[Joint House and Senate Hearing, 115 Congress]
[From the U.S. Government Publishing Office]






115th Congress                                Printed for the use of the 
2nd Session             Commission on Security and Cooperation in Europe 
________________________________________________________________________



 
                         How to Get Human Rights Abusers 
                        and Kleptocrats Sanctioned Under 
                             the Global Magnitsky Act








[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]









                                   MARCH 13, 2018



                             Briefing of the 
           Commission on Security and Cooperation in Europe 
________________________________________________________________________

                            Washington: 2018









               Commission on Security and Cooperation in Europe
                         234 Ford House Office Building
                              Washington, DC 20515
                                   202-225-1901
                              [email protected]
                              http://www.csce.gov
                               @HelsinkiComm





                  Legislative Branch Commissioners



              HOUSE                                SENATE
CHRISTOPHER H. SMITH, New Jersey       ROGER WICKER, Mississippi,      
          Co-Chairman                     Chairman
ALCEE L. HASTINGS, Florida             BENJAMIN L. CARDIN. Maryland
ROBERT B. ADERHOLT, Alabama            JOHN BOOZMAN, Arkansas
MICHAEL C. BURGESS, Texas              CORY GARDNER, Colorado
STEVE COHEN, Tennessee                 MARCO RUBIO, Florida
RICHARD HUDSON, North Carolina         JEANNE SHAHEEN, New Hampshire
RANDY HULTGREN, Illinois               THOM TILLIS, North Carolina
SHEILA JACKSON LEE, Texas              TOM UDALL, New Mexico
GWEN MOORE, Wisconsin                  SHELDON WHITEHOUSE, Rhode Island

                        Executive Branch Commissioners

                           DEPARTMENT OF STATE 
                          DEPARTMENT OF DEFENSE 
                          DEPARTMENT OF COMMERCE





ABOUT THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE




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ABOUT THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE

    The Commission on Security and Cooperation in Europe, also known as 
the Helsinki Commission, is a U.S. Government agency created in 1976 to 
monitor and encourage compliance by the participating States with their 
OSCE commitments, with a particular emphasis on human rights.
    The Commission consists of nine members from the United States 
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         How to Get Human Rights Abusers and Kleptocrats 
               Sanctioned Under the Global Magnitsky Act
                             
                             _______________
                             
                             March 13, 2018


                                                                          Page
                              PARTICIPANTS

Kyle Parker, Chief of Staff, Commission on Security and Cooperation 
 in Europe .............................................................     1 
Paul Massaro, Policy Advisor, Commission on Security and Cooperation 
 in Europe .............................................................     2 
Bill Browder, Founder and Director, Global Magnitsky Justice Campaign ..     3 
Rob Berschinski, Senior Vice President, Human Rights First, and former 
 Deputy Assistant Secretary of State ...................................     6 
Mark Dubowitz, CEO, Foundation for Defense of Democracies...............    12 
Josh White, Director of Policy and Analysis, The Sentry, formerly 
with the Department of Treasury ........................................    12 
Adam Smith, Partner, Gibson, Dunn & Crutcher, formerly with the National 
 Security Council and Department of Treasury ...........................    13 
Brad Brooks-Rubin, Managing Director, The Sentry, formerly with the 
 Departments of State and Treasury .....................................    23 
 
                                APPENDIX

Op-ed piece by Rob Berschinski .........................................    39 
Op-ed piece by Mark Dubowitz and Saeed Ghasseminejad ...................    47 
Slides presented by Bill Browder .......................................    49 












              How to Get Human Rights Abusers and Kleptocrats 
                 Sanctioned Under the Global Magnitsky Act
                              ----------                              

                             March 13, 2018

           Commission on Security and Cooperation in Europe 
                        Washington, DC


    The briefing was held at 3:05 p.m. in Room SVC 212-10, Capitol 
Visitor Center, Washington, DC, Kyle Parker, Chief of Staff, Commission 
on Security and Cooperation in Europe, presiding.
    Panelists present: Kyle Parker, Chief of Staff, Commission on 
Security and Cooperation in Europe; Paul Massaro, Policy Advisor, 
Commission on Security and Cooperation in Europe; Bill Browder, Founder 
and Director, Global Magnitsky Justice Campaign; Rob Berschinski, 
Senior Vice President, Human Rights First, and former Deputy Assistant 
Secretary of State; Mark Dubowitz, CEO, Foundation for Defense of 
Democracies; Josh White, Director of Policy and Analysis, The Sentry, 
formerly with the Department of Treasury; Adam Smith, Partner, Gibson, 
Dunn & Crutcher, formerly with the National Security Council and 
Department of Treasury; and Brad Brooks-Rubin, Managing Director, The 
Sentry, formerly with the Departments of State and Treasury.

