Posts Tagged ‘jackson-vanik’
Will Russia Graduate From The Jackson-Vanik Amendment? By Krickus
The Obama administration wants to scrap the Jackson-Vanik amendment, a Cold War relic that could compromise American economic interests after Russia enters the World Trade Organization (WTO). U.S. firms could be denied access to the Russian market and those operating in it would not be protected by WTO rules. But there are members of Congress in both parties who oppose granting Permanent Normal Trade Relations (PNTR) status to Moscow without a trade-off; namely in return for scrapping the amendment, the Obama administration will endorse passage of the Sergei Magnitsky Rule of Law Accountability Act—named after the human rights lawyer who died under government custody. It is designed to punish Russian officials who engage in human rights violations, illegally seize property, and falsify elections. Among other things, they will be subjected to visa and financial sanctions.
Some supporters of this trade-off are doing so out of principle. They believe that it will offer the Russian people protections against human rights violations. This is not the view of the Obama administration. Michael McFaul, the U.S. Ambassador to Russia opposes linking wider commercial relations between Moscow and Washington to human rights. He argues that it will not advance Russia’s march towards democracy. Instead he urges congress to provide $50 million dollars to Russian NGO’s to enhance their capacity to build a civil society and notes as well that visa bans have already been issued against some Russian officials.
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An outdated sanction impedes leverage over Russia
What measures could be taken to exert pressure on the Kremlin without punishing ordinary Russians?
The US senators Scoop Jackson and Charles Vanik are dead. The country they sought to pressure – the Soviet Union – is gone, and Russia, for all its faults, does not restrict the emigration that they wanted to liberalise.
Yet the ghosts of the Cold War still haunt the US’s relations with the Kremlin. So too do other more recent ghosts, such as the ‘re-set’ – a useful gimmick in its day, perhaps, but now an embarrassment overdue for retirement.
The big argument in Washington, DC now is not about binning the re-set but about the Jackson-Vanik amendment, which restricts ‘most-favoured’ (ie, normal) trade relations with countries with non-market economies that restrict emigration.
In practice, Jackson-Vanik is an irritant, not an obstacle. The administration routinely waives its provisions. But would it send the wrong message to Vladimir Putin’s Kremlin to lift it unilaterally, as common sense demands now that Russia is joining the World Trade Organization? And if so, would visa restrictions on those involved in the Magnitsky affair be a sufficient counterweight? (It may be worth reminding some readers that Sergei Magnitsky was a Russian lawyer who uncovered a $230 million – €175m – fraud perpetrated on the Russian taxpayer by corrupt officials, was jailed as a result, kept in horrific conditions when he refused to snitch on his client, and died after a savage beating.)
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Return on Investment
Conventional wisdom – and Republican presidential candidate Ron Paul – say that providing financial aid to foreign countries is a shameful waste of U.S. taxpayers dollars. However, a recent story in the New York Times suggests that this common believe, believe it or not, American politicians could actually be wrong on this point.
According to the story, in 1989, Congress approved legislation allowing the investment of U.S. federal funds in the former communist countries of Eastern Europe and Central Asia – to help them develop market economies. Far from being wasted, these investments turned to be quite successful, having generated a lofty $2.3 billion in returns. Part of the proceeds was returned to the Treasury, but some of the money has been stuck in Congress for years. Now, the Obama Administration wants to redirect a $50 million generated by the U.S.-Russia Investment Fund into a “civil society fund” that would underwrite democracy promotion in Russia.
The timing of the announcement is hardly coincidental. The Obama Administration has finally gotten serious about repealing the Jackson-Vanik amendment, the notorious relic of the Cold War that still deprives Russia of the permanent normal trade relations status as a punishment for restricting Jewish emigration in the 1970s. The effort has been met with a stiff resistance by the Republicans on Capitol Hill. While agreeing with the White House that the amendment should go – as keeping it on the books now, that Russia is joining the WTO, will hurt interests of American companies – Republicans argue that something else should be put in place to hold Moscow accountable for what they habitually call “human-right abuses.”
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“Not Even Stalin Did That”
The House Foreign Affairs Committee met yesterday on the heels of the tainted Russian election that put Vladimir Putin back in power. (He never left.)
A top observer characterized Russia’s leadership as “corrupt, rotten and rotting.” A quarter to a third of the economy is lost to corruption, it’s believed. $84 billion in capital flight last year alone.
Human rights abuses abound. The head of an investment fund told the story of Sergei Magnitsky, his Moscow lawyer. In 2008, Magnitsky uncovered evidence of police corruption and embezzlement. He was dead eleven months later – imprisoned, beaten and denied critical medical treatment. One Committee member called this testimony “one of the most powerful the Committee has ever heard.” Magnitsky’s case has become a cause célèbre in Russia, an example of the systemic corruption and abuse of power that has driven tens of thousands of protesters to Moscow’s streets recently.
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If the US Congress cares about human rights, it will replace Jackson-Vanik with the Magnitsky Act
The US House Committee on Foreign Affairs hosted a hearing yesterday that addressed human rights and corruption in Russia, and the future of US-Russian relations. The hearing paid particular attention to the Sergei Magnitsky Rule of Law Accountability Act (.pdf), currently under consideration by the US Congress, which seeks to impose travel bans and asset freezes against the individuals involved in the false imprisonment, torture and death of the whistleblower attorney Sergei Magnitsky. The act also carries a universal application against all individuals credibly suspected of human rights abuses.
