[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1039 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1039
To impose sanctions on persons responsible for the detention, abuse, or
death of Sergei Magnitsky, for the conspiracy to defraud the Russian
Federation of taxes on corporate profits through fraudulent
transactions and lawsuits against Hermitage, and for other gross
violations of human rights in the Russian Federation, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 19, 2011
Mr. Cardin (for himself, Mr. McCain, Ms. Ayotte, Mr. Begich, Mr.
Blumenthal, Mr. Durbin, Mr. Johanns, Mr. Kirk, Mr. Kyl, Mr. Lieberman,
Mr. Rubio, Mrs. Shaheen, Mr. Whitehouse, and Mr. Wicker) introduced the
following bill; which was read twice and referred to the Committee on
Foreign Relations
_______________________________________________________________________
A BILL
To impose sanctions on persons responsible for the detention, abuse, or
death of Sergei Magnitsky, for the conspiracy to defraud the Russian
Federation of taxes on corporate profits through fraudulent
transactions and lawsuits against Hermitage, and for other gross
violations of human rights in the Russian Federation, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Sergei Magnitsky Rule of Law
Accountability Act of 2011''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The United States supports the people of the Russian
Federation in their efforts to realize their full economic
potential and to advance democracy, human rights, and the rule
of law.
(2) The Russian Federation--
(A) is a member of the United Nations, the
Organization for Security and Co-operation in Europe,
the Council of Europe, and the International Monetary
Fund;
(B) has ratified the Convention against Torture and
Other Cruel, Inhuman or Degrading Treatment or
Punishment, the International Covenant on Civil and
Political Rights, and the United Nations Convention
against Corruption; and
(C) is bound by the legal obligations set forth in
the European Convention on Human Rights.
(3) States voluntarily commit themselves to respect
obligations and responsibilities through the adoption of
international agreements and treaties, which must be observed
in good faith in order to maintain the stability of the
international order. Human rights are an integral part of
international law, and lie at the foundation of the
international order. The protection of human rights, therefore,
particularly in the case of a country that has incurred
obligations to protect human rights under an international
agreement to which it is a party, is not left exclusively to
the internal affairs of that country.
(4) Good governance and anti-corruption measures are
instrumental in the protection of human rights and in achieving
sustainable economic growth, which benefits both the people of
the Russian Federation and the international community through
the creation of open and transparent markets.
(5) Systemic corruption erodes trust and confidence in
democratic institutions, the rule of law, and human rights
protections. This is the case when public officials are allowed
to abuse their authority with impunity for political or
financial gains in collusion with private entities.
(6) The Russian nongovernmental organization INDEM has
estimated that corruption amounts to hundreds of billions of
dollars a year, an increasing share of the gross domestic
product of the Russian Federation.
(7) The President of the Russian Federation, Dmitry
Medvedev, has addressed corruption in many public speeches,
including stating in his 2009 address to Russia's Federal
Assembly, ``[Z]ero tolerance of corruption should become part
of our national culture. . . . In Russia we often say that
there are few cases in which corrupt officials are prosecuted.
. . . [S]imply incarcerating a few will not resolve the
problem. But incarcerated they must be.''. President Medvedev
went on to say, ``We shall overcome underdevelopment and
corruption because we are a strong and free people, and deserve
a normal life in a modern, prosperous democratic society.''.
Furthermore, President Medvedev has acknowledged Russia's
disregard for the rule of law and used the term ``legal
nihilism'' to describe a criminal justice system that continues
to imprison innocent people.
(8) The systematic abuse of Sergei Magnitsky, including his
repressive arrest and torture in custody by the same officers
of the Ministry of the Interior of the Russian Federation that
Mr. Magnitsky had implicated in the embezzlement of funds from
the Russian Treasury and the misappropriation of 3 companies
from his client, Hermitage, reflects how deeply the protection
of human rights is affected by corruption.
(9) The politically motivated nature of the persecution of
Mr. Magnitsky is demonstrated by--
(A) the denial by all state bodies of the Russian
Federation of any justice or legal remedies to Mr.
Magnitsky during the nearly 12 full months he was kept
without trial in detention; and
(B) the impunity of state officials he testified
against for their involvement in corruption and the
carrying out of his repressive persecution since his
death.
(10) Mr. Magnitsky died on November 16, 2009, at the age of
37, in Matrosskaya Tishina Prison in Moscow, Russia, and is
survived by a mother, a wife, and 2 sons.
(11) The Public Oversight Commission of the City of Moscow
for the Control of the Observance of Human Rights in Places of
Forced Detention, an organization empowered by Russian law to
independently monitor prison conditions, concluded, ``A man who
is kept in custody and is being detained is not capable of
using all the necessary means to protect either his life or his
health. This is a responsibility of a state which holds him
captive. Therefore, the case of Sergei Magnitsky can be
described as a breach of the right to life. The members of the
civic supervisory commission have reached the conclusion that
Magnitsky had been experiencing both psychological and physical
pressure in custody, and the conditions in some of the wards of
Butyrka can be justifiably called torturous. The people
responsible for this must be punished.''.