    Mr. Parker. We have an ambitious agenda, so we'll go ahead and 
begin. Good afternoon. My name is Kyle Parker, and on behalf of the 
Helsinki Commission's bipartisan, bicameral leadership, I welcome you 
all to today's public briefing.
    Our proceeds are being livestreamed, and we'll produce a formal 
U.S. Government transcript that will be published in hardcopy and 
posted on our website. We also intend to produce a condensed version of 
these proceedings highlighting specific points made by our panel in 
hopes that congressional staff and civil society will act on their 
expert advice, and thereby assist the U.S. Government in rigorously 
implementing the new sanctions authorities provided under the Global 
Magnitsky Act.
    The panel we have assembled here includes the leading intellectual 
architects of the Magnitsky sanctions, as well as many of our Iran 
sanctions programs. These people succeeded in creating unlikely and 
durable coalitions in and out of government, and accomplished what many 
had previously thought impossible. We're also honored to have a slate 
of former senior officials who recently served in the National Security 
Council, Department of State, and Department of Treasury, all of which 
are key to coordinating and implementing U.S. sanctions. These 
panelists all have direct experience implementing Magnitsky sanctions, 
and I'm sure will help all of us to have a more realistic understanding 
of what Global Magnitsky can and can't be used for, and most 
importantly how to use it effectively.
    In December 2017, the Trump administration imposed the first 
sanctions under the Global Magnitsky Act. As some of you may know, 
Global Magnitsky, unlike Russia Magnitsky, is a permissive authority, 
meaning that the administration could easily have chosen to ignore it. 
That it did not--that it came out with what was widely regarded as a 
robust first list, and that we continue to hear from executive branch 
colleagues that the administration intends to impose Global Magnitsky 
sanctions on a regular basis, even quarterly--is a strong signal of 
what many of us hope will be regular and rigorous implementation of 
this new law, and powerful confirmation of what can be accomplished 
when public interest and pressure influences government to use its 
significant powers.
    Finally, before turning the microphone over to my colleague Paul 
Massaro, who will moderate our discussion, let me say a few words about 
the Helsinki Commission's specific interest in this topic.
    First, the Magnitsky sanctions began at the Helsinki Commission in 
a room like this just around the corner in the Capitol Visitors Center 
in 2009, when we first heard the story of Sergei Magnitsky, who at the 
time was being held under increasingly torturous conditions in one of 
Russia's infamous pretrial detention centers.
    Second, the commission has a mandate to monitor the compliance of 
the OSCE's rich body of human rights commitments across the expanse of 
the OSCE's 57 participating States. And the participating States all 
agree to the abstract notion that they should keep their word, but it's 
only when we raise specific cases that consensus starts to break down 
and things begin to get interesting. Compliance with human commitments 
always and only happens in the individual case. And the Global 
Magnitsky Act places the United States on the side of the individual 
victim whose rights have been curtailed or even denied, just as it acts 
to protect our country from becoming a haven for murderers, torturers, 
and corrupt officials.
    Thank you. And with that, I turn it over to Paul.
    Mr. Massaro. Thank you very much, Kyle, for those powerful opening 
remarks.
    My name is Paul Massaro. I advise on international economic policy 
and anti-corruption at the commission, which means I have the privilege 
of working on the Global Magnitsky Act implementation here.
    Today's event will proceed a little bit differently than our normal 
briefings. We have these wonderful panelists, and after everyone's 
presentation we will immediately open up with a Q&A segment. That means 
we're going to have a lot more Q&A today than we generally do so as to 
fulfill what we envision more of as a workshop or a roundtable than our 
standard briefing format.
    So when you ask a question, the first presenter or the presenter 
that did the presentation you're asking on will provide an answer, 
after which I encourage any panelist to drop in with thoughts on that 
topic. But let's make a concerted effort sort of not to jump to the 
next presentation and stay on topic.
    And also in your folders you'll find a variety of materials and op-
eds from today's panelists, and also a few items that we've put 
together to help you navigate both the Global Magnitsky Act and the 
executive order from the administration that sort of loosened the 
standard under which sanctions can be applied. But we'll get into that 
more with our great panelists today.
    So, with that, I'll hand it over to Bill Browder. You'll start us 
off.
    Thank you.
    Mr. Browder. Well, welcome, everybody. Kyle, thank you for 
organizing this, and I'm looking forward to hearing all my colleagues 
speaking about this.
     Kyle mentioned that the whole process started in a room like this. 
It actually started with me in a room like this presenting the story of 
Sergei Magnitsky to the Helsinki Commission. And we spent I guess what 
could be described as--or should I say the process moved in lightning 
speed by the definition of Washington, from an initial concept to a law 
named the Magnitsky Act of 2012. But it went from basically a piece of 
legislation introduced in October 2010 to a piece of legislation passed 
in December 2012.
    The moment that it was passed, we realized that we had only gotten 
part of the way there, because having a law in place doesn't mean 
anything unless you can actually implement the law. And then a 
struggle--or a learning curve, depending on how you want to describe 
it--then began about how to get the U.S. Government to enforce the 
Magnitsky Act.
    And so I'm here today to share with you a little bit about how we 
succeeded in getting some of the people who were responsible for the 
false arrest, torture, and murder of Sergei Magnitsky onto the 
Magnitsky list. And hopefully, in the process of giving you a little 
bit of background on what we did and how we did it, it will give you 
ideas on how to present information about other people to get them on 
the list.
    And so let's see if we could just go to the first slide. \1\
---------------------------------------------------------------------------
\1\  Slides are pictured in the Appendix portion of this briefing.
---------------------------------------------------------------------------
    Let me just briefly take you though a very abbreviated version of 
the story so you can understand what we're trying to do. The Magnitsky 
story all originated with a raid on my office in Moscow where the 
police seized a bunch of documents in the office--and you can see a 
bunch of vans and boxes in this chart in back of me.
    And then, if we go to the next slide.
    The documents were then used to steal $230 million of taxes that my 
firm paid to the Russian Government.
    And if we go to the next slide.
    And so Sergei Magnitsky testified against the police officers who 
committed this crime.
    And if we go to the next slide.
    And then those same police officers arrested Sergei Magnitsky.
    And go to the next slide.
    They put him in prison. They tortured him for 358 days.
    Next slide.
    And then they killed him on November 16th, 2009. So this was the 
crime that we first reported to the Helsinki Commission--to Senator 
Cardin, to Kyle Parker--and this was the crime that eventually led to 
the passage of the Magnitsky Act.
    If you go to the next slide.
    So the Magnitsky Act--and I'm speaking now about the Russia 
Magnitsky Act, which I have more familiarity with--but in terms of the 
takeaways from my presentation, the same thing could be applied toward 
the Global Magnitsky Act. But the Russian Magnitsky Act basically 
defined in very clear terms who was eligible for being sanctioned. And 
I'll just read it out to you. It said that--there's two categories. 
There's Magnitsky-related, and then there's other human rights related.
    So, on the Magnitsky-related, basically, the law said anyone who's 
``responsible for the detention, abuse, or death of Sergei Magnitsky, 
participated in the efforts to conceal the legal liability for the 
detention, abuse, or death, benefited financially from the detention, 
abuse, or death, or was involved in the criminal conspiracy.'' So this 
was the Magnitsky-related wording in the Act.
    And then the other wording, which applies to everybody else, ``is 
responsible for extrajudicial killings, torture, or other gross 
violations of internationally recognized human rights committed against 
individuals,'' which is the relevant paragraph for everybody other than 
the people in my situation.
    So we then looked--we had a mountain of documentary evidence, and 
we looked at the documentary evidence. We said, how does our 
documentary evidence fall into A, B, C, or D? And we ended up coming up 
with a list of 282 people that fall into one of those categories.
    And then the information we provided--and this is probably the most 
important slide, make sure we have it there--is the name of the human 
rights abuser--you have to know who actually did it. Interestingly, the 
second thing, the date of birth--this may look sort of strange and 
simplistic and obvious to you, but in places where we didn't have dates 
of birth people didn't get sanctioned. And so this is a real how-to: If 
you want to get someone sanctioned, make sure you know their date of 
birth. In the case of our situation, almost everybody was in 
government, and so what their position was in government. And then the 
category of the violation under the law--was it A, B, C, or D? What 
role they played. The specific details of the human rights abuse. And 
then, most importantly, what was the documentary evidence that we could 
show that they did what they did?
    And so, if you go to the next slide.
    This is--there's no way I can explain this to you looking at it 
because the print is too small, but this is what we actually submitted 
to the State Department and Treasury Department. And I believe that 
this presentation should be in your package, and if it's not then 
certainly the Helsinki Commission will put it in their briefing 
afterwards. But this is a pretty good template of what you can use to 
submit--to make submissions to the U.S. Government on this--on your 
cases.
    And I will just share with you, just to give you an example of one 
person that we did this to, just to give you an idea of what was 
included, if you go to the next slide.
    So one of the people who was a real bad guy in our story was a guy 
named Artem Kuznetsov. He was a police officer, and he was the guy who 
fabricated a criminal case against Sergei and arrested him. And so what 
do we have here? We actually submitted a document here showing his 
involvement in the crime by showing the seals of Hermitage companies 
that were seized and his signature on it.
    Next page.
    We have, on the next page, a document which shows that he was 
appointed to investigate Sergei Magnitsky after Sergei testified 
against him.
    On the next page, we have a document--and it's the one that's 
circled--where he was ordered to arrest Sergei Magnitsky.
    And as a result of these documents--if we go to the next page, on 
page 14--you'll see that his name is now the one that's circled in red.
    I should point out that a lot of people mistakenly think that if 
you have friends in Washington you can just come and denounce people 
you don't like in whatever countries and they'll be sanctioned, and I 
can tell you that there's nothing further from the truth. In my case, 
after having a law named after Sergei Magnitsky, after producing this 
type of evidence, the U.S. Government then had to go out and try to 
find an independent source to verify whether this information was 
correct. And so every single thing that we provided to the U.S. 
Government had to be independently checked. And that's why, at the 
moment, there's only about 39 people on the Russian Magnitsky list out 
of 282 people, because there's still a very long and arduous 
verification exercise that people have to go through in the government 
before they put people on the Magnitsky list.
    So I would say that it's an extremely powerful tool, and it's a 
tool that's hard to implement. It's taken us a number of years to get 
those 39 people on the list. It requires absolute clarity of what the 
role and crime that the person did, and evidence that the person did 
it. And it's sparingly used, so if you want to get somebody sanctioned, 
you should expect to spend a lot of time trying to get them sanctioned. 
It's not going to happen easily. I'm hoping that as time goes on it 
becomes a more pedestrian exercise and there's more resources allocated 
to doing it, but it's still early days and hard to do. And so one's 
expectations shouldn't be high entering into this process.
    I would also say--and this is important--that just the public 
discussion about the intention to sanction somebody is also a valuable 
tool in a human rights fight. You don't necessarily have to expect on 
day one for them to be sanctioned, but if one can publicize the roles 
that these people that have committed human rights abuses have done, if 
you then can get people interested in Washington--Members of Congress--
in repeating and ventilating those stories and calling on the State 
Department and the Treasury Department to do something, just the 
uncertainty of the target person sometimes has the same effect of 
actually sanctioning them.
    So that's my prepared remarks. I'm happy to give anyone any advice, 
questions, anything.
    Mr. Massaro. Thanks so much, Bill, for that detailed presentation. 
Could I just ask the first question here, and then we'll open it up to 
the floor? We have about 10 minutes for questions with Bill here.
     I couldn't agree with you more that the public discussion is a 
very, very powerful tool in and of itself. But is that not also 
dangerous? Does that also open you up to lawfare-style attacks? And, if 
so, you know, what can one to do protect themselves from something like 
that? I understand you've faced stuff like this before yourself.
    Mr. Browder. Indeed. And, in fact, other people on the panel have 
faced attacks by well-funded Russians or Ukrainian Russians who are 
doing this kind of stuff.
    We have been sued. I was sued by Pavel Karpov, who was an officer 
in the Interior Ministry who was earning a few hundred dollars a month, 
who hired Andrew Caldecott QC, the top lawyer in libel in London, for a 
thousand pounds an hour to sue me, and they spent millions of pounds 
suing me. We won, but it wasn't pleasant and it cost a lot of money.
    I would argue that it is a difficult issue. When people are well 
funded, they can try to shut you up. I would say in the United States 
it's harder to sue for libel and there's more of a freedom of speech 
than there is in the U.K., where I live.
    I would also tell you that there is one place where you're 
protected absolutely, which is in congressional hearings. If you 
ventilate these issues in congressional hearings, there is an exemption 
from libel. It's called legal privilege, where you can't be sued for 
what you say in a congressional hearing. So that is one way to get 
around that particular issue.
    But there's no doubt that when you're fighting evil, evil fights 
back, and particularly well-funded evil. And I've always told people 
that it's much easier to go through life trying to do good than it is 
to try to fight evil because of evil fighting back, but actually 
fighting evil probably generates a hundred times the amount of better 
outcome than just trying to do good.
    Mr. Massaro. Thank you so much, Bill.
    Do we have any questions from the audience? Okay, well--oh, right 
there. Please.
    Questioner. My name is Rosie Berman. I'm with the Tom Lantos Human 
Rights Commission.
    My question is about compiling this evidence. I know sometimes when 
you're looking for documentation in another country, particularly a 
country like Russia, have you ever had trouble acquiring the documents 
you need?
    Thank you.
    Mr. Browder. Well, I think every case is different. Certain 
countries are more bureaucratic than others. In Russia, there is an 
incredible, incredible bureaucracy in the law enforcement, and as a 
result of that bureaucracy one can gather lots of documents because 
there's all these procedures you can go through. But in other sort of 
lesser-developed countries than Russia, sometimes there's no documents 
at all.
    There's been some terrible atrocities where nothing is documented. 
I don't know how one would gather documents of the Rohingya situation 
and things like that, where people are just fleeing burning villages 
and so on; or the mass rape of Yazidi women. There's a lot of terrible 
things that are hard to document, and the government does require 
documentation or credible witness testimony. And so it's not easy.
    But it's not easy to prosecute any crime. And it's important, to 
the extent that one can think about it, when you're getting upset about 
whatever it is that's upsetting you, whatever atrocity you're 
witnessing, it's always important to think about, how am I going to 
document this, what evidence will I be able to present, because just 
the outrage about what happened is not enough to get anybody to do 
anything. That has to be independently and credibly verifiable.
    Mr. Massaro. Rob would like to jump in on this.
    Mr. Berschinski. Yes. Just to follow Bill's point on evidence for a 
second, on the human rights side you mentioned the case of atrocities 
against the Rohingya, for instance. There are going to be some 
instances in which there's much less of a paper trail than, for 
instance, much of what Bill's put together in the Russia context over 
the years. In cases, as with the Rohingya or violations against the 
Yazidis, a lot of what the government is going to be looking for 
relate, for instance, to personal testimonies from victims. So we've 
had organizations that have supplied information that have been 
gathered after numerous structured interviews with victims--sometimes 
medical reports for those victims that have been able to seek medical 
attention, and corroborated evidence that points to specific abusers 
and people higher up in the chains of command of those abusers.
    So the job of non-governmental organizations (NGOs) who want to 
turn over information to the government is to combine those firsthand 
accounts with a solid understanding of essentially the chain of 
command, so that the government theoretically can go after not only the 
person wielding the baton or the Kalashnikov, but also the person that 
ordered the crime from above. And again, just to reiterate what Bill 
mentioned, the U.S. Government is always looking for multiple 
corroborating sources. So for those that are, again, using the case of 
the Rohingya, doing interviews and bringing forward victim testimonies, 
to the extent of what your organization is doing, can be combined with, 
say, the work of U.N. special rapporteurs or other objective, credible 
authorities--putting that basket of information is what's going to make 
for the most compelling case.
    Mr. Massaro. Thanks, Rob. And if anyone would like to jump in on 
anyone's question, please just lean back and give me a little signal. 
Thanks.
    Do we have other questions for Bill? Oh, wow. Okay, right there, 
please.
    Questioner. I'm Dr. Toac Mending Taout [ph], Boat People SOS.
    First, thank you, Bill, for introducing me to Marcus Kolga in 
Canada. We worked together to get a similar bill passed in Canada. The 
question is, how can you take advantage of similar laws in other 
countries, now that you already have documented cases for use in the 
U.S. Government?
    Mr. Browder. I'm not sure I understand. How do I take advantage 
of----
    Questioner. Of the law, similar laws, such as the Magnitsky law in 
Canada----
    Mr. Browder. Right, right.
    Questioner.----a similar law in U.K. and Estonia and Lithuania.
    Mr. Browder. Okay, good question. First of all, just to summarize 
for those of you who don't know this, there are Magnitsky laws now that 
exist in seven countries. The United States was the first with Russian 
Magnitsky. It then went to Global Magnitsky in 2016. On the same day, 
the Estonian Government passed an Estonian Magnitsky Act. Five months 
later, the British Government passed a Magnitsky amendment to their 
criminal finance bill. Canada in October last year, Magnitsky. 
Lithuania, Latvia, and then most recently and totally unexpectedly 
Gibraltar.
    So I would argue--and we're now, trying to roll it out in 
Australia, France. We have hearings in the Swedish Parliament next 
week, in the Dutch Parliament. And so my hope is that this becomes a 
global standard, and it's done globally by all countries. Having said 
that, these are early days. It's very much of a guerilla war exercise. 
There's no consistency between the Magnitsky acts from country to 
country.
    I would say the two most similar ones are the United States and 
Canada. Canada has a very strong replica and even improvement in some 
areas on the U.S. Magnitsky Act. In both countries it applies visa 
sanctions and assets freezes. In Britain, they just do asset freezes 
and no visa bans at the moment. In Latvia, Lithuania, and Estonia they 
just do visa bans and no asset freezes. In Gibraltar it's just asset 
freezes. We currently have a piece of legislation going through the 
British Parliament that should upgrade the Magnitsky law to a full 
U.S.-Canada version.
    There is no process in Canada, yet, as far as I'm aware. I was 
pleased to see that the Canadian budget allocated $21 million to the 
Canadian Office of Sanctions, which means they can hire people and 
actually do this. But as far as I'm aware, there is no process. And in 
fact, there's no process here at America. I mean, this is the first 
attempt at creating some process, by creating some discussion which 
hopefully will lead to something more concrete.
    So the answer is, I don't know how to get anyone sanctioned in 
Canada. But hopefully we'll all figure it out together.
    Mr. Massaro. Thank you so much. We can take maybe two more 
questions, but then we have to move on. Any remaining time will be put 
into a general Q&A at the end. So if you have a burning question and 
you can hold it till the end, that's great. I know Kyle had a short 
question.
    Mr. Parker. I had a quick question. Kyle Parker, Helsinki 
Commission.
    Bill, you've had incredible success around the world in getting 
other parliaments to adopt this. I was wondering if you could just very 
quickly tell us your experience in pressing these questions in foreign 
parliaments versus in foreign ministries, as well if you could talk a 
little bit about how sort of getting these things out into the open, 
into the press, and on the record has made a decisive effect on the 
success of this campaign you are now a leader on.
    Mr. Browder. Good question. Let me just tell everybody here who has 
been victimized or represents victims of human rights abuses, don't 
expect any serious outcome just going to foreign ministries or state 
departments and saying: We've been victimized. We're really unhappy. 
It's not in the mandate of a foreign ministry of a government to do 
anything about human rights abuses. It all has to happen using pressure 
from the outside. And the pressure from the outside is what I've 
discovered is parliamentary pressure.
    So the job of a foreign minister or the secretary of state is to 
have diplomatic relations with all countries, whether they're good or 
bad. But it's not necessarily the job of an elected politician. And so 
it's very easy to tell a story of an atrocity to an elected politician, 
and then having them put pressure on the government. And so--and this 
comes back to designations as well--if you want to get somebody on the 
Global Magnitsky list, it helps a lot not just to go to the State 
Department, but to go to the press and to go to whatever politician you 
think cares about your issue, and get them to bring it, them to 
ventilate it, and them to regularly call on the government to see what 
they're doing about it.
    Because just by itself, going to the government I think will not 
have any impact, unless it's the most egregious case which has already 
been sort of accepted by the government as being something they want to 
do something about.
    Mr. Massaro. Well, that's actually a fantastic segue into our next 
presentation, from Rob Berschinski, on looking at sanctions in the 
context of a bilateral relationship and what you should be thinking 
about when you look to get someone sanctioned.
    Thanks.
    Mr. Berschinski. Great, thanks. And Kyle, Paul, thank you so much. 
Thanks to the Helsinki Commission for bringing us all together today.
     I'm going to build on what Bill just spoke about, and move the 
conversation away from evidence for a moment and talk about building 
political will. I and some of the other panelists are working with 
what's now roughly 70 NGOs, working globally to collaborate around 
providing evidentiary packages to the U.S. Government in the hope that 
it will make designations in countries around the world. But bringing 
together the sorts of evidence that Bill mentioned is only half of the 
equation.
    As he said, getting designations under Russia Magnitsky is very 
hard work. Well, it's doubly hard under Global Magnitsky. Because, as 
Kyle mentioned in his opening remarks, not only do you have to meet 
that evidentiary threshold, but you also have to convince the U.S. 
Government to take the action of making the sanctions designations, 
because the global law is elective while the Russia version of the law 
is mandatory. So before I dive into that topic, I'd be remiss if I 
didn't take the opportunity to say a few words about the alternative 
universe we'd be operating in if Global Magnitsky actually mirrored 
Russia Magnitsky in terms of being mandatory--given that we're seated 
in the one building on Earth that could actually do something about 
