[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1039 Reported in Senate (RS)]

                                                       Calendar No. 469
112th CONGRESS
  2d Session
                                S. 1039

                          [Report No. 112-191]

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, Mr. Wicker, Mr. Udall of New 
Mexico, Mr. Casey, Mrs. Boxer, Mr. Sessions, Mr. Menendez, Mr. Inhofe, 
 Mr. Graham, Mr. Risch, Mr. Blunt, Mr. Cornyn, Mr. Coons, Mr. DeMint, 
Mr. Wyden, Ms. Collins, Mr. Schumer, Mr. Coburn, Mr. Brown of Ohio, Mr. 
  Lee, Mr. Burr, Mr. Harkin, Mr. Johnson of Wisconsin, Mr. Thune, Ms. 
 Cantwell, Ms. Snowe, and Mr. Grassley) introduced the following bill; 
which was read twice and referred to the Committee on Foreign Relations

                             July 23, 2012

                Reported by Mr. Kerry, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Sergei Magnitsky Rule of 
Law Accountability Act of 2011''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress finds the following:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) The Russian Federation--</DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (C) is bound by the legal obligations set 
                forth in the European Convention on Human 
                Rights.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (9) The politically motivated nature of the 
        persecution of Mr. Magnitsky is demonstrated by--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.''.</DELETED>
        <DELETED>    (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.''.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.''.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>

<DELETED>SEC. 3. DEFINITIONS.</DELETED>

<DELETED>    In this Act:</DELETED>
        <DELETED>    (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).</DELETED>
        <DELETED>    (2) Appropriate congressional committees.--The 
        term ``appropriate congressional committees'' means--</DELETED>
                <DELETED>    (A) the Committee on Financial Services, 
                the Committee on Foreign Affairs, and the Committee on 
                the Judiciary of the House of Representatives; 
                and</DELETED>
                <DELETED>    (B) the Committee on Banking, Housing, and 
                Urban Affairs, the Committee on Foreign Relations, and 
                the Committee on the Judiciary of the Senate.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (4) United states person.--The term ``United 
        States person'' means--</DELETED>
                <DELETED>    (A) a United States citizen or an alien 
                lawfully admitted for permanent residence to the United 
                States; or</DELETED>
                <DELETED>    (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.</DELETED>

<DELETED>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.</DELETED>

<DELETED>    (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--</DELETED>
        <DELETED>    (1)(A) is responsible for the detention, abuse, or 
        death of Sergei Magnitsky;</DELETED>
        <DELETED>    (B) participated in efforts to conceal the legal 
        liability for the detention, abuse, or death of Sergei 
        Magnitsky; or</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (2) is responsible for extrajudicial killings, 
        torture, or other gross violations of human rights committed 
        against individuals seeking--</DELETED>
                <DELETED>    (A) to expose illegal activity carried out 
                by officials of the Government of the Russian 
                Federation; or</DELETED>
                <DELETED>    (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.</DELETED>
<DELETED>    (b) Updates.--The Secretary of State shall update the list 
required by subsection (a) as new information becomes 
available.</DELETED>
<DELETED>    (c) Notice.--The Secretary of State shall--</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 5. INADMISSIBILITY OF CERTAIN ALIENS.</DELETED>

<DELETED>    (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).</DELETED>
<DELETED>    (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).</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 6. FINANCIAL MEASURES.</DELETED>

<DELETED>    (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.</DELETED>
<DELETED>    (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--
</DELETED>
        <DELETED>    (1) is on the list required by section 4(a); 
        or</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (d) Enforcement.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Requirements for financial institutions.--
        </DELETED>
                <DELETED>    (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--</DELETED>
                        <DELETED>    (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</DELETED>
                        <DELETED>    (ii) to submit to the Secretary--
                        </DELETED>
                                <DELETED>    (I) a report containing 
                                the results of the audit; and</DELETED>
                                <DELETED>    (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).</DELETED>
                <DELETED>    (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.</DELETED>
<DELETED>    (e) Regulatory Authority.--The Secretary of the Treasury 
shall issue such regulations, licenses, and orders as are necessary to 
carry out this section.</DELETED>

<DELETED>SEC. 7. REPORT TO CONGRESS.</DELETED>

<DELETED>    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--</DELETED>
        <DELETED>    (1) the actions taken to carry out this Act, 
        including--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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</DELETED>
        <DELETED>    (2) efforts to encourage the governments of other 
        countries to impose sanctions that are similar to the sanctions 
        imposed under this Act.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sergei Magnitsky Rule of Law 
Accountability Act of 2012''.