(12) According to the Financial Times, ``A commission
appointed by President Dmitry Medvedev has found that Russian
police fabricated charges against an anti-corruption lawyer
[Sergei Magnitsky], whose death in prison in 2009 has come to
symbolise pervasive corruption in Russian law enforcement.''.
(13) The second trial and verdict against former Yukos
executives Mikhail Khodorkovsky and Platon Lebedev evokes
serious concerns about the right to a fair trial and the
independence of the judiciary in the Russian Federation. The
lack of credible charges, intimidation of witnesses, violations
of due process and procedural norms, falsification or
withholding of documents, denial of attorney-client privilege,
and illegal detention in the Yukos case are highly troubling.
The Council of Europe, Freedom House, and Amnesty
International, among others, have concluded that they were
charged and imprisoned in a process that did not follow the
rule of law and was politically influenced. Furthermore, senior
officials of the Government of the Russian Federation have
acknowledged that the arrest and imprisonment of Khodorkovsky
were politically motivated.
(14) According to Freedom House's 2011 report entitled
``The Perpetual Battle: Corruption in the Former Soviet Union
and the New EU Members'', ``[t]he highly publicized cases of
Sergei Magnitsky, a 37-year-old lawyer who died in pretrial
detention in November 2009 after exposing a multimillion-dollar
fraud against the Russian taxpayer, and Mikhail Khodorkovsky,
the jailed business magnate and regime critic who was sentenced
at the end of 2010 to remain in prison through 2017, put an
international spotlight on the Russian state's contempt for the
rule of law. . . . By silencing influential and accomplished
figures such as Khodorkovsky and Magnitsky, the Russian
authorities have made it abundantly clear that anyone in Russia
can be silenced.''.
(15) Sergei Magnitsky's experience, while particularly
illustrative of the negative effects of official corruption on
the rights of an individual citizen, appears to be emblematic
of a broader pattern of disregard for the numerous domestic and
international human rights commitments of the Russian
Federation and impunity for those who violate basic human
rights and freedoms.
(16) The tragic and unresolved murders of Nustap
Abdurakhmanov, Maksharip Aushev, Natalya Estemirova, Akhmed
Hadjimagomedov, Umar Israilov, Paul Klebnikov, Anna
Politkovskaya, Saihadji Saihadjiev, and Magomed Y. Yevloyev,
the death in custody of Vera Trifonova, the disappearances of
Mokhmadsalakh Masaev and Said-Saleh Ibragimov, the torture of
Ali Israilov and Islam Umarpashaev, the near-fatal beatings of
Mikhail Beketov, Oleg Kashin, Arkadiy Lander, and Mikhail
Vinyukov, and the harsh and ongoing imprisonment of Mikhail
Khodorkovsky, Alexei Kozlov, Platon Lebedev, and Fyodor Mikheev
further illustrate the grave danger of exposing the wrongdoing
of officials of the Government of the Russian Federation,
including Chechen leader Ramzan Kadyrov, or of seeking to
obtain, exercise, defend, or promote internationally recognized
human rights and freedoms.
SEC. 3. DEFINITIONS.
In this Act:
(1) Admitted; alien.--The terms ``admitted'' and ``alien''
have the meanings given those terms in section 101 of the
Immigration and Nationality Act (8 U.S.C. 1101).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services, the
Committee on Foreign Affairs, and the Committee on the
Judiciary of the House of Representatives; and
(B) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Foreign Relations, and the
Committee on the Judiciary of the Senate.
(3) Financial institution; domestic financial agency;
domestic financial institution.--The terms ``financial
institution'', ``domestic financial agency'', and ``domestic
financial institution'' have the meanings given those terms in
section 5312 of title 31, United States Code.
(4) United states person.--The term ``United States
person'' means--
(A) a United States citizen or an alien lawfully
admitted for permanent residence to the United States;
or
(B) an entity organized under the laws of the
United States or of any jurisdiction within the United
States, including a foreign branch of such an entity.
SEC. 4. IDENTIFICATION OF PERSONS RESPONSIBLE FOR THE DETENTION, ABUSE,
AND DEATH OF SERGEI MAGNITSKY, THE CONSPIRACY TO DEFRAUD
THE RUSSIAN FEDERATION OF TAXES ON CERTAIN CORPORATE
PROFITS, AND OTHER GROSS VIOLATIONS OF HUMAN RIGHTS.
(a) In General.--Not later than 90 days after the date of the
enactment of this Act, the Secretary of State, in consultation with the
Secretary of the Treasury, shall publish a list of each person the
Secretary of State has reason to believe--
(1)(A) is responsible for the detention, abuse, or death of
Sergei Magnitsky;
(B) participated in efforts to conceal the legal liability
for the detention, abuse, or death of Sergei Magnitsky; or
(C) committed those frauds discovered by Sergei Magnitsky,
including conspiring to defraud the Russian Federation of taxes
on corporate profits through fraudulent transactions and
lawsuits against the foreign investment company known as
Hermitage and to misappropriate entities owned or controlled by
Hermitage; or
(2) is responsible for extrajudicial killings, torture, or
other gross violations of human rights committed against
individuals seeking--
(A) to expose illegal activity carried out by
officials of the Government of the Russian Federation;
or
(B) to obtain, exercise, defend, or promote
internationally recognized human rights and freedoms,
such as the freedoms of religion, expression,
association, and assembly and the rights to a fair
trial and democratic elections.