that difference. To do so, I just want to quote the executive order 
(EO) that President Trump signed back in December on Global Magnitsky, 
which affirms the following.
    Quote, ``Human rights abuses and corruption undermine the values 
that form an essential foundation of stable, secure, and functioning 
societies and have devastating impacts on individuals, weaken 
democratic institutions, degrade the rule of law, perpetuate violent 
conflicts, facilitate the activities of dangerous people, and undermine 
economic markets.'' The EO went on to say that, ``Therefore, the United 
States seeks to impose tangible and significant consequences on those 
who commit serious human rights abuses or engage in corruption, as well 
as to protect the financial system of the United States from abuse.'' 
And it then goes on to say that the president makes the determination 
that, quote, ``The serious human rights abuses and corruption around 
the world constitute an unusual extraordinary threat to the national 
security, foreign policy, and economy of the United States, triggering 
a national emergency which authorizes IEEPA (International Emergency 
Economic Powers Act)-based sanctions to deal with that threat.''
    So I just want to pause for a second and reflect on the power of 
those words that were issued by the administration a few months ago. 
What they say is that human rights violations and corruption undermine 
stable and secure societies, as well as economic markets, to such a 
degree that the appropriate response in a national emergency 
declaration that brings to bear extremely powerful and coercive 
economic tools. And my colleagues will speak about this in more depth 
momentarily. That's really strong stuff. And if the analysis is true--
and I tend to think it's true, and an overwhelming body of evidence 
from Syria to Russia to North Korea indicates that it's true--it should 
be a no-brainer that a tool like Global Magnitsky should be used 
frequently, if not actually made mandatory like the Russian version of 
the law.
    So while I'm here, I would urge those working at this end of 
Pennsylvania Avenue to think about ways in which they can strengthen 
the Global Magnitsky Act moving forward, in line with this logic. For 
today, Global Magnitsky is still elective which means, again, that the 
U.S. Government must be convinced not only that the evidentiary 
threshold has been met on a particular case, but that it's also in the 
U.S. national interest to sanction an individual or an entity. This, in 
turn, means that in order to maximize the changes that the U.S. 
Government takes action on a particular recommendation, NGOs, like 
mine, working to assemble evidentiary dossiers need to spend just as 
much care thinking about how to make the U.S. interest argument to the 
U.S. Government as they do making the evidentiary case. And that means 
showing impact from the perspective of the U.S. Government.
    Impact can be measured in a number of different ways. The most 
straightforward way is simply calculated in terms of the amount of 
assets frozen under the asset freeze portion of the law. The most 
compelling arguments toward the U.S. Government likely to also go 
beyond both assets frozen and simply making the point that the U.S. 
Government should act, because it says it stands against human rights 
violations and corruption. More sophisticated arguments can include why 
sanctioning a particular individual or entity can send a targeted 
message to a government, a faction of a government, or a particular 
military unit or a security service under a government, or isolate an 
individual spoiler or subcomponent or a government, or improve a 
regional security situation, or to provide leverage in a diplomatic 
discussion or a negotiation.
    Making the case in each of these scenarios requires the submitter 
to be cognizant of both geopolitical dynamics and the internal 
political dynamics within the country in which they're working. So if, 
for example, in a theoretical country, and hypothetical, it can be 
shown that anticorruption reformers, working from within and outside a 
given government, are genuinely working toward change, but are being 
stymied by an entrenched, corrupt old guard, a case can conceivably be 
made that by using Global Magnitsky to target certain individuals you 
can have an outsized effect beyond the immediate effect both on those 
individuals and the larger deterrent effect. Yet, even in this sort of 
hypothetical, the most sophisticated sorts of arguments are also going 
to need to account for the potential blowback inherent in what would 
inevitably be described by those targeting as external meddling.
    So in this hypothetical, the submitter might also want to say a few 
words about how a designation or designations could be structured to 
minimize the potential for such blowback, so as to empower reformers 
and civil society, and not necessarily hardliners or the old guard 
within a country. The same goes for a slightly different hypothetical, 
in which it's well understood that, say, commanders of an internal 
security service of a U.S. ally are consistently using torture or 
engaging in extrajudicial killings. One could make a case that a 
handful of Magnitsky designations, perhaps made only after diplomatic--
quiet diplomatic outreach and other warnings from the U.S. Government--
could sideline the worst offenders and open up space for a new 
approach.
    In this hypothetical, designations could be accompanied by a pledge 
from the United States that would accompany the designations of, for 
instance, additional security sector assistance, right? So you're 
marrying up the stick and the carrot, and telling that government that 
the action of the designations is not necessarily an aggressive step on 
behalf of the U.S. Government, not punitive, but is an attempt to 
bolster the country's security and stability in the long run. And, 
again, that's very sophisticated, tricky diplomatic activity. But it's 
the way this tool should be used in plenty of instances. And it's the 
way in which we could apply this tool to allies and friends of the 
United States, and not just those that are in an adversarial 
relationship with the United States.
    And then last, just to mention something Bill said earlier, in 
addition to making smart arguments toward U.S. Governments, advocates 
working in this space need to be sure to, of course, employ all the 
other tools in their toolbox. So that's letter writing, that's bringing 
on champions on the Hill and/or other noteworthy voices--anything that 
can be done to grow political will because, just as Bill said, at the 
end of the day the job of most U.S. diplomats is to maintain the 
bilateral relationship. And it's going to be exceedingly difficult to--
not impossible, as we saw through the designations that were released 
in December--but difficult to make this case. So public pressure is 
really also the key.
    Thanks.
    Mr. Massaro. Thank you so much, Rob.
    Let me ask about those designations made in December. I know that 
you led a coalition of NGOs and sort of offering some credible 
information. You guys were sort of the first wave of what we hope is 
many, many waves in this. Could you speak to your experience thinking 
about these sorts of issues while assembling that package and leading 
that coalition of NGOs?
    Mr. Berschinski. Yes, thanks. So in December the Trump 
administration, at roughly the 1-year point of the passage of the law, 
designated 52 individuals and entities. There were 13 primary 
designations on individuals, another 2 secondary individuals were 
designated, and then I think 37 related entities were also designated. 
As Kyle mentioned, I think most of those of us working on the outside 
felt like this was a successful first outcome. What we've seen over the 
course of the five or so years that the Russian version of the law has 
been in effect is that each year the U.S. Government has gotten, at 
least in my analysis, a little better at doing this, at setting up its 
process. And as you can imagine, the growth in complexity, from a law 
that looks at just one country to a law that conceivably can look at 
the 190-some-odd countries in the world, is exponentially more 
complicated.
    And so what we're facing, among other things, at the State 
Department and the Treasury Department, apart from political will 
narrowly defined, is also a bandwidth issue. There should be no doubt 
about it. This is very hard work. It's very labor intensive. I think 
what's in today's headlines should only underscore the fact that our 
friends at State, and to a lesser extent Treasury, are laboring under 
really difficult conditions right now. And there just aren't enough 
people to do a lot of this work, irrespective of some of the great 
information that's coming in from the outside. So if I could just make 
a plug on that point too. To those that are thinking about how to 
strengthen the law moving forward and what the Congress can be doing, 
language that earmarks, for instance, certain funds to make sure that 
this tool is used in the future would probably be money well-spent.
    In terms of what the groups that several of us coordinated over the 
course of the last year did, is we feel like it's better for human 
rights and anti-corruption NGOs to be working together to provide 
recommendations to the U.S. Government, than kind of inundating it with 
submissions from all over that are uncoordinated. So we're running a 
voluntary process in which groups agree to come together, bring these 
evidentiary packages, brainstorm how to make the most compelling case 
along the lines of what I just described, and hand over to the U.S. 
Government what we have. The government is under absolutely no 
obligation to take what we're giving them, but we're hopeful that what 
we can do is help them along the way in terms of doing some of the 
report that, as Bill mentioned, the U.S. Government then needs to 
corroborate.
    What we saw out of, say, those 13-odd individuals sanctioned in the 
last round is that, depending on how you count, roughly half of them 
were, I think it's safe to say, impacted by either Members of Congress 
or members of civil society, either directly or indirectly. So that's 
not to say that what NGOs did resulted in six or seven designations, 
but between what this group and others did, I think we can notch up a 
few wins.
    Mr. Massaro. Okay. Thanks so much, Rob. Could we open it to 
questions once again, for Rob? Please, right there. If you could please 
state your name and affiliation. Thank you.
    Questioner. Yes. Woody Barnett from [CCP?] in Pittsburgh.
    I was just wondering, what does the Helsinki Commission do to hold 
its member states accountable for the human rights abuses? The first 
speaker talked about some of the smaller states don't have the 
bureaucratic paper trails and all that. But what is the commission 
doing to address that?
    Mr. Parker. Holding events like this.
    Mr. Massaro. Yes. [Laughter.] Well, the Helsinki Commission, first 
of all, does not have member states. The Helsinki Commission is a U.S. 
agency mandated to monitor compliance with commitments that were made 
under the Organization for Security and Cooperation in Europe 
framework. And in order to do that, we hold all sorts of things. We 
hold events. We write letters. We interface with members. We bring in 
meetings. All sort of things like that. So, you know, that's what we're 
doing. We have both regional and thematic advisors. I'm a thematic 
advisor. I work on international economic policy. I think we have a lot 
of our regional advisors here today, actually, work on a number of 
regions. And all the countries of the OSCE region are covered. Does 
that answer your question?
    Mr. Parker. Paul, I think Mark has----
    Mr. Massaro. Oh, yes. Mark, please.
    Mr. Dubowitz. Paul, can I? Just something Rob said--I mean, I think 
we all share this, having either worked inside the U.S. Government, 
trying to convince Treasury and State to do these kinds of 
designations. I'm wondering--is the Helsinki Commission positioned, for 
example, to host on its website a Global Magnitsky human rights and 
corruption watch list? And so the idea would be both your commission 
and outside groups could feed into you open source evidence of 
individuals and entities who otherwise could be sanctionable under 
Global Magnitsky, have not yet been sanctioned for whatever reason--
mostly a resource issue inside USG. But you actually could have a watch 
list. And we're actually watching these individuals and entities.
    That would be very useful from a naming and shaming perspective, 
which is often why these designations are important--I mean, the visa 
bans and the asset freezes are useful to the extent that there are 
assets within the U.S. jurisdiction and travel bans that we can 
enforce. But what's most useful is a naming and shaming component, 
sending a message out to the international financial community that 
these are people that you should stay away from, because we have deep 
concerns over their human rights abuses and corruption. And by merely 
having that watch list, you're not subject to the same designation 
thresholds that U.S. Treasury Department or State Department would be.
    Is that within your mandate? Is there any reason why--I mean, I'd 
ask any of the panelists here--maybe Adam, others--why you couldn't do 
that or shouldn't do that? But it certainly seems like we could get a 
lot more of these sort of notional designations out there if we could 
do it through a watch list, as opposed to strict designations.
    Mr. White. Well----
    Mr. Dubowitz. Tell me, Josh, why we can't do it.
    Mr. White. Sure. Can everyone hear me? So I think the argument 
against that is also the same argument against why we wouldn't want to 
share the names of possible targets with the media, and publicize it 
broadly, which is that it undermines the efficacy of the sanctions, 
right? If people know that they are on the radar for sanctions, they 
are going to prepare. They're going to start squirreling away their 
assets, setting up front companies. They are going to know that they're 
being scrutinized and they're going to get nervous.
    And so when we look for impact as the Treasury office responsible 
for kind of determining which targets move forward and building those 
packages, what we look for are the people who are kind of the best-kept 
secrets, right? And so the people who perhaps are on the front page or 
people are associating with sanctions, but those who would have just as 
much impact may not be on everyone's radar. No one--you know, not 
everyone has heard of, but are just as vitally important to those who 
are committing human rights abuses and engaging in corruption.
    I think that if you give people a heads up, not only does it give 
them time to prepare, but also for those of you who are overseas 
gathering information, collecting documents, doing source interviews--
if your organization is associated with kind of doing the U.S. 
Government's bidding, you know, serving as sort of de-facto 
investigators for my former team at the Office of Foreign Assets 
Control (OFAC) or my colleagues elsewhere in government, there are 
serious kind of implications for safety and security. And so I think, 
one, there's an impact concern.
    You--I know for a fact--and in the last round, we shied away from 
doing targets that were highly publicized because, you know, in terms 
of financial impact, we thought the jig was up and the cat was out of 
the bag. Now, with visa bans, that's a little bit different because 
there's very little someone can do to prepare for having their visa 
revoked. But in terms of hiding their assets, you know, once people are 
under suspicion, they take precautions to protect themselves.
    Mr. Dubowitz. Can I just quickly respond to that? Because I 
actually think it's tremendously useful.
    So, I agree--the best-kept secrets deserve to kept secret. And that 
seems to me a role for the U.S. Government to go after the best-kept 
secrets and to keep those people off any kind of watch lists. Then 
there are the worst-kept secrets, right? Those are the people that are 
so obvious in the public domain, are committing gross human rights 
violations and corruption. And there is, it seems to me, an opportunity 
to put those people on a quasi-governmental watch list, protected to 
libel suits, that has the name and shame impact I think we would all be 
looking before. And somewhere between the best-kept secrets and the 
worst-kept secrets is going to be a judgment call, right, about whether 
this particular entity or this particular individual should be 
publicized.
    But it would seem to me that there is at least--would you agree 
that there are a certain number of entities and individuals who are the 
worst-kept secrets who already are out there. They've probably already 
structured their finances because they know they're on some kind of hit 
list at some point. Let's get that on a Helsinki Commission human 
rights and corruption watch list, a formal list that then I would 
guess--Adam, you would know this better than I do. Would that list be 
picked up by financial institutions, for example, when they are 
investigating whether to green light a financial transaction? I mean, 
it's a formal or quasi-formal government list. And those----
    Mr. Smith. It would be fed into the analysis.
    Mr. Dubowitz. Right. So it would be fed into the analysis. You 
would actually get--to a certain degree, you would start to isolate 
these people from the financial system, even without doing a specific 
specially designated national (SDN) designation. And then we'd leave 
the best--or would leave the best-kept secrets to your former 
colleagues on OFAC.
    Mr. Massaro. So Bill would like to jump in on this real quick. 
Thanks, Bill.
    Mr. Browder. I just wanted to point out that this has been a big 
learning process for me and for my team, seeing how the whole rollout 
of sanctions works, and who it affects, and what the implications are. 
And we started out--and I should say that it was effectively our idea, 
this--when Magnitsky was killed to do visa bans and asset freezes. But 
we discovered that actually there was a far better consequence to this 
than those two consequences that come from this. Which is that whether 
or not people know they're going to be on the sanctions list--and 
pretty much everybody who's, like, really a bad guy knows that that is 
coming down their way, and so they're probably already prepared even if 
they're best- or worst-kept secrets.
    But the real value of putting somebody on the Magnitsky list is 
that they go on to something called the OFAC sanctions list. And when 
you're on the OFAC sanctions list, you're on the same list as ISIS and 
al-Qaeda terrorists and Mexican and Colombian drug barons. And every 
bank in the world subscribes to one of several data bases--one of them 
is called World-Check. There's other ones. And those data bases cross 
reference your accounts, who you hold accounts for, with people who are 
on the OFAC sanctions list. And if anyone is on that OFAC sanctions 
list, that bank will close your account the next day.
    And I'm not just talking about U.S. banks. It can be a Venezuelan 
bank, or even a Dubai bank, or a Hong Kong bank. And the reason is 
because no bank wants to be in violation of U.S. Treasury sanctions. 
And the reason why they don't want to be in violation of U.S. Treasury 
sanctions is a very simple risk-reward. And that is that if a person 
who's on the sanctions list is transferring $1 million, the bank gets 
paid $125 to do that wire transfer. And if they get caught transferring 
money for that person who's on the OFAC sanctions list, they have to 
pay three times the amount of money that was transferred, or $3 
million. So the risk is $3 million downside for $125 upside. And so 
every bank in the world will close your account.
    And so actually the real value--and I'm not saying it's not 
valuable to ban visas and it's not valuable to freeze assets--of 
course, that's valuable. But the real value, the devastating value, the 
thing that absolutely impacts these people and makes them crazy, is the 
fact that they become financial pariahs once they get put on that list. 
And so I would argue against any secrecy about all this thing. Just get 
on with it, put those names out there, and make these people think that 
either they're on the list, or think there's a good chance they're 
going to get on that list. And then they become financial pariahs.
    Mr. Dubowitz. Well, actually, Bill, that's exactly the reason--I 
think we're in agreement here--that's exactly the reason. The World-
Check system is not going to only pull in--I think, and Adam will 
correct me on this--is not going to only pull in the SDN List. It's 
going to pull in lots of different information, including credible news 
reports from credible news sources. And here is the opportunity. If the 
Helsinki Commission had a list, right? A quasi-governmental list--well-
vetted, open-source information, credible--that would be pulled in by 
World-Check.
    Now, if you're a financial institution and a compliance officer 
making a decision about whether to greenlight a transaction, you check 
the SDN List, the individual's not on it. But the individual is on the 
Helsinki list. And you say to yourself, hmm, I bet you that anybody on 
the Helsinki list may one day appear on the OFAC list. I'm not going to 
greenlight this transaction for $125 wire transfer fee and find my bank 
in trouble today or in the future. And it seems to me, this is a way to 
significantly expedite the number of individuals and entities that we 
can actually get into a World-Check system, without waiting for OFAC 
which by its very constraints and resources is just not going to be 
able to do, at the pace that we want, the number of designations that I 
think probably everybody in this room would desire.
    Mr. Massaro. Kyle, do you have something to say to this?
    Mr. Parker. Yes, Kyle Parker, Helsinki Commission.
    Sorry to have a comment and not a question. But, one, just to 
confirm your point, Mark, in--I think it was April 26, 2010, Senator 
Cardin, then chair of the Helsinki Commission, released his own list of 
60 high-level Russian officials that he believed warranted a second 
look by the executive branch, particularly citing, I think it was, 
Proclamation 7750, which was an executive order authority that could 
have been used to ban their visas and block their travel. I can't 
remember exactly how many months went by, but long before the law 
picked up steam and was headed for passage, they were already in World-
Check. I think World-Check picked them up in a matter of months, as 
soon as the thing really got heated in the press. So there's that.
    You know, I also think one of the problems, as someone who was 
involved in writing this original authority, one of the things we were 
very concerned about is how do we force the Department of State to ban 
a visa and say they've banned a visa for this individual? Because, of 
course, the Department of State claims to us that their hands are tied 
by the Immigration and Nationality Act (INA) prohibition on the 
confidentiality of State Department records. I think that's arguable 
whether what we were asking would have fallen under that. But the way 
we get the publicity is the SDN List, which has to be public by the 
nature of how it works.
    And so, you know, I've often wondered, had we had it to do over 
again and we were living in a vacuum in an ideal world, we might have 
gone back to the Immigration and Nationality Act and waived the 
confidentiality requirements or made it permissible or whatever, for a 
specific category of undesirables, which are already mentioned in the 
INA, certain human rights abuses and corruption and things. If you said 
that in those cases--and I still--I think that's a legislative avenue 
that might be worth pursuing just because it leads the government in 
this direction of saying: If you were to go into the INA and make that 
section permissive, and not tell the State Department it has to, but 
say you are no longer able to essentially say INA 222(f)17--I think 
that's the section--precludes us from naming these individuals.
    Because I used to read Iran sanctions lists, and it would say, 
okay, today secretary designated 50 individuals--scientists, government 
officials, blah, blah, blah, of Iran. But pursuant to the Immigration 
and Nationality Act, can't say who it is. And one of the things we 
found in the Magnitsky case, that it was the impact of knowing the name 
was just so much more powerful. If you didn't know the name, and, oh, 
maybe there were a million people on a classified list, who really 
cared? It was like a tree falling in the woods that no one heard.
    And again, looking at I think some of Congress's intent here is not 
always to even freeze any money. Sometimes--you know, it's to block. 
It's also to say: You're not going to have any money in this system, 
even if you had any. And it's also that cost effective way to afford 
moral solidarity with those who suffer the abuse in the foreign country 
and say, look, the U.S. Government will not be an unwitting--you know, 
witting or unwilling legitimator of your tormentors. They are blocked 
from our system. Anyway, I know we need to move on, but----
    Mr. Massaro. Yes. Thanks so much, Kyle. And thanks for that idea.
    I know there are more questions out there, especially on this idea, 
but we are going to move on. Try to keep it focused on implementation 
of the Global Magnitsky Act. And we're going to move to Adam Smith now, 
who's going to talk about the Treasury Department perspective, tell us, 
I guess, why the SDN List is important.
    Mr. Smith. Thanks so much, it's great to be here.
     I was formerly senior advisor to the director of OFAC and sat on 
the National Security Council staff under President Obama. So I had an 
interesting view of both a front row seat in the implementation agency, 
as well as the interagency, which tried to, of course, leverage 
sanctions. As Rob and I were colleagues at the NSC and he knows full 
well that this was a matter very near and dear to my heart, as I know 
it was Rob's as well. And I'm very heartened to see that it's in real 
life and we're now talking about implementation, which is very 
exciting.
