Amid a global assault on human rights stretching from Belarus to Hong Kong to Yemen, the European Union signaled yesterday that it may act to deter corrupt kleptocrats and state abusers by hitting them where it hurts: their assets.
- Europe's chief executive Ursula von der Leyen revealed in her first-ever State of the Union speech that she will bring forth a European Magnitsky Act, a sanctions framework modeled after a U.S. law that restricts malign actors' access to travel and the global financial system.
Why it matters: For all the ridicule it’s earned as a bureaucracy-addled bloc with a penchant for "strongly worded" statements, the EU is still the world’s largest single market area and a leading promoter of democratic values.
The big picture: Getting the EU on board would be a major victory for Bill Browder, an investor and activist who has spent the past 10 years lobbying world governments to pass sanctions legislation in the name of his late tax adviser, Sergei Magnitsky.
- Browder's Hermitage Capital was once the largest foreign investor in Russia, where his broadsides against corporate corruption made him a thorn in the side of the oligarchs.
- His visa was revoked in 2005 and his offices were later raided by Russian authorities as part of an apparent tax fraud investigation. Browder commissioned Magnitsky, then a 35-year-old lawyer, to figure out what happened.
- Magnitsky went on to uncover a massive fraud scheme allegedly involving Russian officials. His testimony against the Russian state resulted in his 11-month detention, torture and eventual death in prison in 2009.
Browder's decade-long anti-corruption campaign in the wake of Magnitsky's death yielded new sanctions frameworks in the U.S. (2012 and expanded in 2016), Canada (2015), the Baltic states (2016–2018), the U.K. (2018) and Kosovo (2020). He is likely the most wanted man in Russia.
What they're saying: Browder has called a European Magnitsky Act "probably the most devastating thing that could happen to the Putin regime" given the property and assets that key players own in Europe.
- He told me the legislation "has been held up for almost a decade by various member states and politicians who wanted to either please or appease Putin."
- But after the poisoning last month of fellow Putin critic Alexei Navalny with a nerve agent known to be a calling card of the Russian security services, Browder says those people have "disappeared into the woodwork."
- Note: Navalny is awake in a German hospital and posting on Instagram after two weeks in a medically induced coma. He plans to return to Russia.
Yes, but: Some experts warn that money laundering loopholes in the international financial system render Magnitsky laws ineffective, especially in the U.K. And questions still remain about the EU's willingness to stand up to China, the world's second-largest economy and one of its worst human rights abusers.
Between the lines: If the EU does move forward with an assets-focused sanctions law, Browder tells me the first targets should be the people who killed Magnitsky — followed swiftly by the perpetrators of the Rohingya genocide in Myanmar, the operators of mass detention camps in Xinjiang, and the authorities cracking down on protests in Hong Kong and Belarus.
What to watch: The EU's chief diplomat has called for the sanctions law to be named the "Navalny Act."