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; and
                    (B) is a party to the Convention against Torture 
                and Other Cruel, Inhuman or Degrading Treatment or 
                Punishment, the International Covenant on Civil and 
                Political Rights, the United Nations Convention against 
                Corruption, and the European Convention on Human 
                Rights.
            (3) In becoming parties to human rights treaties, 
        governments voluntarily undertake international obligations to 
        respect and encourage certain fundamental rights and freedoms 
        of their citizens. The protection and encouragement of human 
        rights throughout the world is an important objective of United 
        States foreign policy.
            (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) In light of the importance of legitimate and 
        transparent public institutions and the serious negative 
        effects that corruption has on the efforts of the United States 
        to strengthen democratic institutions and free market systems, 
        Presidential Proclamation 7750 of January 12, 2004, allows the 
        Secretary of State to suspend the entry into the United States 
        of aliens who are suspected of participating in corrupt 
        practices.
            (9) 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.
            (10) 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.
            (11) 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.
            (12) 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.''.
            (13) On July 6, 2011, President Medvedev's Human Rights 
        Council announced the results of its independent investigation 
        into the death of Sergei Magnitsky. The Human Rights Council 
        concluded that Sergei Magnitsy's arrest and detention was 
        illegal, he was denied access to justice by the courts and 
        prosecutors of the Russian Federation, he was investigated by 
        the same law enforcement officers whom he had accused of 
        stealing Hermitage Fund companies and illegally obtaining a 
        fraudulent $230,000,000 tax refund, he was denied necessary 
        medical care in custody, he was beaten by 8 guards with rubber 
        batons on the last day of his life, and the ambulance crew that 
        was called to treat him as he was dying was deliberately kept 
        outside of his cell for one hour and 18 minutes until he was 
        dead. The report of the Human Rights Council also states the 
        officials falsified their accounts of what happened to Sergei 
        Magnitsky and, 18 months after his death, no officials had been 
        brought to trial for his false arrest or the crime he 
        uncovered.
            (14) The second trial, verdict, and sentence against former 
        Yukos executives Mikhail Khodorkovsky and Platon Lebedev evoke 
        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.
            (15) 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.''.
            (16) 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.
            (17) 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 President Ramzan Kadyrov, or of seeking to 
        obtain, exercise, defend, or promote internationally recognized 
        human rights and freedoms.
            (18) The people of the Russian Federation, like people 
        everywhere, deserve to have their human rights and fundamental 
        freedoms respected. Human rights and fundamental freedoms are 
        inalienable and universal in character and thus bind all 
        states.

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 Armed Services, the Committee 
                on Financial Services, the Committee on Foreign 
                Affairs, the Committee on Homeland Security, and the 
                Committee on the Judiciary of the House of 
                Representatives; and
                    (B) the Committee on Armed Services, the Committee 
                on Banking, Housing, and Urban Affairs, the Committee 
                on Foreign Relations, the Committee on Homeland 
                Security and Governmental Affairs, and the Committee on 
                the Judiciary of the Senate.
            (3) Financial institution.--The term ``financial 
        institution'' has the meaning given that term 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 AND OTHER GROSS VIOLATIONS 
              OF HUMAN RIGHTS.