    And when Treasury receives sort of an executive order like this--
they don't really receive it, I mean, as much as they were a part of 
the process. But let's just sort of assume that they receive it in a 
mailbox and they need to implement. What do they do? Well, there are 
two issues that we need to focus on. One, I think, my colleague Josh is 
actually going to speak more about, that's the actual process. When you 
look at an executive order, how do you move the words into action, into 
SDNs, into sort of sanctions? The other is the strategic question of 
how Treasury is actually going to use this tool in a way that actually 
meets our foreign policy interests. And that's a much more nuanced 
question, and I'm going to focus most of my time there.
    But first, I am going to talk a little bit about the process. And 
I'm going to let Josh fill in some of the holes after I sort of get 
through this. But generally, when--the beauty of an executive order 
that is under the IEEPA authority is that Treasury's done this before, 
right? These are professionals. And OFAC is a 100 percent 
professionalized agency. There are no political appointees there. So my 
former colleagues, Josh's former colleagues, most of them are still 
there. I left a few years ago, Josh much more recently. And so they've 
done this before. You see an executive order. You start with the 
prongs, which are the bases for the sanctions. Of course, here you've 
got incredibly broad prongs. In other words, human rights abuses and 
corruption can be almost anything you want them to be, because they're 
not defined.
    And of course, even though OFAC as a rule has not favored 
designations on these bases--and we can talk about that; I think that's 
probably a fair statement--human rights and corruption have appeared in 
some other executive orders. You know, human rights have appeared in a 
Venezuela piece fairly recently and corruption in Zimbabwe and a few 
others. But it is still sort of a fairly new concept, in a way. OFAC as 
a rule would much prefer sort of strict behavior based, much more 
discrete actions to sanction folks. So there's been a bit of a 
challenge there in getting an internal definition worked up that's 
comfortable.
    Then, of course, they'll think about numerous targets, think about 
foreign policy priorities, sort of what Josh was saying, who are the 
best sort of folks that we should be thinking about.
    And then, of course, information collection. And we've talked about 
this a little bit, but I think it's important to stop here and really 
emphasize that OFAC is incredibly flexible with respect to the 
information it can get. It can use--unlike many other sanctions 
authorities globally, it can use intel, open source, NGOs, press 
reports--anything. And especially for things like human rights and 
corruption, the role of open source and NGOs is absolutely critical, 
primarily because government-derived information from the intel side is 
often a lot more difficult, due to prioritization of collection assets, 
which are often not in places where some of these horrific things 
happen.
    Again, OFAC does require collaboration. I mean, that's the key 
thing to remember here: A single source activity, a single source claim 
is not going to get you where you need to go. And then, of course, once 
you are on the SDN List--just to emphasize this, this is a death 
sentence in the financial world. I mean, to give you a sense of this, 
in Colombia they call being on the sanctions list, which they call 
Lista Clinton, which I think is interesting historically, they call it 
muerte civil. They call it civil death, being on the sanctions list. 
And it really is, because banks all over the world, even those entirely 
outside the U.S. jurisdiction, look at someone on the list and they 
just don't want anything to do with that person, that thing, that 
entity, that corporation. And they move far, far away.
    And of course, the nice part of this evidence issue, just real 
quick, is that the evidence requirements are actually fairly modest, 
because this is not a judicial action. So whereas in a court of law 
you'd be beyond a reasonable doubt or a preponderance of the evidence, 
here, because it's an administrative action, you actually need a fairly 
modest level of reasonable basis to believe, which sounds like it's a 
pretty minimal standard. And it is, right? It's not anywhere near a 
judicial standard. That being said, and Josh can speak to this more 
than I can, OFAC is very, very serious about what it means to be an 
SDN. They take that very seriously.
    They very often more than meet that standard. But as a general 
rule, you can actually get it at a fairly modest level.
    So the process issue, which I think is fairly standard, of how they 
would work this--the questions then really become strategy. And when 
you think about the strategy of implementing a sanctions tool like 
this, there are a couple of questions that I'm going to pose as binary, 
but they're not really binary. But there are these choices as to how 
think about these sanctions tools that, frankly, are pretty hard to 
both do at the same time. And you'll see what I mean.
    For instance, the first question I had when I was looking at this 
tool was, are we aiming for messaging or for impact, right? So the 
quintessential example for this is Joseph Kony. Joseph Kony, awful, 
awful warlord in Central African Republic, Uganda. He has been on the 
SDN List for a decade. Does he deserve to be on the SDN List? Of 
course, he deserves it. If anybody does, he does. He deserves more than 
that, but he's on the SDN List. However, there is a question about 
whether or not his ability to commit atrocities over the past decade 
has actually been implicated by the fact that he's on the SDN List.
    He doesn't have a bank account, as far as we know, doesn't go to 
the ATM machine. And so the question is, is that messaging tool 
important enough, or do you need to have--you need to only have 
sanctions on people who actually need the international financial 
system, which of course is the modus operandi for how these sanctions 
actually work. So messaging versus impact.
    One-off or network, is the next one. Will the tool be used for one-
off sort of hit jobs, essentially, finding individual bad actors? Or 
are we going to look at the way we approach counter-terrorism and maybe 
counter-narcotics sanctions and look at the network where you sort of 
have a serial sanctioning of a network with the goal of disrupting and 
even dismantling entire groups of bad actors. So you've seen this in 
the terrorism context, very effective in the narcotics context where 
you're looking at a cartel and trying to figure out which nodes are 
most important, and you go after not just one person or even two 
people, but whole groups of people at the same time, or over a period 
of time.
    Third, and perhaps most importantly there, is unilateral or 
multilateral. So is the goal here going to be imposing just from the 
United States or are we going to use it--like the Global Magnitsky, 
these seven or eight countries that have Magnitsky--are we going to 
look at the U.K. or EU to hopefully follow us? Because the reality is 
that even though it's certainly true that the U.S. sanctions are 
uniquely powerful, the reality is--and we've seen this very clearly in 
the context of Russia sanctions especially--is that for some targets 
having parallel measures enacted by authorities other than the U.S. can 
be the difference between an annoyance as being on the sanctions list, 
and one that's really material. And that's an important distinction.
    Now, if multilateralization is the goal, the strategic issue 
becomes even more complicated, because then Treasury needs to be very 
concerned about the kinds of intelligence it can share with its foreign 
counterparts, and what sort of evidence can be declassified. Now, we 
know this in the European context, and we've learned the hard lesson, 
because European courts have often delisted people--that is, removed 
them from sanctions lists, who have been sanctioned by the EU because 
the European courts have found a lack of due process resulting from a 
lack, in part, of an inability to share with European courts or those 
who are sanctioned U.S.-derived intelligence, right?
    So much of the information that we gave to the Europeans--please 
sanction this al-Qa'ida person, this Taliban person--these people ended 
up being sanctioned. They then challenged those in European courts, and 
European courts let them out because we could not share that 
information with them, couldn't share the information with the courts. 
So we're very careful about that. In that context, I really think we 
can learn a lot from the counter-narcotics program, which I think is 
one of OFAC's jewels that is really sort of underappreciated.
    Now, there are several reasons for its success, but one of them is 
its ability to multilateralize sanctions. And it does it in really 
interesting ways. They can share intelligence very quickly with foreign 
counterparties. And one of the reasons they can do it in ways that, 
frankly, the terrorism folks cannot, is that much of the information in 
those programs rely upon information that is, quote, ``law enforcement 
sensitive.'' That's the level of classification, and not higher than 
that. So it's much easier to share that.
    They're also very good at targeting individuals without targeting 
the countries in which they reside, which means that many of the people 
who have been sanctioned on the narco programs are actually close 
allies of the United States. So the two countries who have the most 
number of sanctioned parties in the whole U.S. Government are Colombia 
and Mexico, two very close allies of the United States. Yet, we've 
managed to do that without impugning the entire jurisdiction in which 
they're from. And of course, that really makes it a real important 
model, I think, for sort of this executive order going forward.
    Two more sort of strategic choices. Again, I set them as binary, 
but they don't have to be binary. One here that's very important to 
remember is, is there an interagency approach we need to be concerned 
about? Another way to think about it, is this a pile-on exercise or is 
this a new-target exercise? So uniquely for this executive order, 
because of what it focuses on, the question is what is the strategy 
going to be with respect to other agencies in the U.S. Government?
    So it's a strategy to pile onto other agency's efforts, like the 
Department of Justice's (DOJ's) Foreign Corrupt Practices Act 
prosecutions? Or are we going to target individuals or entities that 
other agencies can't pursue because of their particular operational or 
legal requirements of their authorities, right?
    It's usually far easier to place someone on the SDN List than it is 
to build an FCPA case. That's not to say it's easy. It's not easy. But 
if you think about the level of proof you need, right, at the very 
least because the proof is so much more modest for an SDN listing, you 
need to ask yourself: Are you actually just building on a case that's 
already been made? And I say that what's interesting is that some of 
the cases, the initial Global Magnitsky designations, actually had FCPA 
or anti-money laundering case connections already. So the question is, 
was that a useful use of these very limited resources that OFAC has? Or 
should we be looking at cases that, frankly, cannot be made by other 
agencies because the evidence, frankly, is not strong enough? We can 
take advantage of the fact that evidence doesn't need to be as strong 
as a legal matter when we're working on the executive order IEEPA sort 
of front, as opposed to the legal front of DOJ.
    Last--and I think it's related a little bit to the discussion that 
Mark and others have been having up here--is the goal, I call it, 
outreach or shock and awe? What I mean by that, is the goal here to 
actually impose sanctions, or to deter and change behavior? Because if 
the latter is the goal--in other words, if we're really trying to deter 
human rights violations, deter corruption, we need to structure an 
outreach strategy, right, to governments and private sector actors to 
warn them about the risks and, if relevant, to inform them what they 
need to do to avoid falling afoul of the EO or, in some contexts, 
getting off the EO list as well, right, sort of as an off ramp.
    Now, this strategy, as Mark I know knows perhaps better than 
anybody, certainly outside of government, was incredibly effective in 
many contexts in the Iran context, right? When I was in government, one 
of my first jobs was to help implement secondary sanctions on Iran, 
focusing on countries that were still trading with Iran after we, 
frankly, asked them very politely not to. And they didn't listen, so we 
ended up having these secondary sanctions authorities.
    But the reality is that very few entities ended up actually being 
listed. It wasn't because very few entities didn't need to be listed or 
couldn't be listed. But, rather, after people like me, with smiling 
faces, sort of sat down with them in terrible countries around the 
world--very sort of far, far, far flung--they decided it was not worth 
their while to continue engaging with Iran. It was much more reasonable 
for them to basically come in from out of the cold and not engage. And 
so the result of these sanctions, and I think the success of these 
sanctions, was that they no longer decided to engage with Iran. So I 
would argue the sanctions were incredibly successful, even though the 
secondary sanctions list was very, very small.
    And so the question is, is that the model here? Or is the measure 
of success going to be the size of the list or is it going to be the 
change in behavior? And I recognize fully, especially from the NGO sort 
of community, it's very hard to sort of get a good bang for the buck 
for something that doesn't happen, right? If a human rights violation 
does not occur, it's hard to sort of demonstrate what the cause is, the 
effectiveness, and frankly the benefit of our advocacy that led to that 
outcome, because obviously it's going to be multivariant.
    But the reality is, I think we can all agree, we'd much rather that 
be the outcome, right? We'd much rather have a tool like this prevent 
bad activities, rather than coming on the back end of some horrific 
action and just sort of mop up in, frankly, a way that will never be 
sufficient, right? Because it's all fine and good to put people on the 
Magnitsky list, but I'd much rather people are not slaughtering the 
Rohingya. I'd much rather people are not sort of engaging in activities 
that cause them to be on this list.
    With that, I think I will stop. And I'm happy to take questions now 
or in the broader question period.
    Mr. Massaro. Thank you very much, Adam. Very, very fascinating 
presentation.
    Just a really quick sort of factual question, and that on is on the 
authority underpinning the narco. That's sort of the example that you 
talked about. What was the goal of that? Was that to, like, just knock 
these organizations out rather than deter organizations? Because, you 
know, with the Global Magnitsky authorities, they're so new we really 
are thinking about it. And I think deterrence is usually the capacity 
we see it in. And then, also, was there an avenue for NGO participation 
in the anti-narco wave?
    Mr. Smith. So to answer the second question, yes. I mean, 
absolutely. We often received inputs in much the same way from the 
narcotics side. The reality is that ownership structures are very 
opaque everywhere--[laughs]--even in the United States. But in the 
narcotics context, perhaps especially. And so we often did get a lot of 
inputs from outside the government in that regard that I'm aware of.
    The authorities are slightly different. The legal authority is a 
different law. It's not IEEPA. It's the Kingpin Act, as a general rule. 
But I think we're losing the forest for the trees if we focus on that 
issue. The reality is that it's the same basic idea, right? You put 
someone on the sanctions list, and you are outside of sort of polite 
financial society, is sort of what the outcome is. It's muerte civil. 
To avoid that, he will do whatever he needs to do in order to avoid 
that.
    Now, I'm not also--and the other thing which is fascinating here, 
and why I think it's very relevant to talk about narco, is that one of 
the reasons it's also successful is the type of person who is a 
narcotics trafficker. A narcotics trafficker is uniquely situated in a 
world in which they usually want to be in one part of the world--they 
want to be in the illegal world, namely make a lot of money from the 
cartels. And in the other part of the world, they want to be in the 
legal world. They want be an accountant, have a house in the United 
States, send their kids to college in the U.S., et cetera. There is 
this need. And so they are uniquely vulnerable, right? If you say that 
you are on the SDN List, you can no longer have your house in the 
United States or send your kid to college here, they will almost 
immediately sort of move off. And so the success here is based on that 
sort of vulnerability.
    People who commit corruption in many contexts, especially global 
corruption, are in exactly the same circumstance, right? Because they 
need to have access to London, to New York, to Tokyo, to Hong Kong in 
order to, frankly, make their world. And so if you deny them that 
ability, much like the narcotics context, I think you can really sort 
of--not just hit them off, right, sort of make sure they can't do it. 
You can actually stop their behavior. And the most success in my mind, 
for the narcotics sanctions programming, is not just sort of the 
destination of the cartels, which I think many of them have been in 
part because of the sanctions, but frankly the delistings. People who 
get delisted--the most active sanctions program in the U.S., with 
respect to both putting people on the list and taking them off the list 
is narcotics, right? It's because they've stopped that behavior which, 
again, is what we're after.
    Mr. Massaro. Very, very interesting. Thank you. We have time for 
one or two questions. Ilya, please. Could we get Ilya a microphone, 
please?
    Questioner. Ilya Zaslavskiy, Free Russia Foundation.
    I have a question about--you mentioned these people need access to 
capital. I have Rotenberg brothers in mind. So they're already on 
Ukrainian sanctions. But experts who follow them say that they very 
successfully avoid or circumvent sanctions, at least in Europe, at 
least in terms of their assets. And now their relatives and their 
associates are getting some of that. So my question, do you think it's 
valuable and necessary for NGOs to try to add them to, say, Global 
Magnitsky Act? Is it wise to put the same people on different 
sanctions?
    A second question, pretty much related to this--do you have any 
moves about Countering America's Adversaries Through Sanctions Act 
(CAATSA) and more sanctions related to that? Because there has been 
some news about it. But so far only Kremlin report has come out, which 
is just a name list without any visible consequences for these people.
    Thank you.
    Mr. Smith. Right. So, it's an interesting question. Because if you 
do look at the SDN List, what you see for many entities is that they're 
sanctioned under more than one authority. But I think that that is--if 
I was an NGO on the outside looking in, I would not focus on that. I 
mean, the Rotenbergs are already SDNs. Many of them are, right, father 
and the two sons, if I'm not mistaken. They're also on the EU list. I 
mean, but there's another part of this, of course, which is the 
enforcement component, right? And that's, I think, another effective 
sort of way to sort of shine the light.
    If there is a situation in which you're seeing that the Rotenbergs 
or whoever are still profiting in a way that suggests that they're not 
actually being sanctioned because they're still living the life that 
they used to live--in the U.S., in Europe, or what have you--I think 
that's another useful tool with respect to sort of what an NGO can do. 
Not just putting people on the list, but saying, wait a second, these 
people are on the list, however, they're still sort of engaging. 
Because the other component of sanctions, at least from a U.S. 
perspective, is that what you could then be focusing on is something 
called material support, right?
    So if someone is on the sanctions list, and then they are being 
provided support to by someone else, that someone else could 
theoretically get in trouble as well for providing material support to 
that person. That could either be an enforcement action, if they're a 
U.S. person or an EU person, or they could become SDNs themselves 
depending on the circumstance.
    On CAATSA, I'm no longer in the government, so I have--your guess 
is frankly as good as--better than mine, to be perfectly honest. I 
think we were all very intrigued by the combination of the Forbes list 
and the Kremlin phonebook that came out at the end of January, and 
we'll see what happens. I've heard the same rumors. It's not clear to 
me whether or not the new sanctions are in line with the 241 list, 
which is what those lists are, or whether it's some other components of 
CAATSA, but we'll see.
    Mr. Massaro. Thanks very much, Adam. And material support and 
facilitation is in the Global Magnitsky Act as well.
    Mr. Smith. Exactly, because those are IEEPA concepts.
    Questioner. Thank you. My name is Ulrich Mans. I work for the 
European Union here as a political advisor on human rights.
    Question for Adam and also to Rob. Earlier on, Adam, you mentioned 
that it can be very difficult to get the information that you have here 
in the U.S. to actually get, for example, across the Atlantic. Does it 
also work the other way around? For example, when submissions are being 
made here in the U.S. by entities that are from outside the U.S. are 
there particular barriers, particular restrictions, particular 
corroboration methodologies that apply that are different from, let's 
say, the average U.S. NGO? Sort of reaching out to Rob's comment about 
the coordinated effort, how difficult is that with NGOs that are based 
elsewhere, whether it's Myanmar or Ukraine or elsewhere?
    Thank you.
    Mr. Smith. The reason it's difficult is not because the 
information--leaving aside sort of information security, personal 
information, whether it can be shipped out of Europe and all the rest. 
The reason it's difficult is because of the legal deference that's 
provided the listings. In the United States historically we provide 
significant deference. In other words--which means if OFAC puts someone 
on the list it is a difficult job--not an impossible job--but a 
difficult job to challenge that in a court of law. In the European 
context, for various reasons, it's become a lot easier. Still not a 
cakewalk by any means, but there is now a pretty healthy body of 
jurisprudence and, frankly, a pretty healthy bar of lawyers--primarily 
in London, but elsewhere as well--who help people get off the list.
    And the way they do that--one of the primary ways they do that is 
by looking at the evidence that they have and saying this is not 
sufficient. The public evidence is insufficient as a matter of due 
process to keep my client on this list. And the courts in Europe, if 
they have access to no other information, which they often don't, can't 
do it. They agree. In other words, they say, you're right, this is not 
from a due process perspective. In a court in the United States the 
court can review classified information, can reviewed unclassified--can 
basically have the entire body of evidence, the entire package that 
Josh and his former team put together can be reviewed by a U.S. court. 
The same cannot be reviewed by Europe.
    The structural issues here are actually interesting, to give you an 
example of one of them. So, in the United States context, very 
sensitive information has to be reviewed in what's called an SCIF, a 
secure compartmentalized information facility, with only cleared 
people, right? So the judge would be cleared, the clerk would be 
cleared, and they would review this evidence. In the European court, 
the European Court of Justice, which is the highest court that deals 
with this in Europe, that's in Luxembourg. And in Luxembourg itself, 
which is where the court is, there is one SCIF in the entire country. 
Do you have any guess where it is? It's not in the court. It's in the 
American embassy, right?
    And so the court itself is not even structurally set up in order to 
have information that would be shared with it by those in the United 
States, who are often the ones who derived the information, so they 
could look at it even if they were cleared, and even if some of the 
other sort of concerns were sort of met. So it's a real challenge here. 
It's a much, much easier thing to sort of bring evidence over here, and 
have it be used in a system that leads to a designation, than the other 
way around, especially when you're dealing with government-derived 
information.
    Mr. Massaro. Rob.
    Mr. Berschinski. The answer on my end is much simpler. We are 
already being engaged basically through word of mouth as what we're 
trying to do grows through events like today, by organizations all over 
the world, who want to turn the reporting that they're doing on the 
ground into some sort of demonstrable impact. What started out last 
year as a couple of dozen--mainly the large international human rights 
NGOs are growing, somewhat exponentially, to kind of country-level 
NGOs, who have a much better sense of what's going on within the four 
corners of their borders, and often are going to have access to 
information that others don't. And so it's just a matter of bringing 
structure to all the information that's out there. And that's what 
we're trying to do.
    Mr. Massaro. Well, thank you very much. We're now going to move on 
to our next set of speakers this time around, Brad and Josh. We've 
heard the strategic perspective of the Treasury Department, and now 
we're going to get down a little bit more into process. Specifically, 
also looking at the construction of a corruption targeting package, 
which is a bit confusing. So please, Josh and Brad.
    Mr. Brooks-Rubin. Thank you. And thanks to the Helsinki Commission 
