Posts Tagged ‘WTO’
Russia: Reforming or Unravelling
Russia’s engagement with the OECD and WTO means rule of law reform should be imminent. Yet, the worst excesses of government control and human rights abuses suggest otherwise.
When Russia finally joined the World Trade Organisation (WTO) on 22 August 2012, after an 18-year-long hard-fought slog, there were many left wondering if the wait had been worth it – and whether membership would bring any significant change. In a year that saw Vladimir Putin embark upon his third term as the country’s president, it’s unsurprising that few things have changed since last August. Changes that have been implemented appear largely at odds with the new era of transparency promised by WTO membership, instead suggesting some worrying consequences for the rule of law.
One of the most striking incidents to bring Russia’s rule of law into focus in recent years has been the highly publicised case of Moscow-based lawyer Sergei Magnitsky, who died in pre-trial custody in November 2009. While it’s just one incident, Magnitsky’s plight continues to dominate the headlines worldwide and is as a stark reminder of Russia’s track record for human rights violations.
Indeed, as Russia’s WTO membership was being secured last August, the US Congress was also on the verge of voting in favour of the Sergei Magnitsky Rule of Law Accountability Act 2012 (the ‘Magnitsky Act’), finally passing the law in November. This in itself was an important milestone since part of the law also required the US government to grant Russia Permanent Normal Trade Relations (PNTR).
The idea behind the PNTR bill was to once and for all revoke the Jackson Vanik amendment to the Trade Act of 1974 – an outdated Cold War era piece of legislation originally implemented by the US as a penalty against the Soviet Union for placing emigration restrictions on its citizens which prevented Russia from enjoying full trading relations with the US.
While the potential for improved trade relations between Russia and the US seemed, on the face of it, a positive step forward and in keeping with WTO rules which stipulate that member states must grant each other unconditional trading rights, a storm was already brewing.
In December last year, the Magnitsky Act was finally signed into law by President Barack Obama. The Russian government reacted strongly to the decision. It announced an outright ban on American adoption of Russian citizens and that it was proceeding with plans to try Magnitsky posthumously and, in absentia, Magnitsky’s client at the time of his death, founder of Hermitage Capital, Bill Browder. Once again the wider issues of corruption and human rights abuses in Russia, as well as the underlying flaws inherent in the country’s judicial and penitentiary systems, had reared their heads.
Many people, including Martin Šolc, name partner of Czech law firm Kocián Šolc Balaštik and Secretary-General of the IBA, have voiced strong concerns over the posthumous reopening of the criminal proceedings and what it may mean for the rule of law in Russia. ‘The whole case evidences how desperately the system, driven by clan instincts, tries to protect its people, regardless of what they may have committed,’ says Šolc. ‘If the clan is in danger, law does not seem to matter.’
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Putin Aide Says U.S. Holds Key to Improving Ties
Strained U.S.-Russian ties will not improve unless Washington stops openly criticizing Moscow’s human rights record and supporting President Vladimir Putin’s foes, the top foreign policy official in the Russian parliament said.
Relations between the Cold War-era rivals took a dive after Putin’s return to the Kremlin in May, undermining a 2009 initiative by U.S. President Barack Obama and Russia’s then-president, Dmitry Medvedev, a more liberal Putin protege, to “reset” ties.
Alexei Pushkov, head of the international affairs committee in parliament’s lower chamber and a Putin ally, said the ties were “negatively stable” now and the “reset” could be considered over without an initiative on the highest political level to save it.
“The priority is political realism. Ideology matters should be secondary. I tell you, issues over ideology and values can destroy anything,” Pushkov said in an interview.
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Obama Signs Magnitsky Act Into Law
US President Barack Obama on Friday signed into law the Magnitsky Act, a bill punishing Russian officials for alleged human rights violations that US lawmakers attached to a landmark trade bill normalizing trade relations with Moscow.
The aspects of the law targeting Russian officials, which simultaneously repeals the Cold War-era Jackson-Vanik law, has angered the Kremlin, which says it is an attempt by the United States to interfere in Russia’s internal affairs.
The law calls on the White House to draw up a list of Russian officials deemed by Washington to be complicit in rights abuses. These officials will then be banned from obtaining US visas and have their US assets frozen.
