Posts Tagged ‘financial times’
Show trial strengthens the case for an EU Magnitsky Act
The posthumous trial of Sergei Magnitsky, the anti-corruption lawyer beaten to death in a Moscow jail, is not just the moment Russia’s legal system becomes the theatre of the absurd, but something worse. It is a show trial that harks back to the blackest days of the Soviet Union. Even in the Stalin era, however, such trials took place before defendants met their deaths in the dark recesses of the penal system, not after.
Posthumous trials are not unheard of in history. Pope Formosus (891-896AD) was tried post mortem by political enemies in the Cadaver Synod. Joan of Arc’s sentence was annulled in a retrial after her death; Oliver Cromwell’s body was exhumed to be posthumously “executed”. The Nazi Martin Bormann was named as a defendant in the 1945 Nuremberg trials, his whereabouts unclear, and later proved to be dead.
But in modern legal practice, posthumous trials are usually held to provide justice for victims, or to clear a defendant’s name. A 2011 constitutional court ruling in Russia allowed such a hearing if the defendant’s family pressed for it. In this case, none of those elements applies.
Mr Magnitsky’s trial on trumped-up tax evasion charges is a clear attempt to blacken his name. It comes as Bill Browder, his former employer, embarks on a push to persuade European capitals to adopt measures similar to the US Magnitsky Act – which imposed visa bans and asset freezes on officials implicated in the lawyer’s death. Yet if the Kremlin believes a “guilty” verdict obtained in such bizarre fashion will alter perceptions outside Russia, that shows how divorced from reality it has become.
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Sergei Magnitsky, Russia, and the rare case of the posthumous trial
On February 18*, Russian prosecutors plan to put a man on trial. Two things make the case important. First, the man is a whistleblower, a lawyer who was jailed after he had publicly accused interior ministry officials of tax fraud amounting to $230m. Second, he is dead.
Amnesty International argues that the posthumous prosecution of Sergei Magnitsky violates his fundamental rights even in death, “in particular the right to defend himself in person.”
Is it even legal to try someone once they’ve died? The key question is whether the trial is criminal, or civil, says William Schabas, professor of international law at Middlesex University. “You can sue a dead person in a civil court – you can sue their estate. But the point of a criminal prosecution is to put them in jail. To my knowledge you can’t hold a criminal trial once someone has died – although I can’t rule out the fact that a perverse justice system could create such a possibility.”
Marie-Aimee Brajeux at Queen Mary’s Criminal Justice Centre, University of London, agrees. “The objective of a criminal trial is to hold someone accountable for what they’ve done wrong and punish them for it. In that case, the defendant has to be alive and no action can be brought against them once they’re dead, especially as they can’t defend themselves.”
Until very recently, it was impossible in Russia to bring criminal proceedings against a dead person – so the case against Magnitsky was closed 13 days after he died. But in 2011, a Constitutional Court ruling allowed that criminal proceedings could be continued after someone’s death, if the deceased person’s relatives insisted on it. This is the basis on which the case against Magnitsky appears to have been reopened – despite the fact that his mother is strongly against the reopening of the case.
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Dead lawyer to go on trial in Russia
The posthumous trial of Sergei Magnitsky, a crusading lawyer who died in prison in 2009, is set to begin in Moscow on Monday. The trial is part of an effort by Russia’s government to push back against countries adopting blacklists similar to the Magnitsky law passed last December by the US.
As far as anyone can remember, it will be the first trial of a dead defendant in Russian, or Soviet, history and most expect a speedy conviction.
Bill Browder, the head of investment fund Hermitage Capital, and Mr Magnitsky’s former chief, says he believes the trial is connected to the passage last December of the Magnitsky law in the US, which imposes a visa blacklist and asset freezes on certain Russian officials accused of human rights violations.
Mr Browder recently began a campaign to promote similar laws in Europe, starting with a trip to Paris last week.
“This is just pure vindictive nastiness because they are trying to get some sort of conviction right away,” said Mr Browder. “They can then go around the world and say: ‘Look, you’re naming a law after a convicted criminal.’”
A representative of the prosecutor’s office said it had no additional comment. “The case materials explain everything. We have nothing additional to say.”