for having us. In all the sanctions strategy we're talking about here, 
I guess I'm an example of panel speaking strategy, which is when you 
get invited to a panel hire somebody who is a real expert on the 
subject and bring them along. That's what I've done with Josh, and so 
I'm going to really let Josh focus on this, because he was really in 
the weeds on this. The panel speaking ``don't'' is don't speak after a 
bunch of other really smart people who have taken all your points, so 
I'm going to just try to highlight a couple of very specific strategic 
issues, and then let Josh get more into the process weeds.
    Corruption is--as has been mentioned a couple of times--corruption 
as a prong is actually relatively--has not been a significant part of a 
lot of executive orders. Partially because evidence can be hard. The 
definition of corruption can be, you know, debatable. And it's been one 
of these political footballs within the government when thinking about 
designations in the past. So now that we have a clear authority on it, 
there's some education you need to do with the government about why 
corruption matters in your countries. We at the center work on just a 
few countries in east and central Africa. And we know these cases very 
well. But it takes a lot to get actors within the U.S. Government, even 
if they follow these issues, to see that corruption is actually the way 
into the objectives that they are trying to reach.
    So you know your case very well, whatever country it is that you 
may work on, but you have to put together a dossier and a set of 
evidence that tells a story about why that person and that network 
matters, and why corruption is the right tool to achieve the objectives 
that you're talking about. And you can't just tell that story once. You 
can't put together a really good dossier, deliver it, and then sort of 
wait for the press release to come out. It takes repetition. It takes a 
lot of engagement, follow-up. You know, the coalition that Rob and 
others have led has been a very effective way to do that. But build 
your own relationships with the U.S. Government and continue to tell 
the story over and over again so that you can get the right people on 
the list.
    I think two other very quick points I want to make is, be strategic 
also in who the choice is. The most corrupt actor in a society may not 
be the right target. Rob gave a lot of very good examples of the 
strategic objectives we try to achieve with sanctions, and Adam 
mentioned a few more, especially on the network side. So for example, 
one of the South Sudanese individuals designated under Global 
Magnitsky, Benjamin Bol Mel, not a household name necessary, unless you 
follow South Sudan closely, but someone upon whom a series of network 
designations can be built, and who embodies the system of corruption in 
South Sudan. That was sort of the goal in choosing that target as 
opposed to say, maybe, the targets that have been much more in the 
headlines. Which then sort of picks up on Adam's very important point 
about sort of the network and really what's the impact. How are we 
going to be able to really ensure that this civil death is achieved in 
a really strategic way that can change the dynamics on the ground?
    The last sort of strategic point I want to make is sort of my 
chance to cite one of my favorite musicians. Chance the Rapper has a 
line, ``Sometimes the truth don't rhyme.'' And advocates have a very 
hard time sometimes acknowledging nuance, or acknowledging gray area, 
or not overdoing their cases. And I think it's very important in my--in 
a previous life, I was in OFAC counsel's office, where the job is often 
to be difficult on these cases and ensure that when the government gets 
sued that we'll have a case to present.
    And so there will be a lot of questions. No matter how good your 
evidence is, a lot of questions. Help the folks at Treasury and State 
identify, hey, this doesn't exactly add up or we don't have all the 
evidence here. Here's our explanation about why. Really direct people 
through, and explain why maybe sometimes the truth don't rhyme, but we 
can still get to a point where we can meet the standards of evidence as 
Adam described them.
    And then finally, I think it's very important--where are there 
other tools that may be used? And Adam made this point, it's great that 
we're doing this. It's great that we had this first round of 
designations. We could quickly get to Global Magnitsky fatigue very 
soon, and if it starts to be the answer for everything. And I think, 
again, thinking about strategy, thinking about what other sanctions 
authorities or other legal tools apply is very critical, because you're 
going to answer the question, why this as opposed to why something 
else.
    So having given you hopefully some more thinking about where 
corruption fits in this, I'm going to turn it over to Josh, who was in 
really the thick of it in Treasury, putting these together.
    Mr. White. Thanks, Brad. I'm going to talk a little bit about the 
mechanics of the targeting and designation process, which is kind of 
broadly the case for human rights and corruption targeting, but then 
talk a little bit about the nuances of targeting corruption.
    What I would say with respect to Global Magnitsky, one thing 
important to keep in mind is I think it's reasonable to expect that the 
Executive Order, which is EO 13818, is going to be the authority that's 
almost certainly going to be used moving forward. So while the Global 
Magnitsky Act kind of built the foundation and kind of set the 
precedent for the EO to be implemented, when you're looking at the 
criteria that Treasury, that the targeters are going to use in order to 
build their cases which is actually going to be included in the 
administrative record, I would look to the EO because that lays out 
kind of what activity, what criteria is sanctionable. And so the same 
people who are looking at the abundance of information in order to 
build the packages are going to be looking at that same set of 
criteria.
    For corruption, it would be Section B. And as others have alluded 
to, it's pretty broad, and it was intentionally written so. Corruption 
has been very challenging for targeters to build for a number of 
reasons: the availability of information, the recency of information--
oftentimes, cases of corruption aren't discovered until years later. 
And some other executive orders, such as Venezuela or Syria, are 
written in a way where you have to show that the activity is ongoing.
    So when we looked at what we would like to do with the Global 
Magnitsky authority, the new kind of implementing EO, luckily they were 
able to give us, the targeters, an opportunity to kind of pull the best 
language, the most solid and foundational language, from other 
executive orders. That really gave us broad flexibility in order to 
target really the most egregious targets that we thought warranted 
designation.
    So how do you build a case? Start with target identification, and 
there are lots of ways that Treasury and the interagency partners it 
works with--there are lots of ways that they do that. Obviously, 
working with NGOs such as Rob's coalition. But I would be remiss if I 
didn't say there's also email addresses for tips. So, for Treasury, 
it's [email protected]. [Laughter.] And for State--it would have been 
great if we had synced this up--but it's [email protected]. And 
that's an opportunity for the public, whether you're an NGO or just an 
informant, someone who knows something, to write in. You might get an 
acknowledgement. You definitely won't hear back about whether your 
information was used. But perhaps, you know, in instances they might 
follow up with additional questions. So there are lots of ways to kind 
of put a target on the radar of those who are looking at the universe 
of what's possible.
    I will say when it comes to targeting corruption and human rights 
abuses, we view it as a target-rich environment. There were no shortage 
of names when we kind of were assessing the first tranche of options. 
And so really then it comes to kind of where do we have the strongest 
information, where are we going to have the biggest impact, as well as 
considerations like how do we have a geographically diverse target set, 
and one that kind of balances both corruption and human rights.
    The team at OFAC works with their counterparts at State, elsewhere 
in the interagency, but also foreign governments, law enforcement, and 
elsewhere to kind of get leads and tips about kind of who might be 
appropriate for sanctions. And I think some folks have covered a little 
bit about that. But I think what we look for first is where there is 
the most kind of abundance of information.
    So what the targeters will do is draft a legal memorandum, which we 
call an evidentiary, and this evidentiary puts forward the case for why 
someone should be sanctioned. And the criteria that they're using is 
from the relevant executive order, in this case EO 13818. The 
evidentiary puts forward a number of pieces of information, but what 
each kind of individual example must show is that the individual or 
entity meets the specific criteria in the prongs.
    What I would say is, when you're thinking about what information is 
helpful to provide investigators, don't self-center. Something might 
seem important to you or it may not seem important to you, but could be 
the last missing piece that the targeters need in order to corroborate 
something that might already be on the radar through other channels.
    Identifying information is critical, as my colleagues have said, 
but think creatively. So not just full name, date of birth, place of 
birth. Passport numbers are gold. We love having ID numbers, passport 
numbers. But also things like nationality, which sometimes surprisingly 
can be difficult to demonstrate. I think a lot of people assume or 
assess that someone happens to be a citizen or a national of one 
country, but we actually have to show a piece of evidence. We have to 
cite to an exhibit that demonstrates that. Even things like gender are 
helpful to provide. And then, of course, for entities, you know, not 
just the address, but registration license numbers, things that show up 
on documents that are sector-specific for ID codes.
    If you don't have identifiers, you're not going to get your targets 
put on the SDN List.
    It's absolutely critical, the more the better, because the OFAC 
Compliance and OFAC Licensing Divisions have to screen every time that 
there is a possible hit. Every time there's a false hit you'll have 
licensing requests. You'll have inquiries to the compliance hotline. So 
we want to make sure that banks are actually blocking the funds for the 
people who we're intending to go after.
    The next kind of body of information we need, which is really the 
core of these evidentiary memorandums, is the basis for determination. 
And this is really the guts of the evidentiary, the derogatory 
information that shows specific examples of acts that have been taken 
that meet the criteria of the executive order. We need to be able to 
use multiple sources to corroborate each example, and ideally those 
corroborating sources all know about the same kind of activity but gain 
the information in different ways.
    Recent information: GLOMAG is interesting in that the language in 
the criteria is written in such a way that the activity could have 
taken place in the past, and we don't need to demonstrate that it's 
ongoing, although that's ideal. Sanctions are meant to elicit a change 
of behavior, is kind of the policy consideration behind it. And so what 
we want to do is show that there's recent information, ideally within 
the past 5 years--in an ideal world that would be within the past 
year--to show that this person or this entity is engaged in the 
activity of concern, that they are kind of still up to malign 
activities or illicit activities. More historical information is still 
useful to demonstrate a pattern of behavior, but certainly the more 
recent the better.
    What I would say is often a challenge for NGOs is not narrating or 
providing your own assessment. The further away that the investigators 
get from the primary source of the information, the harder it is for us 
to use or for them to use the information.
    So, for example, if you can share--names of the sources are not 
necessary, so if it's from a person, or if it's from a contact, 
probably not necessary. But how that person would have known the 
information, how the person got the information, and why the person 
would be credible, or why the documents would be credible. Oftentimes, 
you know, attorneys will ask how do we know this is a genuine, 
legitimate document, and we have to be able to have a good answer for 
that in order to actually use that information.
    OFAC has ways of protecting that information. There's protections 
for sources and methods, and so there are ways to keep that information 
protected from release. But if they can't understand where the 
information came from, the targeters are not going to use it. 
Understanding kind of how the source knew.
    And then, finally, exculpatory information. If there's information 
that you know to be exculpatory, it's better for you to flag it for the 
NGO that you're going through or for the tip line or for the person 
you're interacting with in the U.S. Government ahead of time because, 
really, if it comes about later in the process, I think it stands to 
undermine the credibility of the source. So being kind of transparent 
about what might negate the story that you're trying to tell, or might 
kind of contradict the facts. It doesn't mean your information won't 
get used, it just means that we're seeing the full picture.
    And finally, just specific to building corruption cases, what I 
would say is that using the flexibility in the EO, I think oftentimes 
it's difficult to have kind of those solid primary sources because, by 
nature of corruption and money laundering, those kinds of activities 
are in the shadows and are hidden from all but a few trusted sources. 
And so what it's become is important to go out to the field. Having the 
targeters or people throughout the U.S. Government and in the private 
sector meeting with those who might be aware of something; or, you 
know, obtaining documents from a whistleblower so that they can provide 
that information that might not otherwise be available to the U.S. 
Government.
    I think that was pretty well done in our first major tranche. And I 
think what you'll see now is a standardization of the process, where 
obviously this evidentiary memorandum, after it's kind of constructed 
and it goes to review, it's signed by the director of OFAC, that's how 
someone gets on the sanctions list. But really, the bulk of the work, 
the biggest challenge, is getting to sufficiency so that the targeter 
can have sign-off from the lawyers, and that they can ultimately put it 
up for the director of OFAC's consideration.
    Mr. Massaro. Thank you very much, Brad and Josh.
    A really quick follow-up question from me. And that is, the Global 
Magnitsky Act has a provision that specific Members of Congress can 
write letters requesting that particular information or particular 
individuals be reviewed to be put on the sanctions list. At what point 
in the process are you guys looking at this sort of a thing? And how 
does that impact your decision?
    Mr. White. I think it's an ongoing conversation between the NGO 
community, quite frankly, the Hill, and the folks at State and at OFAC 
who are considering the different targets. I would say that there are 
oftentimes a large amount of overlap between the targets that are 
considered or put forward by the Hill and that are ultimately 
considered by OFAC.
    One point that I do want to stress, which I think has often been a 
misperception, is just because a target hasn't gone out kind of in the 
first tranche, or it's the next tranche, doesn't mean that ultimately 
that person or that entity won't be sanctioned. And I think that's 
something that we've tried to underscore, is that sometimes there's 
legal sufficiency reasons for why we don't move out with the target. We 
simply don't have enough information at the time. Other times, there 
might be engagement or other considerations. Or we kind of look to the 
kinds of strategies that Adam was articulating earlier in kind of 
trying to decide what the right fit is.
    So it's an ongoing conversation. The challenge for the targeters, 
and I think the frustration of those outside of kind of the group of 
those within the U.S. Government that works on these issues, is that we 
can't tell people--even our legislative branch--we can't tell people 
who we're considering for sanctions. We can't reveal who we're working 
on because of a number of reasons, but largely due to impact, largely 
due to considerations for what we're hoping to accomplish by putting 
them on the list of specially designated nationals. So it's a one-way 
street in terms of the information. Congress provides us with the 
targets. They certainly ask about them when we brief them later on. But 
it's an ongoing kind of conversation that we're always happy to take 
targets from or OFAC is always happy to take targets from whomever 
might have someone to suggest.
    Mr. Massaro. Thank you.
    We're running dangerously low on time here. We're going to move on 
to Mark, after which we will have time for additional questions. And I 
hope we're able to get a few more in, but I do want to be cognizant of 
our panelists' time.
    So, Mark, if you'd like to--we're looking at potential targets now 
under the Global Magnitsky Act, and in specific, Iran.
    Mr. Dubowitz. Okay, great. Well, first of all, thank you very much 
for having me. And certainly as Brad brought Josh, I brought my 
colleague Saeed Ghasseminejad.
    Saeed, if you could just stand up, raise your hand. He does 
phenomenal work investigating corruption in Iran, the Islamic 
Revolutionary Guard Corps (IRGC) control of the Iranian economy, and 
human rights, and has done really terrific work.
    So I've just a few minutes, and I think Rob was smart to save me 
for last, hoping that many of you would have left by then. Since you're 
still here: Saeed and I have been doing a lot of work on Iran, on the 
corruption prong, and we've been looking in particular at the supreme 
leader's $200 billion corporate conglomerates. I want to say just a few 
words about that, and then we can jump to Q&A very quickly.
    Many of you know December/January there were protests in Iran. 
There were hundreds of thousands of Iranians on the streets. Most of 
them were what I would call sort of middle-class poor. These are people 
who by education, by ambition, by sort of social media activity, who 
should be considered middle class, but they're poor. They're living in 
shanty towns as a result of the lack of opportunity in Iran. And unlike 
the 2009 revolution where millions of sort of middle class north 
Tehranis were in the street yelling ``where's my vote,'' in the wake of 
a fraudulent election in Iran, these were Iranians who were saying 
effectively ``where is my paycheck.'' Their complaints were certainly 
about political oppression, certainly about overseas adventurism, but 
more so about why is the regime stealing our money and spending it on 
its own patronage networks, on its own corruption, and also to fund its 
own malign activities.
    So what we started to do is take a much deeper look at something 
that the U.S. Treasury Department in 2013 had designated, which was the 
supreme leader's corporate holding company, which is called the 
Execution of Imam Khomeini's Order--it's a great name, I love that 
name--or IKO, or Setade, in Farsi. We looked at Setade, which Reuters 
had actually appraised as being worth at the time, a few years ago, 
about $95 billion. We looked at the Mostazafan Foundation and we looked 
at the Astan Quds Razavi, and these two foundations and this corporate 
conglomerate are worth, according to our assessment, conservatively, 
very conservatively, about $200 billion.
    Now the key about this is that the supreme leader's supporters like 
to brag about his modest lifestyle. He's a very modest cleric, but, 
clearly, he's a very wealthy one as well. And the key thing to note 
about how he's accumulated this money is that much of the money has 
been accumulated as a result of the illegal expropriation of Iranian 
private property, which is one of the reasons why Iranians who are on 
the street are very unhappy, because the regime has effectively stolen 
their property, post-facto kind of legally authorized that, and then 
taken this money and built up this incredible wealth to fund their 
patronage networks and their malign activity.
    Now, obviously they don't pay taxes. Only the supreme leader's 
office can audit these companies. And many of them are in control of 
sort of key sectors of Iran's economy. So to give you one example, the 
Astan Quds Razavi Foundation owns very tight control of about three 
southern provinces of Iran, with a real estate portfolio of about $20 
billion, including in Mashhad, where many of these protests actually 
first began. The U.S. Treasury Department I said in 2013 had designated 
IKO and 37 of its subsidiaries for sanctions-busting and for generating 
and controlling massive offshore or off-the-books investments, quote/
unquote, ``shielded from the view of the Iranian people and 
international regulators.'' Now, unfortunately--and my bias will show 
here--but as part of the nuclear deal, for some reason the Obama 
Administration decided to de-designate IKO and these subsidiaries, even 
though it had nothing to do with nuclear sanctions or anything to do 
with the nuclear deal. I'll say a few more words about that in a 
second.
    Since the deal was signed itself, there have been about 110 
business and investment deals signed with Iranian companies. I think 
that number greatly understates that, but that's according to Reuters. 
And 90 percent of those are entities that are owned or controlled by 
the state, including IKO and Mostazafan Foundation and Reza Foundation.
    So these entities are certainly far from transparent. Saeed and his 
team have identified 146 Khomeini-owned companies and 144 executives 
and board members associated with these companies. And clearly, as an 
NGO, we've been in touch with the administration and Congress 
advocating for the redesignation of IKO, these foundations and the 
hundreds of subsidiaries and executives that control it.
    I'll say just one last thing, which is not only the supreme leader 
and his $200 billion conglomerate, but many of you know the 
Revolutionary Guards in Iran, the IRGC, maintain significant control 
over the strategic sectors of Iran's economy, and this is energy and 
auto and construction and mining and engineering and telecommunications 
and shipbuilding. They operate through three major entities--the Khatam 
al-Anbya Construction Headquarters, the IRGC Cooperative Foundation, 
and the Basij Cooperative Foundation. And they own directly, or in 
combination with military entities, about 20 percent of the Tehran 
stock exchange, and they're generating billions of dollars again in 
illicit funds that are funding these corruption networks and they're 
also being used to fund their other malign activities. So it's sort of 
just a brief glimpse. It's a case study. We're obviously highly focused 
on this. But Iran and the supreme leader's entire conglomerate provides 
a very interesting insight into opportunities for Global Magnitsky.
    For those of you who are asking how can we go re-designate it once 
it has already been de-designated under the Joint Comprehensive Plan of 
Action (JCPOA), the answer, from my perspective, is, the JCPOA was 
never meant to grant blanket immunity to any entity to continue malign 
activities in the future, right?
    That was never the intention. If there was an Iranian bank that we 
find tomorrow funding the Quds Force or funding a missile program, even 
if that had been de-designated as part of the JCPOA--I don't think the 
Obama Administration ever intended and explicitly actually said this--
we're not going to grant blanket immunity to these entities to continue 
their nefarious activities in the future. So if evidence can 
substantiate that IKO and Mostazafan Foundation and some of these other 
foundations continue after 2015 and more recently in the past year 
continue to meet the prongs in this executive order, then our view is 
that the JCPOA should not grant blanket immunity to the individuals and 
entities involved in those malign activities.
    I'll stop there.
    Mr. Massaro. Thank you very much, Mark.
    And I want to make a note for everyone that in your packets that 
were handed out at the beginning, you'll find Mark's op-ed in The Wall 
Street Journal on this very subject. In addition to Rob's op-ed on the 
rollout of the Global Magnitsky Act's designation last December.
    So with that, let's take some more questions. Please, Obie [ph].
    Questioner. Thank you, Paul, very much.
    Mr. Massaro. You've got a mic there. Yes, thanks.
    Questioner. [Comes on mic.] Thank you for the panelists for this 
very timely discussion about an increasingly foreign policy issue that 
I'm very enthusiastic about, and to talk about implementation was I 
think the right thing to do. My question----
    Mr. Massaro. Obie [ph], real quick, could you just say your name 
and affiliation?
    Questioner. Yes, sorry. Obie Moore. I'm in private law practice, 
focusing on criminal defense matters in Central and Eastern Europe, 
particularly Romania, Serbia, Hungary, these days.
    Rob made mention about when dealing with allies and friends that 
perhaps it doesn't have to be such an onerous result. You want to bring 
the attention of the problem when you're putting together an 
evidentiary case. My question is about when it is institutional 
corruption, that that still exists, particularly after 28 years of this 
transition from communism in Central and Eastern Europe, how you can 
best go about that.
    I mean, I'm interested in getting the results. The things that I 
see are that, for example, in the anticorruption fight, yes, there are 
backlashes to that, and as Bill said, that there are costs. People 
retaliate when you go after them and do things. How do you go about 
that, particularly given the standard of the Magnitsky Act? I suppose 