The Russian Foreign Ministry issued an angry statement Friday in response to the new US law, calling the linking of the human rights legislation to the trade bill “cynical.”
The statement also made reference to the Obama administration’s original reluctance to attach the Magnitsky Act to the trade legislation, an effort that had overwhelming bipartisan support in the US Congress.
“We regret that a US administration declaring its commitment to the development of stable and constructive bilateral relations was unable to defend its stated position against those who look to the past and see our country not as a partner, but rather an opponent—fully in line with the canons of the Cold War,” the ministry said in the statement.
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Magnitsky Bill Likely to Reopen Old Wounds
Historical mistrust and relatively weak trade links could amplify the Magnitsky Act’s damage to U.S.-Russian relations, although Washington will likely use caution in applying sanctions to Russians suspected of human rights violations, analysts said.
“In the absence of a solid background of trust and partnership, even relatively insignificant episodes can sour relations and leave a trace for a long time,” said Masha Lipman, an analyst with the Carnegie Moscow Center.
Over the weekend, Russian condemnations escalated over the U.S. Senate’s nearly unanimous passage of the so-called Magnitsky Act, which normalizes trade relations with Russia and authorizes sanctions on Russians suspected of human rights violations.
“The Magnitsky Act is an attempt to interfere in our internal affairs,” Foreign Minister Sergei Lavrov told a group of allies of President Vladimir Putin on Sunday, adding that parliament’s reaction should be “collective and multi-partisan,” RBC reported.
Passage of the Magnitsky bill, which U.S. President Barack Obama said he would sign, appeared to mark a low point in the U.S.-Russian relationship under Obama, who has pursued improved relations under the “reset” policy, resulting in Russia’s joining the World Trade Organization and bilateral agreements on visas and nuclear weapons.
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Sergei Magnitsky: symbol of prison abuse in Russia
Sergei Magnitsky, whose case triggered a US-Russia row on Thursday, was a lawyer working for a Western firm who died in pre-trial jail at 37 in Moscow in 2009 after claiming to have discovered a major tax fraud covered up by government officials.
He died after spending almost a year under pre-trial arrest that his mother said had exposed him to “torture conditions” and which his employer called retribution for his testimony against interior ministry officers.
Prosecutors said that Magnitsky died from acute heart and pancreatic failure and fluid in the brain in combination with other conditions, including diabetes.
Human rights campaigners, including the Kremlin’s human rights council, said that the lawyer was ill-treated deliberately and even tortured, handcuffed one hour before his death despite suffering from acute pain.
Magnitsky’s firm Firestone Duncan was providing legal support to what was once Russia’s largest investment fund Hermitage Capital Management, whose head William Browder fell out of favour with the Kremlin and was denied a visa in 2005.
Prior to his arrest, Sergei Magnitsky claimed to have uncovered a scheme used by police officials to reclaim about $235 million in taxes paid by his client.
However instead of looking into the claims Russia charged the lawyer with fraud and locked him up in Moscow’s Matrosskaya Tishina jail, later transferring him to Moscow’s infamous Butyrka prison.
His death caused an international outrage, whose ripple effects are still felt today.
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Senate to vote on Russia Trade and Rights Bill
The Senate is set to endorse legislation that both normalizes trade with Russia and highlights the discord between the two countries over human rights issues.
The vote Thursday to establish permanent normal trade relations with Russia will bring considerable relief to U.S. exporters and investors anxious about losing shares of Russia’s growing market to European and Chinese competitors. It also could bring retaliation from Moscow over a provision that sanctions Russian officials who allegedly commit human rights violations.
The House passed the legislation last month on a 365-43 vote, and President Barack Obama’s administration has urged Congress to move quickly to get it to the president’s desk.
There’s a sense of urgency because Russia in August became the last major economic power to enter the World Trade Organization, committing it to lowering tariffs, removing other trade barriers, protecting intellectual property, opening up its service industries and submitting to the WTO’s dispute resolution process.
But unless Congress formally normalizes trade relations, U.S. exporters will be alone among the members of the 157-nation WTO unable to enjoy the increased market access. That puts them at a serious disadvantage in competing for sales in the world’s ninth-largest economy, with an estimated 140 million consumers.