    (a) In General.--Not later than 120 days after the date of the 
enactment of this Act, the Secretary of State, in consultation with the 
Secretary of the Treasury, shall submit to the appropriate 
congressional committees a list of each person the Secretary of State 
determines--
            (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;
            (C) benefitted financially from the detention, abuse, or 
        death of Sergei Magnitsky; or
            (D) was involved in the criminal conspiracy uncovered by 
        Sergei Magnitsky;
            (2) is responsible for extrajudicial killings, torture, or 
        other gross violations of internationally recognized 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, anywhere in the world; 
                or
            (3) acted as an agent of or on behalf of a person in a 
        matter relating to an activity described in paragraph (1) or 
        (2).
    (b) Updates.--The Secretary of State shall update the list required 
by subsection (a) as new information becomes available.
    (c) Removal From List.--A person shall be removed from the list 
required by subsection (a) if the Secretary of State determines that 
the person did not engage in the activity for which the person was 
added to the list.
    (d) Form of List; Public Availability.--
            (1) In general.--Except as provided in paragraph (2), the 
        list required by subsection (a) shall be submitted in 
        unclassified form.
            (2) Classified annex.--The list required by subsection (a) 
        may include a classified annex if the Secretary of State--
                    (A) determines that it is necessary for the 
                national security interests of the United States to do 
                so; and
                    (B) prior to submitting the list including a 
                classified annex, provides to the appropriate 
                congressional committees notice of, and a justification 
                for, including each person in the classified annex.
            (3) Review of classified annex.--Not later than 300 days 
        after the date of the enactment of this Act, and annually 
        thereafter, the Secretary shall--
                    (A) review the classified annex, if any, included 
                in the list required by subsection (a); and
                    (B) provide to the appropriate congressional 
                committees a justification for continuing to include 
                each person in the classified annex.
            (4) Public availability of unclassified portion.--The 
        unclassified portion of the list required by subsection (a) 
        shall be published in the Federal Register.
    (e) Requests by Chairperson and Ranking Member of Appropriate 
Congressional Committees.--
            (1) In general.--Not later than 120 days after receiving a 
        written request from the chairperson and the ranking member of 
        one of the appropriate congressional committees with respect to 
        whether a person meets the criteria for being added to the list 
        required by subsection (a), the Secretary of State shall submit 
        a response to the committee the chairperson and ranking member 
        of which made the request with respect to whether or not the 
        Secretary determines that the person meets those criteria.
            (2) Form.--The Secretary of State may submit a response 
        required by paragraph (1) in classified form if the Secretary 
        determines that it is necessary for the national security 
        interests of the United States to do so.
    (f) Nonapplicability of Confidentiality Requirement With Respect to 
Visa Records.--The Secretary of State shall publish the list required 
by subsection (a) without regard to the requirements of section 222(f) 
of the Immigration and Nationality Act (8 U.S.C. 1202(f)) with respect 
to confidentiality of records pertaining to the issuance or refusal of 
visas or permits to enter the United States.

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 Security Interests.--The Secretary of State 
may waive the application of subsection (a) or (b) in the case of an 
alien if--
            (1) the Secretary determines that such a waiver--
                    (A) is necessary to permit the United States to 
                comply with the Agreement between the United Nations 
                and the United States of America regarding the 
                Headquarters of the United Nations, signed June 26, 
                1947, and entered into force November 21, 1947; or
                    (B) is in the national security interests of the 
                United States; and
            (2) prior to granting such a waiver, the Secretary provides 
        to the appropriate congressional committees notice of, and a 
        justification for, the waiver.

SEC. 6. FINANCIAL MEASURES.

    (a) Freezing of Assets.--The Secretary of the Treasury shall, 
pursuant to the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq.), freeze and prohibit all transactions in all property and 
interests in property of a person that the Secretary, in consultation 
with the Secretary of State, determines has engaged in an activity 
described in paragraph (1), (2), or (3) of section 4(a) if such 
property and interests in property are in the United States, come 
within the United States, or are or come within the possession or 
control of a United States person.
    (b) Waiver for National Security Interests.--The Secretary of the 
Treasury may waive the application of subsection (a) if the Secretary 
determines that such a waiver is in the national security interests of 
the United States. Prior to granting such a waiver, the Secretary shall 
provide to the appropriate congressional committees notice of, and a 
justification for, the waiver.

SEC. 7. REPORT TO CONGRESS.

    Not later than 1 year 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.
                                                       Calendar No. 469

112th CONGRESS

  2d Session

                                S. 1039

                          [Report No. 112-191]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             July 23, 2012

                       Reported with an amendment