that applies to institutional matters as well, gross violations of 
internationally recognized human rights.
    If that's the standard that you have to pose when you're engaging 
in an anticorruption fight and the political forces that be then start 
to countermand that institutionally because you're going after some of 
their politicians--or the other side of that is that the anticorruption 
fight in these countries are still strongly aligned with the security 
services, who then start to antagonize the independence of the 
judiciary and influence judges to not act independently and not respect 
separation of powers but do what the security services tell them to do. 
Are any of those types of institutional matters with--under the, you 
know, remit of the Global Magnitsky Act?
    Mr. Berschinski. So the Global Magnitsky Act is, at the end of the 
day, a tool for use to advance U.S. national interests, right? So if 
you--in the context of Central and Eastern Europe, I think there are 
examples of countries, some of which you mentioned, where there is 
pretty entrenched structural corruption. I could foresee a way in which 
the U.S. Government would want to express its displeasure with some of 
those activities, and Global Magnitsky would be one tool among many 
that it could use. It wouldn't necessarily be the first tool. It would 
be a very powerful tool. And in my former hat as a State Department 
official, I would probably be advocating for discussions with close 
allies first before using this tool.
    But I think to a point that was made--a very salient point that 
Adam made earlier--ultimately, at the end of the day, we're interested 
in the impact, right? And so to those of us on the outside, we may see 
a certain circumstance as the dog that doesn't bark. We may not know, 
in the absence of a sanction designation, that some positive change was 
made, but our diplomats will know.
    There is one future in which our diplomats have a very nuanced and 
tough conversation, say, with governments that are engaged in corrupt 
practices in the region you're talking about and certain behaviors 
change and Global Magnitsky is never used, and that's a great outcome 
as far as I'm concerned. There's a different scenario in which that 
conversation is had, behaviors don't change, and then I, for one, am a 
proponent of using a tool like this. And I think you have to be 
tactically smart about where to apply it and what diplomatic message 
you send in where to apply it.
    So you mentioned that in some countries, in many countries these 
issues are systemic. Well, you could designate one or two people and 
the diplomatic message that accompanies those designations is, we 
recognize that the behavior goes well beyond these two people. We hold 
the potential to designate more moving forward. So if you would like 
for that not to happen in the future--we don't want that to happen--
here are ways in which we can work together to strengthen your law 
enforcement and judicial systems, and so on and so forth.
    Mr. Massaro. Thank you, Rob.
    In the back here.
    Questioner. My name's Alex. I cover Azerbaijan.
    Just to follow up Obie's previous question and Rob's answer, this 
is the best way to address these human rights violations. But imagine a 
country like Azerbaijan, where human rights violators actually are 
getting promoted. So what if we come up with the list of those names 
and then we don't name the main troublemaker, you know, who's the 
president--like in Russia, Putin--so they actually greenlight--you 
know, they promote those violators? It will become a disappointment 
that they can't live with. So this is one question.
    The second, can the panelists give us an idea, a timeframe? From 
day one we hear about very compelling, very--these undeniable human 
rights violations, and they say torture in Azerbaijani prison, and that 
their names pop up in that list. So just to address this--[inaudible].
    Thank you very much.
    Mr. White. Sure. So in terms of the timeline for designation, the 
answer is not a great one, and that answer is that it depends. It 
depends on a number of factors. It depends on the sufficiency of the 
information, the abundance of the information that's available. Do the 
targeters have to work to get corroboration, is the information readily 
available? Further to Adam's earlier point, is there going to be 
engagement? Are there going to be efforts to try to incentivize a 
change in behavior before sanctions ultimately come about? But it's 
kind of a continuous process where, you know, we say the designation 
timeframe can--if it's straightforward and if it's a priority can be a 
matter of weeks or it can be a matter of months.
    That being said, every case is different. So, unfortunately, it's 
hard to give a standard timeframe. But what I would say is that, to my 
earlier point, if you don't see an individual sanctioned that you had 
really hoped for in the months following your proposal, it doesn't mean 
that it's not going to happen. I think there's targets that folks have 
had on their minds for years that--you know, well before there was a 
Global Magnitsky Act, they now see a tool available to them. And so, 
yes, I think patience is critical, but also providing as much 
information as possible will help speed up the process.
    Mr. Dubowitz. If I could just add to that, I didn't work at OFAC 
even though I'm a total OFAC groupie and have huge admiration for OFAC 
and Terrorism and Financial Intelligence (TFI). I'm an impatient sort 
of think tank NGO-er. And 15 years kind of working these issues, just a 
couple of strategies if you're impatient like me. The first is, 
obviously Congress has a very important role not only in passing Global 
Magnitsky--and thanks to the great work of some of the folks up here--
but actually putting in legislation required determinations--and we've 
seen this in the past--where you effectively give OFAC 90 days to make 
determinations on a list of targets.
    Now, obviously, if you like OFAC and you're friends with OFAC and 
you want to be helpful to OFAC, it's really useful if, before Congress 
passes that legislation giving these guys 90 days to make those 
determinations, you've been working with them behind the scenes for 
months and months, providing them with a lot of open source information 
to give them a head start. Otherwise, they may not return your calls 
anymore. But that's one useful strategy if you're impatient, right? 
Work with Congress to try and get these determinations.
    Now, of course, if you're impatient, working with Congress is also 
a contradiction in terms. So there have got to be other strategies 
about how you can actually publicize the names of these individuals, 
and we had that sort of conversation about, can you create a Helsinki 
watch list, right? So that would be perhaps one way to do it.
    Look at other organizations, governmental, quasi-governmental NGOs, 
and get that information out in the public. Speak to reporters, right? 
Again, a credible story from The New York Times, Washington Post, some 
Wall Street Journal, credible publications--that information is again 
going to feed into the Wolchecks of the world. Those people, those 
entities are going to find a way into systems that are going to really 
complicate the lives of kleptocrats and human rights abusers. So never 
underestimate the extent to which a public name and shame campaign can 
be highly effective--maybe not as effective as an SDN designation or a 
legislative determination, but sure as hell faster.
    Mr. Massaro. Thank you so much.
    So we're going to take two final questions. We started at 3:05, 
we'll end at 5:05.
    Questioner. Thank you. I'll be really quick. Layof Begovic [ph]. I 
am a former Bosnian minister of energy.
    I actually have a comment, quick comment. I think that the impact 
actually of what you guys are talking about is, in my view, most 
important from the perspective of the victims, because the victims' 
families will feel extremely, extremely happy, even if the person who 
is a perpetrator or is somehow related to a perpetrator is put under 
sanctions. I don't know if you know about the Lautenberg sanction. I'm 
sure some people here know that those were the sanctions that U.S. used 
to get the Bosnian Serbs to cooperate with the International Criminal 
Tribunal for the Former Yugoslavia. So, I mean, I think it's much 
broader than just changing future behaviors.
    Otherwise, thank you very much. Excellent panel.
    Mr. Massaro. Thank you.
    Right here.
    Sorry, Ilya. [Laughs.]
    Questioner. Thank you. I'm Geeta [sp] with Voice of America Persian 
Service.
    I don't know--maybe Mark is the person to answer this question. Are 
you suggesting that your new list of entities and people that you are 
considering for corruption cases in Iran be based on the Global 
Magnitsky Act because--is it better? Or what's the difference? Does 
this act facilitate designations any better than other executive 
orders, would you say?
    Mr. Dubowitz. This may be for some of the folks at the table as 
well, particularly the attorneys. From an Iran context, I mean, there 
are other Iran executive orders that relate to human rights that have 
been used in the past and remain certainly on the books. I think when 
it comes to corruption specifically, I think the Global Magnitsky and 
the corresponding executive order are--if they're not the only game in 
town, they're the most powerful game in town for the specific 
corruption-related sanctions.
    There were, in legislation, corruption-related sanctions that 
related to the corrupt diversion of humanitarian goods. That was 
actually put in, I think, the Iran Threat Reduction Act, if I recall. 
But when it comes to broader corruption, if you're going to go after 
the supreme leaders, corporate conglomerate, this executive order under 
Global Magnitsky seems to me the most powerful authorities that we 
have.
    Adam, do you----
    Mr. Smith. Well, there's also an issue here, the benefit of Global 
Magnitsky that Rob knows, when we were still talking about this when we 
were still in government. The benefit of Global Magnitsky is that it 
doesn't actually implicate the country. It's a target on individuals 
and on entities. And it's intriguing, I think, if you look at the 
initial list of Global Magnitsky targets, it included, frankly, people 
in jurisdictions that we probably couldn't have a targeted sanctions 
program on that jurisdiction because of other equities. So we've got 
people who are from Israel, people who are from China, people from the 
Dominican Republic, right; so close allies or important economies that 
we couldn't have an executive order and declare emergency with respect 
to those countries.
    But rather what this tool lets you do, kind of like the narcotics 
context or the counterterrorism context, is focus like a laser on the 
behavior of the people and leave out the jurisdiction in which they're 
in. And that's a real benefit here, to make it clear that it's the 
behavior we're after. It's not the jurisdiction, not the innocent 
people in the jurisdiction who could otherwise be sort of caught up in 
a broader national emergency declared with respect to a jurisdiction or 
a sort of larger sort of geographic entity.
    Questioner. Actually, I had a question for you as well. You spoke 
about the goal being deterrence or changing behavior. You mentioned the 
narco trade, you've seen success. What about in human rights issues? 
Iran has a huge issue with human rights. It's a human rights violator. 
And the present administration wants to target Iranians in that 
specific area. Is there any rate, any chance of success, sanctioning 
people for human rights?
    Mr. Smith. I mean, in my mind--and this is very personal, based on 
work I've done in places like the Balkans and other places--I think 
human rights are a really hard thing to sanction people for, not just 
from an evidentiary perspective but from a behavior-change perspective, 
because very often people who are committing human rights violations 
are doing it in the name of what they think of as a broader ideal. You 
have--you know, that their people have been somehow aggrieved, and 
therefore they're acting in a way to remove other people, forcible 
repatriation of people; the Rohingya issue, what happened during the 
Yugoslav wars in the 1990s. That's a much harder thing, I think, to 
move people on.
    Corruption is so much more venal. It's so much more sort of 
obvious, in a way, that I think in some respects it's the Kony 
question. Does Joseph Kony deserve to be sanctioned? Absolutely. Do we 
think that will actually change his behavior? I think we need to be 
honest about that. The beauty of corruption is that it actually is--it 
links with the nature of the tool, right? The nature of a sanctions 
tool is, it limits people's ability to move money. And what is 
corruption but money, right? It's the ability to get assets. And so it 
really links, whereas human rights is often a lot more involved to it. 
So it's a lot more challenging. That doesn't mean you shouldn't do it. 
I just think that we can--I think that the impact might be less in one 
versus the other.
    Mr. Dubowitz. Can I say something really quickly about that? I 
think one of the mistakes that certainly we made over the past 15 years 
in focusing on Iran and focusing on the human rights issues was not 
doing enough to persuade the U.S. Government to link the human rights 
abuse, the malign conduct, to an economic penalty, because I think 
Adam's exactly right. I mean, when you name and shame Sadeq Larijani, 
which I thought was a very important political sanction that the U.S. 
Government just did recently, something that previous administrations 
had also considered, I think there's political potency and there's 
symbolic potency.
    But, boy, wouldn't it be useful if we could attach that designation 
to an economic impact that would really actually inflict economic harm 
on the regime that he is part of? And we can talk about how to design 
the appropriate economic penalties. But it's not enough just to name 
and shame. It's got to have economic pain attached to it. And I don't 
believe our human rights sanctions--and I may be wrong--and other 
sanctions programs, but I don't believe they actually have that nexus, 
an economic nexus. I personally think they should.
    Mr. Massaro. Ilya, please.
    Questioner. Very quickly. Ilya Zaslavskiy, Free Russia Foundation.
    Does the panel have any suggestions why so far any sanctions list 
or any public shaming of propaganda journalists who cover specifically 
corruption and do disinformation on corruption and Global Magnitsky 
Act, like Nemtsov list, like other lists. Just some of these cases are 
egregious. Vladimir Solovyov, one of the main propaganda people, 
apparently has a green card. Recently, a troll-farm family apparently 
got hired by Facebook and got visa. So should we have a shaming list 
for them? Should we put them under sanctions? And how can we do that?
    Mr. White. From a targeted-financial-sanctions viewpoint, I think 
there is a hesitancy to sanction an individual for behavior or activity 
that would be constitutionally protected in the United States; so 
freedom of speech, just like it's problematic when people send in 
information about someone being associated with someone that is quote/
unquote, ``bad.'' I think it's difficult from kind of a sanctions 
perspective, purely based on speech.
    Now, if there is accompanying activity--for example, if it's a 
communications or information minister of a country, in addition to 
saying heinous, inciteful things, he or she is also saying, by the way, 
here's where you go to pick up the gasoline to light these houses on 
fire, or in some way kind of demonstrating a proactive, you know, 
actually actively working to take action, that's a different story. But 
just based on kind of speech that is offensive to kind of the average 
person, it's quite difficult.
    Mr. Massaro. Brad, you wanted to say something?
    Mr. Brooks-Rubin. Yes. I mean, just two quick words maybe on that. 
I think the OFAC counsel has done a good job with Josh on advising on 
that. I think it's hard. But there are examples. In the Cote d'Ivoire 
sanctions, for example, there were people who were designated. And 
among their act were these kinds of issues. But there is always the 
struggle with the First Amendment analysis and how we need to implement 
that here.
    I wanted to come back a little bit on the last point, which is 
certainly on the countries we work on--South Sudan, Congo, Central 
African Republic, which are traditionally looked at as human rights 
issues or through the human rights lens--I think what we've seen in our 
analysis over the years and why this became such an important tool for 
us is that the thought of them as human rights sanctions was simply 
because people weren't looking at the financial aspect of these. And 
when we're naming targets who don't have assets, I think it's fair to 
say those may not be the right targets.
    But I think what we see and with the Global Magnitsky target list 
is there is an increasing intersection of those worlds. And in some 
ways the distinction between a human rights target and a corruption 
target may, in some ways, almost become a false distinction over time, 
that those are usually linked. And if they are not, then maybe this 
isn't the right tool.
    And, you know, last, on the Azerbaijan question at some level--I 
mean, we work on countries all the time where the question is, do 
sanctions work, right? There are designations and, you know, the crisis 
continues. And I think it's a danger here and it's a danger in any 
sanctions program to say that sanctions change behavior.
    My own personal view is sanctions don't change behavior. Sanctions 
can be leverage to processes that can change behavior. And I think the 
Iran example is--and the persistence and the need that there is for 
there to be continued effort year after year, no matter how impatient 
you are, to find new ways to engage is because sanctions themselves 
almost won't--it's hard to say it can never be a black-and-white 
straight line to a changed behavior, but they can create the leverage 
that allows processes to change behavior.
    And where those processes don't exist, then that's--it's going to 
take a lot to get there. And I think it's--it can be trouble to say, 
well, because we haven't named the president or we haven't named this 
person at the top of the system, nothing will ever change. This is all 
part of a very long process and we'll need to be here in 5 and 10 years 
to really assess whether or not this is an effective tool.
    Mr. Massaro. Okay, thank you so much.
    Kyle.
    Mr. Parker. Two final questions for Josh and Adam.
    For Josh, I know that a visa ban doesn't equal an SDN designation. 
Does an SDN designation effectively equal a visa ban? And the other 
question is, can you give us any ballpark figures on the size of such 
an evidentiary memo? Is it five pages? Is it 100 pages, 25 pages? And 
some rough guidelines. Is most of it classified? Is it law enforcement 
sensitive? Is it--I'm sure highly--the answer is it depends on a lot. 
But any sort of ballpark figures would be interesting.
    And for Adam--a little bit sort of off topic, but very much close 
to the heart of the Helsinki Commission's work. First of all, thank you 
and Ambassador Fried for keeping the ban together on Russia sanctions. 
I'd be very interested in your take on what the disappearance of that 
particular office at the Department of State means. It looks to me like 
it strengthens OFAC's hand in the process. I'm wondering your view.
    And also, on Brexit and London, we've heard a lot that with Brexit 
that London has effectively been the EU's OFAC, if you will. What is--
and we look at how there's only one skiff in Luxembourg. What does this 
mean for our broader programs?
    Thank you very much.
    Mr. White. So on the visa-ban question, I think I can say generally 
yes. The State Department looks to OFAC sanctions to consider the 
merits of whether or not someone should have their visa revoked. But 
it's a completely separate process. And, sorry, I don't think I can 
comment further on that process of theirs.
    In terms of the length of an evidentiary, we want to build a robust 
case. So the standard is an administrative one. But we also want to 
have a very strong case where, if we were to be litigated, we would win 
without any problem. And so, while we try to typically have at least 
our attorneys for kind of ease of review often encourage the OFAC or my 
OFAC colleagues to keep it kind of as concise as possible, usually 
there's a multitude of sources. So, depending on how complex the case 
is, how complex the activity is, I think some of them are fairly 
sizable. And then, again, it depends on the target as to whether it's 
primarily classified information or open source.
    I think what my experience has been with Global Magnitsky, it's 
just because of the nature of the information, a lot of what we've seen 
is actually unclassified, open-source information from a U.N. panel of 
experts, from NGOs, from news reporting. And that's why the work of 
NGOs is so critical to this effort, because, as Adam referred to 
earlier, there are not a tremendous amount of resources devoted to the 
issues of corruption and human rights when you think of kind of other 
national-security priorities.
    Mr. Parker. But it's not law enforcement sensitive.
    Mr. White. They can be.
    Mr. Parker. Oh, they can be. Okay.
    Mr. White. Yes. So, working with law enforcement, both foreign and 
domestic as well.
    Mr. Smith. To answer very quickly, so on the SDN versus visa ban, I 
think it actually works the opposite, because if you're an SDN and you 
don't have a visa ban, you can actually come to the United States 
because of something called the Berman Amendment, which is an exemption 
to IEEPA. Under IEEPA, which is the law that gives you the power to do 
SDN----
    Mr. Parker. [Inaudible]--academics?
    Mr. Smith. Well, no. It basically says that any travel-related 
transactions are exempted from sanctions.
    Mr. Parker. Okay. Okay.
    Mr. Smith. So an SDN can actually come to the United States, enjoy 
his or her life here, and then go about his or her merry way. There are 
some exceptions to that, but as a general rule, the Berman Amendment is 
very, very broad. So it actually--if you don't have a visa ban, there's 
a bit of an issue, I would argue.
    Fried's office and the disappearance thereof is an interesting--I 
mean, it's hard to read much into it, to be perfectly honest, because 
what happened is there is a sanctions office that still exists. It 
hasn't moved. It's in the Bureau of Economic and Business Affairs, 
State Department. There's a deputy assistant secretary there that used 
to basically do that role, which--then Fried sort of took parts of it, 
essentially.
    The idea behind Fried's office, as I read it, was a bureaucratic 
one, because what happened--what used to happen is that, at the 
deputies' committee meetings at the White House, you'd have a deputy 
from Treasury, someone like the undersecretary, usually the 
undersecretary for TFI, who basically spends his or her entire day 
thinking about sanctions. And in a bureaucratic sort of way, they would 
then be competing or arguing with his or her counterpart at the State 
Department, who was P, the political affairs director, who thought 
about everything other than sanctions. And so there was a bureaucratic 
sort of--Treasury would always win those debates, because there just 
wasn't a senior-enough person on the State Department side who could 
sort of compete.
    And so the idea--at least partly the idea--is to put someone like 
Dan Fried, who's a career ambassador, a very senior person, as sort of 
a counterpoint to someone who's also very, very senior in the Treasury 
Department. That was the idea behind it, at least one of the ideas. And 
so the removal of Fried's office--I think you're right--it does sort of 
embolden Treasury to the role it had prior to the eventuality of 
Fried's office. But I'm not sure it really changes anything. I mean, I 
have understood that Treasury--and you would know better than I, Josh--
has sort of taken the mantle up, and because there's a bit of a--a 
lacuna, shall we say, has moved in in ways that perhaps they wouldn't 
have otherwise taken advantage of that.
    Mr. White. No comment.
    Mr. Smith. And I don't blame them at all. [Laughs.]
    On the Brexit issue, very, very fascinating issue, because you're 
100 percent right; not just that London was OFAC. And they have their 
own OFAC now, called the Office of Financial Sanctions Implementation 
(OFSI). London was our OFAC, right. So what we used to do, especially 
in developing multilateral measures, is we would talk to the Brits 
very, very honestly. They would often see our way. They would then 
carry our water, effectively, into discussions with the rest of the 27.
    And so there's a real question that, even before March of next 
year, when the rest of the 27 are just angry at London, shall we say, 
the ability for the Brits to sort of carry our water, especially on 
sensitive issues--be it sort of the continuation of Russian sanctions, 
where there's a lot of, at least on the eastern flank of the EU, some 
questions, or other things; perhaps if the Iran deal sort of unravels, 
getting everyone on board in that regard--it's going to be very 
challenging.
    And I think that with Brexit we will have a partner in London, 
there's no question. And if London remains sort of the financial center 
that it is, that's great, because having London and New York sort of 
offline for those who we sanction, that's great. But if London gives 
way and it becomes a Frankfurt situation or Tokyo or--[inaudible]--or 
Hong Kong or Beijing, and it sort of gives rise to multipolarity with 
respect to the way financial flows go, that's a bit of a disaster for 
our sanctions and then for the multilaterization effort as well.
    Mr. Massaro. Well, thank you all so very much. We're a little over 
15 minutes over time here. Thank you all for sticking around for the 
event. Thank you so much to our great panel. And we'll see you all next 
time. [Applause.]
    [Whereupon, at 5:17 p.m., the briefing ended.] 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                                         A P P E N D I X