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U.S.–Russia Trade Relations Linked to Human Rights
A bill that would grant the Russian Federation Permanent Normal Trade Relations, or PNTR, comes with a condition: punishment of Russian officials for human rights abuses resulting in the death of tax lawyer Sergei Magnitsky in 2009.
Magnitsky’s story “is emblematic of corruption, human rights abuses and impunity in Russia,” said U.S. Rep. Jim McGovern (D-Mass.).
Magnitsky was a tax lawyer who exposed a $230 million tax fraud—the largest known tax refund fraud in Russian history—carried out by officials of the Russian government. McGovern told Magnitsky’s story during the House debate on Nov.15: “Lawyer Sergei Magnitsky was wrongly arrested and tortured in a Russian prison. Six months later, he became seriously ill. He was denied medical attention despite 20 formal requests.
“On the night of November 16, 2009—three years ago tomorrow—his condition became critical. Instead of being treated in a hospital, he was taken to an isolation cell, chained to a bed, and beaten by eight prison guards for one hour and 18 minutes, which resulted in his death.”
Chief Executive Director of Hermitage Capital Management William Browder, who had hired Magnitsky, testified that 59 of the 60 people involved in the Magnitsky case have been exonerated. Some of the guiltiest have been promoted and received state honors, he said.
The Sergei Magnitsky Rule of Law Accountability Act bans visas and freezes the assets of those individuals responsible for the false arrest, torture, and death of Magnitsky. It applies as well to Russian officials engaged in corruption or gross violations of human rights.
Several Congress members with reputations as stalwarts for human rights were reluctant to grant Russia PNTR status because of the nation’s deteriorating human rights situation. Both Democrat Congressman Jim McGovern and Republican Congresswoman Ileana Ros-Lehtinen stated publicly that they would not have voted in favor of granting PNTR for the Russian Federation if it did not include the Magnitsky Act.
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Magnitsky Act overcomes further hurdle in US Congress
The US House of Representatives has voted overwhelmingly in favour of the Magnitsky Act, with 365 to 43 in favour of passing the bill.
The vote went in favour of passing the Sergei Magnitsky Rule of Law Accountability Act of 2012 and a law to grant Russian Permanent Normal Trade Relations (PNTR), a hangover from the Jackson-Vanik amendment to the Trade Act of 1974, which was originally introduced by the US to prevent the former Soviet Union from enjoying PNTR with the US.
The vote was originally scheduled to take place on 3 August before Congress broke for the summer recess, but was postponed until last week.
Bill Browder, the founder of Hermitage Capital Management and a client of lawyer Magnitsky, who died in November 2009 in pre-trial detention, has been instrumental in bringing Magnitsky’s plight to the attention of the US Congress and was in the US on Thursday testifying prior to the vote on Friday.
Browder, who has compiled a dossier of thousands of pages citing evidence of the 60 Russian officials suspected of collusion in Magnitsky’s arrest, torture and subsequent death, told The Lawyer that the latest vote was hugely significant both for the Magnitsky campaign and for eradicating impunity for human rights abuses in Russia more generally.
“It’s the most important piece of human rights legislation since the Jackson Vanik Act 35 years ago and creates real consequences for human rights abusers in Russia,” he said.
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Magnitsky Act Promises to Punish Human Rights Abuse, Open Trade
Last Thursday, the House of Representatives passed a bill that included language—called the Magnitsky Act—that for the first time punishes Russian officials implicated in serious human rights abuses.
The bill was passed by an overwhelming majority—365 to 43—demonstrating strong bipartisan support. The Senate will vote on the Magnitsky Act and the underlying bill during the lame-duck session after the Thanksgiving recess.
The Magnitsky Act is named after the late Moscow lawyer, accountant, and whistleblower Sergei Magnitsky, who in 2009 accused Russian police and tax officials of embezzling $230 million from the Russian treasury. For his “crime” of holding government accountable, Magnitsky was jailed, tortured, denied medical care, and finally beaten to death in his prison cell.
Russian President Vladimir Putin referred to the Magnitsky case as a “tragedy” while vehemently opposing the U.S. legislation named after the whistleblower. Some perpetrators of the Magnitsky persecution even received medals and promotions.
Instead of conducting a proper investigation to bring those responsible for Magnitsky’s death to justice, the Kremlin has threatened to retaliate, accusing the U.S. of meddling in Russia’s internal affairs.
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