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Russian money streams through Cyprus
A new parking scheme appeared late last year in some congested Moscow neighbourhoods. Street signs advised Muscovites either to buy a ticket at a nearby machine or text their licence plate details to a number: 7757.
Evgeny Schultz, a Moscow blogger, took a closer look. It turned out that the number 7757 had been bought by a company registered just six months previously, which itself had been founded by two Cyprus-registered companies whose ownership was unclear.
One of the names on the registration documents was the same as that of a senior adviser to the city’s department of transport and communications, which oversees the parking programme.
“This could just be a massive coincidence, of course,” Mr Schulz said, with an unmistakable note of sarcasm.
The city has defended the scheme, saying “every kopek” goes into its budget. But the episode underlines the unique, pervasive and dubious role that Cyprus plays in Russia’s economy.
In June, Cyprus became the fifth country in the eurozone to request an international bailout after lenders got caught up in the debt restructuring of Greece’s banks. Seven months later, the island is still waiting for funding amid EU fears that the island is a haven for Russian dirty money. Such fears are particularly strong in Germany and will need to be assuaged if Berlin is to back a bailout.
Estimates of the size of Russia’s deposits in Cyprus range from €8bn, according to some experts, to up to €35bn, according to a German intelligence report cited in Der Spiegel magazine.
In 2011, Cyprus was the number-one destination for Russian money being sent abroad and the number-one direct investor in Russia, with more than $13bn in investments, according to Russia’s Central Bank.
“From an economic perspective, Russia and Cyprus are so intertwined, Cyprus could almost be another region of the Russian Federation,” said Steven Dashevsky, founder of Dashevsky & Partners, a Moscow investment company.
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A Magnitsky law for Europe: The US statute is a pro-Russian, not anti-Russian, act
Even by its own recent standards, Moscow’s response to the US Magnitsky law, which bars Russian officials accused of human rights violations from the US, has been ugly. President Vladimir Putin last week signed into law a ban on US citizens adopting Russian children. In effect, this strands thousands of Russia’s most vulnerable citizens in often appalling orphanages, as hostages to US-Russian relations.
The Kremlin clearly hopes, in part, to persuade other countries not to follow the US. They should not be cowed. For Moscow’s reaction also reflects just how these measures have hit home. Many Russian officials hold property and assets in the west, travel back and forth, and send their children to schools there. So a visa ban and asset freeze on those with at least prima facie cases to answer over rights abuses or criminal activity is a highly effective sanction.
The Magnitsky case, moreover, is egregious, well documented and encapsulates the darker side of Putinism. Tax officials used the shell of an investment fund, whose founder had been mysteriously barred from Russia, as a vehicle to steal $230m from the state. When the fund found out and presented evidence, the authorities did not prosecute anyone implicated. Instead, they arrested the lawyer investigating it, Sergei Magnitsky, and accused him of orchestrating the fraud himself. In jail, he was denied treatment for serious stomach problems and eventually beaten to death.
Even now the case has attracted international opprobrium, Russia has refused to back down. Instead it has launched an absurd posthumous prosecution of Mr Magnitsky for tax evasion. Moscow’s failure to act against the real suspects is at best bloody-mindedness. At worst, it suggests they have high-level protectors, who risk being dragged down with them.
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A milestone in the battle against corruption
From Mr Alexander Lebedev.
Sir, The signing of the Sergei Magnitsky Rule of Law Accountability Act by President Barack Obama last week marked a milestone in the fight against global corruption (“Russia moves to ban US adoptions”, December 20). Yet the “Magnitsky case” is just one of many involving national, international and Russian fraudsters and corrupt officials.
Crooked businessmen in collusion with public officials with business interests have embezzled and siphoned off at least $700bn from Russia over the past 15 years, according to the Tax Justice Network. In the face of theft on such a scale, US efforts against global corruption appear limited. To tackle this problem, there must be joint efforts by the leading powers, some of which have turned themselves into a promised land for corrupt officials and fraudsters from all over the world. It is necessary to stop the practice of granting asylum to dirty capital and to clean up the offshore Augean stables, outlawing the practice of nominee ownership.