The hearing highlighted one of the key issues facing contemporary US-Russian relations: how—or indeed, whether– the US can support human rights in Russia today. This question was embodied in the confluence of the debate over the Magnitsky Act and the proposed repeal of the Jackson-Vanik amendment.
The proceedings featured the testimony of Bill Browder, the CEO of Hermitage Capital who has spearheaded the campaign to bring the perpetrators of Sergei Magnitsky’s false imprisonment and death to justice. Sergei Magnitsky was an attorney employed to represent Hermitage Capital, who uncovered an elaborate ruse by government officials whereby Hermitage companies were fraudulently re-registered and used to apply for a tax refund of $230 million. Magnitsky went public with his accusations, and was subsequently pressured into confessing to the theft of the $230 million, and imprisoned without trial in November 2008.
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Why Magnitsky is Good for Business
Momentum is building in the US press for passage of the Magnitsky Act. After the liberal initially won the mindshare advocating only repeal of JVA with no further action (i.e. with this ambiguous and wimpy New York Times piece), yesterday, the Wall Street Journal rightly called Magnitsky “a bi-partisan challenge to Obama’s blind spot on Russia”:
For two years, the White House has scuttled the Magnitsky bill. Senate Foreign Relations Chairman John Kerry, who dreams of the top job at Foggy Bottom in a second Obama term, refuses to hold hearings. Mike McFaul, the new ambassador to Russia, last week called it “redundant” because the State Department put some Russian officials on a visa black list last year. He didn’t mention that it only did so in response to Senate pressure and in an effort to pre-empt Senate action. Nor did he say that, unlike the Magnitsky bill, State didn’t publicly name names or ban them from using the U.S. banking system.
Russian opposition leader Ilya Yashin blogs today in a post made “best post of the day” in favour of retiring the Jackson-Vanik Amendment but passing the Magnitsky Act. He describes a recent meeting with Ambassador McFaul about JVA — and it’s good that Russian opposition figures are making clear their support for the Magnitsky bill since McFaul tried to portray the opposition as only interested in JVA.
He then talks about how Russia should not be punished and kept out of the modern world economy and JVA is essentially an anachronism. Ok.
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Moscow authorities prohibit rally calling for justice for Sergei Magnitsky
City officials denied permission Monday for a rally on behalf of a lawyer who died in police custody in 2009, revealing deep sensitivity to a case that has provoked accusations of high-level corruption here and set off threats of sanctions as far away as Washington.
The death of Sergei L. Magnitsky has prompted debates in Congress and among lawmakers, human rights advocates and the Obama administration over how U.S. foreign policy should address trade issues and human rights abuses in Russia.
Moscow authorities have refused to allow a rally on Saturday calling for justice for Magnitsky, even as they have permitted a series of provocative demonstrations during which Russians shouted insults directed at Prime Minister Vladimir Putin, only recently an unimaginable situation.
“How can you say rallying for justice is wrong?” asked Natalia Pelevine, a playwright and activist who applied for the permit. “Justice is wrong?”
She said city officials, who could not be reached for comment Monday evening, told her that such a gathering would influence court proceedings.
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After Jackson-Vanik
The Obama Administration’s “reset” with Russia has muffled concerns over human rights and democracy and dwelled on business palatable to the Kremlin like nuclear proliferation and trade. The Senate now has an opportunity to restore balance to this relationship.
Days after Vladimir Putin won another manipulated election, President Obama responded by calling for the Senate to repeal the 1974 Jackson-Vanik amendment, which links trade access to Moscow’s treatment of its citizens. The dispute in Washington isn’t whether Jackson-Vanik should stay in place, but what should follow.
With Russia set to join the World Trade Organization this summer, American companies would be hurt by Jackson-Vanik, which blocks the U.S. from granting normal trading status. Under WTO rules, Russia could adopt retaliatory tariffs. Even Russian opposition leaders consider Jackson-Vanik a “relic,” as Garry Kasparov and Boris Nemtsov wrote in these pages Thursday. They support its repeal. As do we.
The problem is that the White House doesn’t want anything else put in its place to hold the Kremlin to account for human-rights abuses. Some senior Senators disagree, and they support a worthy successor to Jackson-Vanik.
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Echoes of 1970s Debate Resurface Over Current Russia Trade Bill
History is sometimes cyclical.
In 1974, Congress was debating the Jackson-Vanik amendment that would restrict most-favored-nation treatment to the Soviet Union and tie trade relaxation to Soviet willingness to allow Jewish emigration to Israel. The leader of this fight was the late Senator Henry Martin Jackson of Washington, a paragon of friendship to Israel and the Jewish people.
Secretary of State Henry Kissinger led the fight against the amendment, claiming that the Soviet Union would view it as intervention into its internal affairs and that as a proud superpower, it would only stiffen its position on Jewish emigration; therefore, quiet diplomacy was the preferred tactic.
In the congressional hearings, American businesses and particularly the Business Roundtable, lobbied strongly against the amendment. It was 1973 and the US economy was reeling due to the aftereffects of a costly Vietnam War and the hike in oil prices following the Yom Kippur war.
It was important for American business to trade with the Soviet Union at a time that the Soviet Union and Eastern European countries were massively buying Western goods and technology in the hope of jumpstarting their economies. The Jackson-Vanik amendment would effectively close the door to American business and make sure that the Europeans would have the Russian market to themselves.
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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
