russia PNTR legislation and said he will carefully study the bill once legislative text is available.

“I intend to have a bill introduced in the next few days and look forward to moving this important jobs bill through the committee on a bipartisan basis as soon as possible,” Camp said. “I continue to work with the White House to find a Democratic co-sponsor.”

In a statement released after the hearing, Baucus noted that Russia is the world’s seventh-largest economy and could surpass Germany and Japan by 2040. PNTR, he said, would allow additional market access for U.S. service providers; improved intellectual property enforcement; higher quotas for U.S. beef, poultry, and pork producers; decreased domestic agriculture subsidies; consistent science-based SPS measures; and new dispute settlement tools to enforce WTO rules.

Mark Includes Other Provisions

The mark also includes other provisions designed to address corruption issues in Russia, as well as to ensure that Russia complies with its WTO obligations and that the administration enforces them.

The proposal also requires the Office of the U.S. Trade Representative to report annually to the Senate Finance Committee and the House Ways and Means Committee on the Russia’s implementation of its obligations as a member of the WTO, in particular with respect to obligations relating to sanitary and phytosanitary (SPS) issues and intellectual property protection.

According to a description of the mark from the committee, the USTR’s report would also cover Russian progress on acceding to and implementing the WTO Information Technology Agreement (ITA) and the WTO Agreement on Government Procurement. Sen. Charles Schumer (D-N.Y.) said at the hearing that he withdrew his amendment regarding the ITA agreement as the reporting requirement was incorporated in the bill.

The committee descriptions said that to the extent the USTR believes that Russia is not fully implementing a WTO agreement or making adequate progress in acceding to the above agreements, the USTR would be required to include in the report its plans for addressing those situations.

“In preparing the report, the USTR must provide an opportunity for public comment, including by holding a public hearing,” the committee said.

USTR Would Have Reporting Requirements

The bill would also require the USTR to report within 180 days, and annually thereafter, to the Senate Finance Committee and the House Ways and Means Committee on enforcement actions taken by the USTR to ensure full compliance by Russia with its WTO obligations.

The measure would further require the USTR and the secretary of state to report annually on measures they have taken and results achieved to promote the rule of law in Russia and to support U.S. trade and investment by strengthening investor protections in Russia, including: • the negotiation of a new bilateral investment treaty; • advocating for U.S. investors in Russia, including by promoting the claims of U.S. investors in the Yukos Oil Co.; • encouraging all parties to the Organization for Economic Cooperation and Development Anti-Bribery Convention, including Russia, to fully implement their commitments; • promoting corruption-free customs, tax, and judicial authorities in Russia; and • increasing cooperation between the United States and Russia to expand the capacity for civil society organizations to monitor, investigate, and report on suspected incidents of corruption.

Corruption Hotline, Digital Trade, SPS

The proposal also requires the secretary of commerce to establish and maintain a hotline and secure website to allow U.S. entities to report instances of bribery and corruption in Russia that could affect them and to request U.S. assistance relating to corruption issues in Russia. An amendment offered by Sen. Jon Kyl (R-Ariz.) was adopted that would require the secretary of commerce to report on getting the anti-corruption hotline and website up and running.

“In addition,” the description said, “the proposal amends section 182 of the Trade Act of 1974 by requiring that the report under section 182 include a description of laws, policies, or practices of the Russian Federation that deny fair and equitable treatment to U.S. digital trade.”

The proposal also requires the USTR to pursue the reduction of Russian barriers to U.S. exports through efforts to negotiate a bilateral agreement with Russia that would recognize U.S. SPS measures as equivalent to Russian SPS measures.

Sen. Charles Grassley (R-Iowa) said at the hearing that a separate plant equivalency agreement should have been negotiated prior to Russia’s WTO accession, “but the administration hit the fast-forward button.”

The description said the measure would compel USTR to obtain Russian acceptance of an action plan to provide greater protections for intellectual property rights than those provided under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. онлайн займы микрозайм онлайн zp-pdl.com https://zp-pdl.com/emergency-payday-loans.php hairy women