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    TRUMPï¿½S SURREPTITIOUS MOVE AGAINST FOREIGN HUMAN RIGHTS ABUSERS \1\
                 BY ROB BERSCHINSKI ON 1/10/18 AT 1:16 PM




    In meetings I've had over the past year with the well meaning and 
generally beleaguered Trump administration officials responsible for 
aspects of the government's human rights policy, a frequent refrain is 
that this administration isn't receiving enough credit for the positive 
steps it has taken with respect to promoting human rights and the rule 
of law (and, to be fair, it has taken a few).
    At a certain level--and I say this with no lack of empathy, given 
the situation in which these officials find themselves--their lament is 
difficult to countenance given the many ways in which their boss's 
manifest authoritarian tendencies, disdain for judicial independence 
and a free press, and attacks on women and religious and ethnic 
minorities are alienating allies and emboldening human rights abusers 
and kleptocrats around the world.
    It therefore came as a surprise on multiple levels, when, in the 
week just before Christmas--a time generally reserved for burying news, 
not making it--an administration starved of positive stories to trumpet 
when it comes to America's reputation abroad inexplicably decided to 
roll out what is, safe to say, the most positive, broad-based human 
rights-related measure of its tenure.
    That's a shame, because what the Trump administration did is a big 
deal. In a good way.
    To briefly recap: with much of official Washington already checked 
out for the holidays, on Dec. 21, the Trump administration released its 
initial tranche of sanctions designations under a new executive order 
tied to the Global Magnitsky Human Rights Accountability Act.
    The law, which Congress passed in 2016, provides the executive 
branch with authority to administer targeted financial and visa-related 
sanctions against foreign individuals and entities if they are found to 
have committed human rights violations or engaged in corrupt practices.
    While news outlets, human rights organizations (including my own), 
and key congressional champions of the Global Magnitsky Act, and its 
Russia-specific predecessor, put out articles and Statements focused on 
the 15 individuals and 37 entities sanctioned by the U.S. Government, 
we all likely missed the real story, which centers not on the 
designations, but on the executive order that accompanied them.
    That order (number 13818, for those keeping track at home), 
entitled ``Blocking the Property of Persons Involved in Serious Human 
Rights Abuse or Corruption,'' holds great potential as a tool to 
advance human rights policy.
    But before delving into why it could prove to be quite powerful, 
it's worth spending some time on a few of the specific 52 sanctions 
designations, which provide insight into the Trump administration's 
policies and the inevitable bureaucratic battles that go on behind the 
scenes.
    So, Who Was Sanctioned?
    First, the fact that the Trump administration designated any human 
rights abusers and corrupt actors under an executive order tied to the 
Global Magnitsky Act--which, we should remember, is an elective 
authority--is a significant achievement.
    I say this not because of President Donald Trump's clear disdain 
for nearly all of the precepts underpinning human rights as a concept, 
or because of the original Magnitsky Act's cameo role in events 
currently under investigation by Special Counsel Robert Mueller.
    Instead, more prosaically, it's significant because it's likely 
that many of the sanctions designations unveiled in December were 
opposed by several of the State Department's regional bureaus, which 
tend to be skeptical of any actions that involve increasing friction in 
a bilateral diplomatic relationship, even when dealing with foreign 
governments with truly odious records.
    In light of this perennial bureaucratic dynamic, it's worth 
highlighting that introducing 13 primary sanctions designations on 
individuals, and an additional 39 secondary designations (on two 
individuals and 37 entities), in the annex to the new executive order 
is a pretty big deal.
    Officials within the State Department's bureaus of Economic and 
Business Affairs, Democracy, Human Rights and Labor, and International 
Narcotics and Law Enforcement each deserve credit for the action, as 
does the peculiarly named directorate for International Organizations 
and Alliances at the National Security Council, which coordinates 
multilateral and human rights policy.
    The same goes for officials within the Treasury Department's Office 
of Foreign Assets Control (OFAC), and particularly for Treasury Under 
Secretary for Terrorism and Financial Intelligence (and acting Deputy 
Secretary) Sigal Mandelker, who appears to have led the charge on 
Global Magnitsky within the administration.
    Raw numbers of individuals and entities designated, of course, are 
a poor metric for impact. That said, those that feel that the United 
States can--and should--walk and chew gum at the same time concerning 
our relations with repressive and/or corrupt foreign governments 
notched a few meaningful victories.
    The administration's decision to sanction Russian Prosecutor 
General Yuri Chaika's son Artem, particularly when coupled with the 
announcement of sanctions levied against Chechen warlord Ramzan Kadyrov 
and a key lieutenant on Dec. 20 under the Russia-specific version of 
the Magnitsky law, sent a strong signal to the Kremlin that President 
Vladimir Putin's cronies no longer enjoy limitless impunity.
    Other noteworthy designations under Global Magnitsky included Dan 
Gertler, an Israeli billionaire alleged to have used his relationship 
with Congolese president Joseph Kabila to net billions of dollars in 
extractives-related gains; Benjamin Bol Mel, a business magnate alleged 
to have profited from his ties to South Sudanese President Salva Kiir; 
and Gao Yan, a Chinese security official allegedly linked to the death 
in custody of human rights activist Cao Shunli.
    In terms of political and financial impact, each of these 
designations is likely to hit home with its intended target.
    Perhaps most importantly, particularly when viewed from the 
perspective of the U.S. government's ability to employ the Global 
Magnitsky Act to counter human rights abuses in near-real time, was the 
government's decision to sanction Burmese military official Maung Maung 
Soe.
    As the former chief of the Burmese Army's Western command, Soe is 
alleged to have served as a key overseer of the atrocities recently 
committed against Rakhine State's Rohingya population.
    His designation reflects the use of Magnitsky sanctions at their 
most sophisticated, both in terms of responsiveness to real world 
events and in using the authority's scalpel-like precision to isolate 
individuals or factions within a larger governmental structure.
    Last on the positive side of the ledger, the government's initial 
designations demonstrated an apparent, if also circumscribed, 
responsiveness to recommendations from NGO's and Members of Congress.
    In a clear signal that they wanted to involve actors beyond the 
executive branch in the process of researching would-be sanctions 
designations, Global Magnitsky's authors wrote into the law that ``the 
President shall consider information provided jointly by the 
chairperson and ranking member of each of the appropriate congressional 
committees; and credible information obtained by other countries and 
nongovernmental organizations that monitor violations of human 
rights.''
    To its credit, the Trump administration seems to have taken this 
instruction to heart. The sanctions applied against Soe, Chaika, 
Gertler, Gao, and Bol Mel, as well as Nicaraguan Supreme Electoral 
Council President Roberto Jose Rivas Reyes, each reflect either 
explicit recommendations or more general concerns raised by watchdog 
groups and/or Members of Congress.
    This development is likely to strike an appropriate amount of fear 
into human rights violators and corrupt actors around the world, just 
as the Act's authors intended.

