[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.
                                 <all>