Gordon Brown talked about this at the Group of Eight summit in 2009. Isn’t this what the Group of 20’s Anti-Corruption Working Group should be dealing with? Why isn’t the 2010 US law on “illegal proceeds” working? What have the UN efforts resulted in? Why hasn’t the relevant EU directive been ratified yet?
At an international level, it is necessary to establish an organisation with the broadest authority to investigate crimes of corruption and fraud linked to the cross-border movement of suspects and capital.
In September, the next G20 summit will be held in St Petersburg. The inclusion of these proposals on the agenda would send a clear message to the fraudsters who participated in the embezzlement of billions of roubles from public coffers that they will no longer be allowed to get away with it.
Alexander Lebedev, Publisher of Novaya Gazeta and Independent newspapers, Moscow and London unshaven girl быстрые займы онлайн https://zp-pdl.com/fast-and-easy-payday-loans-online.php zp-pdl.com займ на карту онлайн
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Fund file: Bullish on Russia?
Investors should look before they leap into investing in Russia, according to a report in Monday’s FTfm, but it is very unlikely that many will do so.
On the face of it, huge strides that have been made in the last year or so will make Russia a more friendly place for overseas investors.
“Right now we’re going through a period of moderate liberalisation,” says Jan Dehn, chief strategist with Ashmore, an emerging markets specialist.
He can see evidence of this in recent measures to allow greater flexibility of the rouble and in moves to encourage foreign ownership of local currency bonds. Until recently, he explains, foreign ownership of rouble-denominated Russian sovereign debt was about 3 per cent. It is now 5.4 per cent and Dehn expects the proportion to rise to something closer to the emerging market average, which is 20 per cent.
There is also a ministry of finance proposal that will require any listed company with majority state ownership to pay out 25 per cent of its profits in dividends to shareholders from next year. By next year, also, Russian companies will have to follow IFRS international accounting standards.
Small wonder that Dehn, along with many other emerging market fund managers, reports being overweight Russia.
Bill Browder, founder and chief executive of Hermitage Capital Management, thinks they have either foolish optimism or very short memories, or both.
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US moves closer to Russia trade bill
The US Congress is set to take a big step towards approving normal trade relations with Russia, brushing off geopolitical tensions to deliver a victory for large US exporters such as Caterpillar and General Electric.
The Ways and Means committee of the House of Representatives is expected to vote on a bill, probably on Thursday, that would allow US companies to reap the benefits from Russia’s looming accession to the World Trade Organisation. The so-called Magnitsky bill – which seeks to punish Russian officials for human rights abuses – will be attached to the legislation.
With both Republican and Democratic leaders on the panel endorsing the package, it should pass comfortably. This would bolster the chances of it being enacted before the August congressional recess – as its supporters are hoping for – though it may not happen until September or later in the year.
“The prospects have improved dramatically”, said Ron Pollett, chief executive of GE Russia, who was in Washington last week to lobby for the bill. “It’s a question of when, not if.”
The bill would unwind the Jackson-Vanik amendment, a Cold War relic that barred trade with the Soviet Union for restricting Jewish emigration. Its provisions have routinely been waived, but its presence has continued to sour US economic relations with Russia.
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The Sergei Magnitsky bill
When Congress takes the lead on foreign policy the result is not usually optimal. Some worry that America’s first branch of government is about to add to its dubious record with passage of the Magnitsky bill – named after the Russian lawyer who died in a Moscow jail in 2009 after having exposed massive corruption.
There are reasons to worry Congress may be overreaching. But the bill should not be discarded. Russia may be an indispensable, if frequently obstructive, international partner. But at home its government sometimes behaves like a criminal enterprise. The treatment of Sergei Magnitsky is one such instance.
There are two main objections to the bill in its latest form. Neither is insuperable. The first concerns the need to accommodate Russia’s recent entry into the World Trade Organisation, which is a White House priority in what remains of this Congress. In order to comply with WTO rules, the US has to scrap the 1974 Jackson-Vanik law, which linked the Soviet Union’s trade access to human rights benchmarks, notably its treatment of Jewish “refuseniks”. The law lost its purpose after the USSR’s collapse in 1991.
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