Why the EU needs a Magnitsky act
The European Union should show that it is prepared to act against human-rights abuses in Russia
If there is one thing that truly alarms the Russian elite, it is the prospect of being denied access to their European villas and Europe’s shops. Indeed, within hours of returning to the presidency last May Vladimir Putin passed an executive order pointedly prioritising the fight against “unilateral extraterritorial sanctions” against Russian “legal entities and individuals”.
Although he did not mention Sergei Magnitsky by name, Putin’s move was an unambiguous reference to the threat of targeted sanctions against the Russian officials identified as having played a role in the detention, torture and death of Magnitsky, a lawyer who uncovered the embezzlement of $230 million (€180m) of state money.
Putin’s executive order specifically mentioned the United States. Undeterred, seven months later Congress passed the Justice for Sergei Magnitsky Act, which imposes a travel ban and asset freeze on those who were involved in the events that led to Magnitsky’s death.
Russia’s reaction was furious, expressed most evidently in a hastily adopted law banning the adoption of Russian children by US citizens.
Imagine, then, how much harsher Russia’s reaction would have been if that legislation had been passed by the European Union. For Russians, Europe is closer physically, and more significant economically than the US. Europe’s fashion, private schools and, increasingly, the certainties of its legal systems and free societies are profoundly attractive to wealthy Russians.
But the probability of a tough reaction should not dissuade the EU from doing what it should. Russia has been allowed for too long to lead and manipulate its relationship with the EU.
A European Magnitsky list would be a powerful sign of solidarity with Magnitsky’s family, and a carefully targeted affirmation of European values.
But the EU could go further still. Last October, the European Parliament voted in favour of a recommendation that called for sanctions not just against those who connived in Magnitsky’s death, but also for similar measures against those thought to be responsible for other serious human-rights violations.
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U.S. debates how severely to penalize Russia in human rights spat
In a controversy underscoring continued stresses in U.S.-Russia relations, Obama administration officials are debating how many Russian officials to ban from the United States under a new law meant to penalize Moscow for alleged human rights abuses.
The debate’s outcome, expected in about two weeks, is likely to illustrate how President Barack Obama will handle what critics say is a crackdown on dissent in Russia and set the tone for Washington-Moscow relations in the president’s second term.
The new law is named for Russian whistleblower Sergei Magnitsky, a 37-year-old anti-corruption lawyer who died in his jail cell in 2009. It requires the United States to deny visas and freeze the U.S. financial assets of Russians linked to the case, or to other alleged violations of human rights in Russia.
The act was passed in December as part of a broader bill to expand U.S. trade with Russia, and Obama signed it December 14. But the White House was never keen on the rights legislation, arguing that it was unnecessary because Washington had imposed visa restrictions on some Russians thought to have played a role in Magnitsky’s death. The United States has declined to name those people.
The Magnitsky Act says the president must publish by mid-April the list of accused human rights abusers – or explain to Congress why their names can’t be published. The reasons for not publishing must be tied to national security.
U.S. officials said there are differences within the Obama administration over what kind of list to produce – short or long – or whether to even produce two lists, one for the visa bans and another for the asset freezes.
“The difference is essentially between those who don’t want to piss off the Russian government any more than we absolutely have to, and those who don’t want to piss off Congress any more than we have to,” a State Department official said on condition of anonymity.
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Poison claim in mysterious Surrey death of Russian supergrass
Alexander Perepilichnyy’s friends question three-week delay in toxicology tests and say he may have been poisoned in Paris.
A Russian supergrass who died in mysterious circumstances outside his Surrey home may have been poisoned in Paris before travelling to England, his associates have claimed.
Alexander Perepilichnyy, a wealthy businessman who sought refuge in Britain after supplying evidence against an alleged crime syndicate in Russia, collapsed while jogging outside his Weybridge home almost five months ago. Toxicology tests on the 44-year-old’s body have failed to reveal a cause of death, although murder squad detectives are investigating whether he was poisoned.
