Stop the Untouchables. Justice for Sergei Magnitsky.

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.”