(b) Updates.--The Secretary of State shall update the list required
by subsection (a) as new information becomes available.
(c) Notice.--The Secretary of State shall--
(1) to the extent practicable, provide notice and an
opportunity for a hearing to a person before the person is
added to the list required by subsection (a); and
(2) remove a person from the list if the person
demonstrates to the satisfaction of the Secretary that the
person did not engage in the activity for which the person was
added to the list.
(d) Requests by Members of Congress.--Not later than 30 days after
receiving a written request from a Member of Congress with respect to
whether a person meets the criteria for being added to the list
required by subsection (a), the Secretary of State shall inform that
Member of the determination of the Secretary with respect to whether or
not that person meets those criteria.
SEC. 5. INADMISSIBILITY OF CERTAIN ALIENS.
(a) Ineligibility for Visas.--An alien is ineligible to receive a
visa to enter the United States and ineligible to be admitted to the
United States if the alien is on the list required by section 4(a).
(b) Current Visas Revoked.--The Secretary of State shall revoke, in
accordance with section 221(i) of the Immigration and Nationality Act
(8 U.S.C. 1201(i)), the visa or other documentation of any alien who
would be ineligible to receive such a visa or documentation under
subsection (a).
(c) Waiver for National Interests.--The Secretary of State may
waive the application of subsection (a) or (b) in the case of an alien
if the Secretary determines that such a waiver is in the national
interests of the United States. Upon granting such a waiver, the
Secretary shall provide to the appropriate congressional committees
notice of, and a justification for, the waiver.
SEC. 6. FINANCIAL MEASURES.
(a) Special Measures.--Not later than 120 days after the date of
the enactment of this Act, the Secretary of the Treasury shall
investigate money laundering relating to the conspiracy described in
section 4(a)(1)(C). If the Secretary of the Treasury makes a
determination under section 5318A of title 31, United States Code, with
respect to such money laundering, the Secretary of the Treasury shall
instruct domestic financial institutions and domestic financial
agencies to take 1 or more special measures described in section
5318A(b) of such title.
(b) Freezing of Assets.--The Secretary of the Treasury shall freeze
and prohibit all transactions in all property and interests in property
of a person that are in the United States, that come within the United
States, or that are or come within the possession or control of a
United States person if the person--
(1) is on the list required by section 4(a); or
(2) acts as an agent of or on behalf of a person on that
list in a matter relating to the activity for which the person
was added to that list.
(c) Waiver for National Interests.--The Secretary of the Treasury
may waive the application of subsection (a) or (b) if the Secretary
determines that such a waiver is in the national interests of the
United States. Upon granting such a waiver, the Secretary shall provide
to the appropriate congressional committees notice of, and a
justification for, the waiver.
(d) Enforcement.--
(1) Penalties.--A person that violates, attempts to
violate, conspires to violate, or causes a violation of this
section or any regulation, license, or order issued to carry
out this section shall be subject to the penalties set forth in
subsections (b) and (c) of section 206 of the International
Emergency Economic Powers Act (50 U.S.C. 1705) to the same
extent as a person that commits an unlawful act described in
subsection (a) of such section.
(2) Requirements for financial institutions.--
(A) In general.--Not later than 120 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall prescribe regulations to require each
financial institution that is a United States person--
(i) to perform an audit of the assets
within the possession or control of the
financial institution to determine whether any
of such assets are required to be frozen
pursuant to subsection (b); and
(ii) to submit to the Secretary--
(I) a report containing the results
of the audit; and
(II) a certification that, to the
best of the knowledge of the financial
institution, the financial institution
has frozen all assets within the
possession or control of the financial
institution that are required to be
frozen pursuant to subsection (b).
(B) Penalties.--The penalties provided for in
sections 5321(a) and 5322 of title 31, United States
Code, shall apply to a financial institution that
violates a regulation prescribed under subparagraph (A)
in the same manner and to the same extent as such
penalties would apply to any person that is otherwise
subject to such section 5321(a) or 5322.
(e) Regulatory Authority.--The Secretary of the Treasury shall
issue such regulations, licenses, and orders as are necessary to carry
out this section.
SEC. 7. REPORT TO CONGRESS.
Not later than 180 days after the date of the enactment of this
Act, and annually thereafter, the Secretary of State and the Secretary
of the Treasury shall submit to the appropriate congressional
committees a report on--
(1) the actions taken to carry out this Act, including--
(A) the number of times and the circumstances in
which persons described in section 4(a) have been added
to the list required by that section during the year
preceding the report; and
(B) if few or no such persons have been added to
that list during that year, the reasons for not adding
more such persons to the list; and
(2) efforts to encourage the governments of other countries
to impose sanctions that are similar to the sanctions imposed
under this Act.
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