It has now emerged that British police have been working with their French counterparts after establishing that on the day he died, 10 November 2012, Perepilichnyy travelled by Eurostar to London after spending three days in Paris. During his stay, the Russian booked and paid for a room at the Four Seasons Hotel George V, off the Champs-Elysées, where suites can cost more than £4,500 a night, but he did not stay there. Instead, Perepilichnyy chose to stay at a more modest three-star, £145-a-night hotel across the city.
Associates of Perepilichnyy believe it is “highly possible” he met his alleged poisoners in Paris before catching a morning train back to London and from there to Weybridge, where he rented a mansion in the gated St George’s Hill estate. Just after 5pm, the apparently healthy Russian was found dead in the street.
In 2006 Russian exile Alexander Litvinenko was fatally poisoned after meeting two KGB officers who are accused of serving him a cup of tea laced with radioactive polonium at the four-star Millennium hotel in London’s Grosvenor Square.
A spokesperson for Surrey police said that no officers or forensics experts had travelled to Paris, but that they were receiving “advice and support from other agencies”.
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Boris Berezovsky and the Russian Money Problem
Boris Berezovsky, once one of the richest men in Russia, was found dead last Saturday at his house in Ascot, a wealthy little English town near Windsor Castle.
Everything about the death suggests suicide. Berezovsky’s body was found inside a locked bathroom. An inquest has found no signs of violence on his body. The ligature around his neck corresponded to a fragment of ligature still attached to the shower curtain.
The 67-year-old Berezovsky had suffered financially from his prolonged conflict with Vladimir Putin’s Kremlin. In the past three years, he appears to have lost the remainder of his fortune. In 2011, a British court had ordered him to pay a huge settlement — rumored at 100-million pounds — to one of his ex-wives. Only last year he had been ordered to pay costs of 35-million pounds after losing a lawsuit against another Russian tycoon. He was reported to have sold artworks and houses to raise cash. Friends described him as “depressed.”
On the other hand … sudden death seems to have become contagious among Putin’s critics. Berezovsky had been friends with Alexander Litvinenko, the ex-spy who died of radiation poisoning in the United Kingdom in 2006 after somehow ingesting a dose of deadly polonium. In 2008, Berezovsky’s 52-year-old former business partner, Badri Patarkatsishvili, dropped dead at his home in Surrey, apparently of cardiac arrest. Well, he was a smoker.
The deaths of these ex-oligarchs will loose few tears. The friends and family of the American journalist Paul Klebnikov — murdered in Moscow in 2004 — suspect Berezovsky of ordering the hit. Berezovsky and Patarkatsishvili gained their fortunes by seizing assets of the former Soviet state in the disorder after the collapse of communism in the early 1990s.
But the second wave of oligarchs brought to wealth and power by their alliance with Vladimir Putin hardly constitute a moral improvement over the first. They are plundering the Russian state, too, this time in alliance with the former KGB — the spy agency Putin headed and whose leading members have become billionaires alongside him.
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The New Russian Mob
I realize this is a somewhat irresponsible thought, but I keep wondering why anyone should care if some Russian oligarchs and businesses — and corrupt officials — lose a bundle in Cyprus.
Yes, I know, the European Union’s original, ham-handed proposal — a tax on every bank deposit in Cyprus — was potentially destabilizing to the world’s financial system. It raised the specter of bank runs not just in Cyprus but all over Europe. It served as a jolting reminder that the European crisis is still with us. Yada, yada.
But it also turns out that much of the hot money held in the Cypriot banking system is Russian. Russian companies like the low taxes that come with having entities in Cyprus. Because of the wink, wink, nod, nod relationship between Cyprus and Russia, rubles deposited in Cypriot banks are as untraceable as dollars once were in Swiss bank accounts, according to Dmitry Gudkov, an opposition politician (about whom more in a moment). Corrupt officials who embezzle money have long found Cyprus to be a friendly haven. Bloomberg Businessweek reported earlier this week that a substantial amount of the $230 million fraud perpetrated in 2007 against Hermitage Capital — a crime unearthed by Sergei Magnitsky, the brave lawyer who died in prison after he exposed the fraud — can be traced to Cyprus.
To put it another way, the henchmen of Russia’s president, Vladimir Putin, who have gotten rich by trampling over the rule of law, are now getting a taste of their own medicine. In Cyprus, with no warning, the rules changed, and deposits larger than 100,000 euros may now face “haircuts” of as much as 40 percent. Though the purpose of the tax is to save the country’s banking system, the outcome is the same as when Russian officials create phony tax charges to steal a businessman’s assets. People feel they are being robbed. And they become extremely upset.
The funniest part is that according to Reuters, some Russian entities are threatening to sue. Actually, that makes a certain perverse sense: one of the reasons Russian bureaucrats are so quick to move their newly stolen wealth out of Russia is that they want it in a place where the rule of law actually has some meaning. They don’t want done to them what they’ve done to their fellow citizens.
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UK fund boss warned Germany about Russian money in Cyprus
UK fund manager Bill Browder, one of the Kremlin’s harshest critics, briefed German officials on Russian money laundering in Cyprus just before the European Union set tough terms for the island’s bailout.
He said at least $31 million was laundered through Cyprus bank accounts, funds that were part of a $230 million fraud his lawyer Sergei Magnitsky discovered before his death in a Moscow prison in 2009.
Browder said the Mediterranean island, one of the most important conduits for Russian money transfers, opened an investigation in December into the allegations the businessman first made in 2008.
Once the largest fund manager in Russia through his $4 billion Hermitage fund, Britain-based Browder is currently on trial in absentia in Russia on fraud charges. He denies any wrongdoing and says the charges are politically motivated.
“When Cyprus started to ask the Europeans for a 17 billion euro bailout, it seemed to me absurd that we should be bailing out Cyprus if they are unwilling to investigate the most well documented money laundering cases,” Browder said.
Browder spoke with Levin Holle, director general of financial markets policy at Germany’s ministry of finance, at a meeting last month confirmed by the ministry.
“There was a German team of people at a fairly senior level that were involved in structuring the Cyprus bailout. And they were very interested in what we had to say about this,” Browder said.
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Russian court portrays dead whistleblower as money-hungry schemer
Russian prosecutors portrayed a dead anti-corruption lawyer as a money-hungry schemer who used mentally disabled people to avoid paying taxes, in a case that has highlighted human rights concerns following Vladimir Putin’s return to the presidency.
The courtroom cage normally reserved for defendants stood empty as prosecutors called witnesses to testify that Sergei Magnitsky, who worked for a law firm hired by Hermitage Capital Management, exploited loopholes for financial gain.
Tax service official Anastasia Gerasimova told the court that William Browder, head of the investment fund, had evaded taxes by using tax breaks for disabled employees.
“They didn’t do any work. They also didn’t receive any payments, just some small fees for what they did in the firm, but at the same time they had a permanent job,” Itar-Tass quoted Gerasimova as saying.
“As a result of these schemes, half a billion roubles (around $16 million)were lost,” she said.
Magnitsky was arrested on tax fraud charges shortly after he leveled similar accusations against Russian state officials in 2008. He died in jail nearly a year later – family and former colleagues say he was mistreated and denied medical care.
His death and posthumous trial have strained Russian-U.S. ties, Washington imposing sanctions on dozens of Russians suspected of a role in his death in December, prompting Moscow to ban Americans from adopting Russian children.
Magnitsky’s mother Natalya has refused to appoint lawyers to represent her late son or attend the trial, which she says is a designed to punish his exposure of schemes in which officials allegedly stole $230 million through fraudulent tax refunds.
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Prosecutor to present Magnitsky, Browder tax evasion evidence
Moscow’s Tverskoi court on Wednesday will continue to hear the case against auditor of Britain’s Hermitage Capital Management foundation Sergei Magnitsky who died in a remand prison, and director general of the foundation, British citizen William Browder, accused of failing to pay 522 million roubles worth of taxes.
The prosecutor for the state is expected to begin to present the evidence.
At the previous hearing, the lawyers of Magnitsky and Browder refused to comment on the charges against their clients in the tax evasion case.
“We have nothing to say; we doubt we should participate in the trial at all,” Magnitsky’s lawyer Nikolai Gerasimov said. The court-appointed defense is skeptical about their role. At previous hearings, the lawyers repeatedly requested the court to let them withdraw from the trial or drop the proceedings, but the court insisted on going ahead with the review.
Earlier, Magnitsky’s family informed the court it would not attend the hearing which it called “illegitimate and unjustified.” Browder’s representatives also ignored the hearings.
Magnitsky and Browder are accused of failing to pay over 522 million roubles of taxes /Article 199, Part 2 of Russia’s penal code/. The investigators said the defendants had fabricated tax declarations and misused incentives intended for handicapped persons. Police also suspect Browder of involvement in the theft of Gazprom shares. This episode made a separate criminal case.
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Russian oligarch resigns from parliament after National Post investigation reveals Israeli citizenship, Canadian assets
A Russian oligarch who has maintained high-level influence in Moscow since the close of the Cold War resigned his seat in Russian parliament Tuesday after the National Post revealed he held dual citizenship and had extensive assets in Canada.
Vitaly Malkin tried for almost 20 years to relocate to Canada, investing millions in Toronto, but had been turned away over alleged ties to organized crime. During his failed immigration process he told Canadian officials he had Israeli citizenship and extensive foreign investments.
The Post revealed his past on March 5 and the news ignited a storm of controversy in Moscow because Russian law bars lawmakers from holding dual citizenship and owning undeclared foreign investments.
Mr. Malkin, once listed as one of the world’s wealthiest men, held a seat in the Russian upper house since 2004.
In announcing his resignation from the senate, Mr. Malkin said he has done nothing wrong. He told Russian media he no longer holds Israeli citizenship and was resigning to protect the image of the senate.
“The main accusation is that I was an Israeli citizen in the capacity of the senator,” Mr. Malkin said, according to Itar-Tass, a Russian state news agency. He said he renounced his Israeli citizenship after the rules on holding foreign citizenship changed and before he embarked on another term in senate.
“As far as I understand, I am not an Israeli citizen since August 2007,” he said.
Mr. Malkin said he was the victim of a smear campaign by foreigners motivated by his controversial lobbying in Washington, D.C., this summer against the Magnitsky Act, a U.S. law imposing sanctions against Russian officials involved in the 2009 death of Sergei Magnitsky.
(Mr. Magnitsky was a Russian lawyer who accused government officials of corruption on behalf of American investor Bill Browder, head of Hermitage Capital Management. His death in Russian custody is a source of significant friction between the U.S. and Russia.)
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To learn more about what happened to Sergei Magnitsky please read below
- Sergei Magnitsky
- Why was Sergei Magnitsky arrested?
- Sergei Magnitsky’s torture and death in prison
- President’s investigation sabotaged and going nowhere
- The corrupt officers attempt to arrest 8 lawyers
- Past crimes committed by the same corrupt officers
- Petitions requesting a real investigation into Magnitsky's death
- Worldwide reaction, calls to punish those responsible for corruption and murder
- Complaints against Lt.Col. Kuznetsov
- Complaints against Major Karpov
- Cover up
- Press about Magnitsky
- Bloggers about Magnitsky
- Corrupt officers:
- Sign petition
- Citizen investigator
- Join Justice for Magnitsky group on Facebook
- Contact us
- Sergei Magnitsky