Glaring Omissions

    To be sure, in many additional cases, the administration clearly 
chose not to act on information provided by outside groups and elected 
officials. Yet in so doing, it nevertheless seems to have left the door 
open to future action, as government officials have indicated that they 
continue to investigate information provided by external sources, and 
intend to use Global Magnitsky on a continuing basis.
    To the degree that these goals are operationalized, they are likely 
to be applauded by the Act's champions, and leave criminals and human 
rights abusers on edge.
    Notwithstanding these plaudits, the administration's initial list 
of sanctions designees still left much to be desired. While the number 
of designations mentioned earlier is sizable when compared to most 
initial EO annexes that derive their authority from the International 
Emergency Economic Powers Act (50 U.S.C 1701), they are clearly 
miniscule when viewed from the perspective of worldwide human rights 
violations and grand corruption.
    In particular, the blanket non-inclusion of individuals and 
entities from the Middle East (Gertler aside) in the EO annex is 
glaring, given the massive scope of human rights violations and 
corruption endemic in the region. The Trump administration appears to 
have declined to act on credible information provided by outside groups 
concerning abuses in Saudi Arabia, Bahrain, and Egypt, among other 
countries.
    This decision constituted a particularly significant letdown for 
human rights activists in Egypt. Notwithstanding Trump's belief that 
Egyptian President Abdel Fattah el-Sisi has ``done a tremendous job 
under trying circumstance (sic),'' Sisi's repressive counterterrorism 
tactics and attacks on civil society are leading to a well-documented 
cycle of radicalization and violence that implicate American security 
interests.
    In an environment in which political imprisonment and torture are 
rife, and terror attacks are increasing, the fact that the U.S. 
Government elected to ignore credible information submitted by human 
rights NGO's--including first-hand testimony from torture survivors--
can't help but be seen as a major missed opportunity.
    That such a decision occurred shortly after the administration 
elected to withhold a significant portion of military aid earmarked for 
Egypt on human rights grounds makes the decision even more of a head-
scratcher.
    A similar critique can be levied against the government for its 
decision not to impose a single human rights-related designation in 
Central Asia, home to several of the most repressive governments on 
earth, and any number of U.S. security partners whose governments are 
engaged in large-scale human rights violations, from the Philippines to 
Turkey to Ethiopia.
    While perhaps not entirely surprising, the decision not to impose 
sanctions against individuals from these countries leaves the U.S. 
Government open to credible charges that it is engaging in selective 
application of human rights standards.
    This dynamic, if not arrested, is ultimately a grave threat to 
American legitimacy when speaking about human rights, and our (damaged, 
but still intact) reputation as a credible proponent of the notion that 
all States should adhere to the commitments we've made to protect 
fundamental freedoms.
    One need only reopen one's dusty copy of Jeane Kirkpatrick's 
``Dictatorships and Double Standards'' to recognize that the idea that 
the United States should view human rights policy as a cudgel with 
which to beat our enemies is nothing particularly new. Nevertheless, 
the concept seems to be experiencing something of an intellectual 
renaissance at present.
    For all of its potential as a groundbreaking means to protect 
victims of horrific violence and administer some form of accountability 
for corruption, the Global Magnitsky Act contains the seeds of its own 
destruction if it is wielded in a manner that erodes its own 
credibility. On this front, it remains to be seen whether the tool 
evolves into what was envisioned by its proponents, or into something 
more cynical.
    Which brings me to Executive Order 13818.

Loosening the Language--a Potential Game Changer?

    Under the International Emergency Economic Powers Act (IEEPA), 
Congress authorized the president to exercise certain emergency powers 
if s/he declares a particular situation a national emergency due to an 
``unusual and extraordinary threat . . . to the national security, 
foreign policy, or economy of the United States.''
    Making a national emergency declaration is thus a statutory 
requirement for the executive branch to announce most sanctions 
programs implemented by Treasury's OFAC.
    At times, the legal requirement to declare a situation an ``unusual 
and extraordinary threat to the national security of the United 
States'' in order to levy sanctions on human rights grounds has 
provided human rights violators with ample opportunity to turn the 
United States' words against it.
    The most striking example of this dynamic occurred in early 2015, 
when, in order to sanction seven Venezuelan government officials for 
human rights violations, the Obama Administration declared the country 
an ``extraordinary threat to U.S. national security.''
    While any sanctions announcements were sure to elicit a furious 
response from the government of President Nicolas Maduro, Venezuela's 
leaders announced that the U.S. declaration signaled an intention to 
attack their country, and used it to further undercut Venezuela's 
political opposition and human rights community.
    The hard-won lesson of this episode in part motivated Congress to 
grant new authorities under the Global Magnitsky Act. By granting 
global sanctions authority independent from IEEPA, the Global Magnitsky 
Act provides the executive branch with the ability to levy sanctions 
against certain individuals in any country for human rights violations 
or corruption without having to resort to establishing a country-wide 
national emergency declaration.
    Executive Order 13818 takes this approach one step further, and 
draws upon the authority of both the Global Magnitsky Act and IEEPA, as 
well as the Immigration and Nationality Act of 1952, to establish an 
extremely flexible human rights and anti-corruption accountability tool 
with global reach.
    The executive order's ambition is articulated in its preamble, in 
which the president finds that ``the prevalence and severity of human 
rights abuse and corruption.have reached such scope and gravity that 
they threaten the stability of international political and economic 
systems.''
    The president goes on to say that he has therefore determined that 
``serious human rights abuse and corruption around the world constitute 
an unusual and extraordinary threat to the national security, foreign 
policy, and economy of the United States,'' and thereby constitute a 
national emergency.
    Putting aside the absurdity that these Wilsonian-like words are 
supposed to reflect Trump's actual views, they're something to behold. 
They also seem clearly at odds with the administration's ``America 
First'' foreign policy, as recently articulated in its National 
Security Strategy (NSS), which the White House released 3 days prior to 
the EO.
    Instead of reflecting his NSS, Trump's preamble seems to most 
closely resemble the text of President Barack Obama's August 4, 2011 
directive on mass atrocities, which both mandated the creation of an 
interagency Atrocities Prevention Board and declared that ``Preventing 
mass atrocities and genocide is a core national security interest and a 
core moral responsibility of the United States.''
    Obama-era proponents of a globe-spanning anti-atrocities sanctions 
regime labored unsuccessfully for several years to craft a universal 
sanctions authority similar to, and possibly less expansive than, this 
new Trump executive order.
    In internal policy discussions, arguments made against such an 
executive order included that the tool would be used too frequently, 
thereby taxing internal resources, and, somewhat contradictorily, that 
it might never be used at all, thereby disappointing the human rights 
community.
    Whatever the concerns of decisionmakers within the last 
administration, they have clearly been laid aside by Treasury Secretary 
Steven Mnuchin and other senior Trump administration officials. These 
policymakers appear to have crafted EO 13818 in a manner that provides 
significant flexibility, which is lacking under the Global Magnitsky 
Act.
    For example, the Global Magnitsky Act requires that the crime in 
question constitute a ``gross violation of internationally recognized 
human rights,'' or a ``GVHR.'' That term is codified at 22 USC 
Sec. 2304(d)(1) as including:

Torture or cruel, inhuman, or degrading treatment or punishment, 
prolonged detention without charges and trial, causing the 
disappearance of persons by the abduction and clandestine detention of 
those persons, and other flagrant denial of the right to life, liberty, 
or the security of person.

    Given the exacting evidentiary requirements involved in meeting 
this standard, government lawyers have consistently appeared more 
inclined to approve sanctions cases dealing with instances of extra-
judicial killing, torture, and rape than they have been when cases 
involve the denial of liberty inherent in a politically motivated 
prosecution and prison sentence.
    When I'm approached by activists from a country whose government 
routinely imprisons journalists, members of the political opposition, 
or human rights defenders, they're frequently surprised to hear that 
the Global Magnitsky Act likely offers them no remedy.
    Similarly, serious crimes otherwise deserving of U.S. scrutiny are 
frequently precluded for consideration by the Act's requirement that a 
victim be either a) someone working ``to expose illegal activity 
carried out by government officials,'' or b) someone who seeks to 
``obtain, exercise, defend, or promote internationally recognized human 
rights and freedoms.''
    These ``whistleblower'' and ``human rights activist'' provisions 
have generally excluded cases that a casual observer might feel were 
otherwise ripe for sanctions.
    Consider, for instance, the widespread extra-judicial killing of 
drug users by government security forces in the Philippines, or the 
grievous crimes perpetrated against Burma's Rohingya population. In the 
latter case, while one could argue that the Rohingya are targeted by 
Burmese security forces expressly because of their status as a 
religious and ethnic minority group, it would not strike me as far-
fetched to hear a U.S. Government lawyer argue that the law lacked 
applicability, given that few, if any, of the individuals targeted were 
actively working to obtain or exercise their rights.
    Executive Order 13818 addresses both of these limitations, among 
others. As stated in both its preamble and in section 1(ii)(A), the 
GVHR language of the Magnitsky Act has been replaced with a standard 
defined as ``serious human rights abuse.''
    While it remains to be seen how the government's lawyers have or 
will interpret this standard, the language of the EO is clearly more 
permissive. Additionally, the change from ``violation'' to ``abuse'' 
appears to broaden the scope of permissible sanctions designations 
beyond state actors to conceivably anyone found to have committed a 
covered action.
    The EO simply omits the Magnitsky Acts' human rights activist 
provision. Rather than needing to show that a covered crime was 
perpetrated against someone working to ``obtain, exercise, defend, or 
promote'' human rights, the order merely states that the U.S. 
Government can sanction any foreign person found ``to be responsible 
for or complicit in, or to have directly or indirectly engaged in, 
serious human rights abuse.'' This omission decidedly widens the 
regime's potential applicability. Rodrigo Duterte, you've been warned.
    And that's not all. Similar to its loosening of language with 
respect to human rights abuses, EO 13818 substitutes ``corruption'' for 
the Global Magnitsky Act's ``acts of significant corruption'' when 
describing the second major category of offenses covered under its 
sanctions authority.
    Here, too, one can reasonably expect that the change in language 
was intended to allow the government more room for maneuver in terms of 
its future designations.
    Finally, a fourth change in EO 13818 from the Global Magnitsky Act 
appears to dramatically lower the standard under which an official can 
be held responsible for human rights abuses or acts of corruption that 
take place under his or her watch, but not necessarily with his or her 
direct participation.
    Under the Global Magnitsky Act, if the U.S. Government wanted to 
designate, say, a senior foreign security service official for acts of 
torture that occurred in a jail he controlled under a theory of 
``command responsibility,'' it generally needed to satisfy three 
criteria.
    These include that the designee maintained effective control over 
the subordinate individual(s) who directly committed the alleged acts 
of torture; that the designee had actual or constructive knowledge that 
his subordinates were about to commit, were committing, or had 
committed torture; and that the designee failed to take necessary and 
reasonable measures to prevent or halt the torture, or to investigate 
it in a meaningful effort to punish the perpetrators under his command.
    Executive Order 13818 sidesteps many of these requirements by 
establishing a status-based relationship between officials and 
designated entities. Its section 1(ii)(C) notes that the U.S. 
Government can sanction any foreign person determined ``to be or have 
been a leader or official of an entity that has engaged in, or whose 
members have engaged in'' serious human rights abuse or corruption.
    It also allows for the designation of a leader or official of ``an 
entity whose property and interests in property are blocked pursuant to 
this order as a result of activities related to the leader's or 
official's tenure.''
    The practical effect of this change could be quite significant. The 
example of Beijing Public Security Bureau official Gao Yan is 
illustrative. Under section 1(ii)(C), Gao's designation effectively 
opens all officials of the Beijing Public Security Bureau, or at least 
the Chaoyan Branch subcomponent in which he worked, to the potential of 
sanction, given that the U.S. Government has established a relationship 
between the bureau and the death in custody of Cao Shunli. The 
potential for secondary sanctions based on such status is seemingly 
vast.
    To be sure, none of the provisions written into EO 13818 will 
automatically result in additional, sanctions on human rights abusers 
and corrupt actors in the future.
    At the end of the day, as with the Global Magnitsky Act, the Trump 
administration's executive order provides the U.S. Government with a 
tool it can elect to use, or not, as it sees fit. How it does so is an 
important question moving forward.
    A sanctions regime as broadly applicable as EO 13818 should be 
managed both effectively and appropriately, and used neither 
capriciously nor arbitrarily. On this point, time will tell.
    In the meantime, what we can say with certainty is that an 
administration unlikely to be remembered for its positive impact on 
human rights promotion or the global fight against corruption--to say 
the least--just formalized a policy tool that supersedes and improves 
upon existing law dealing with these issues.
    That it did so in a manner that resulted in minimal attention is 
puzzling. But we should take what we can get, and offer credit where it 
is due.

Rob Berschinski is Senior Vice President for Policy and Human Rights 
First and Former Deputy Assistant Secretary of State for Democracy, 
Human Rights, and Labor under the Obama Administration.


  Supporters brag about his modest lifestyle, but Iran's ruler runs a 
                 billion-dollar corporate conglomerate.




    The Trump administration already has offered rhetorical support to 
Iran's antigovernment protesters. Now, nearly a month after the 
demonstrations began, how can the U.S. provide material help? Follow 
the money.
    Supreme Leader Ayatollah Ali Khamenei's supporters brag about his 
modest lifestyle. They fail to mention that he runs a multibillion-
dollar corporate conglomerate to fund his political patronage networks. 
His three most valuable possessions are the Execution of Imam 
Khomeini's Order, or EIKO; the Mostazafan Foundation; and the Astan 
Quds Razavi. These businesses have an interest in nearly every Iranian 
industry and are worth approximately $200 billion, according to our 
estimates.
    The entities acquired a considerable share of their assets from the 
systematic confiscation of private property that followed the Islamic 
Revolution of 1979. They don't pay taxes, and only the supreme leader's 
office can audit them. They use their political connections to 
outmaneuver their rivals and to win lucrative government contracts. It 
is no wonder so many Iranians, deprived of basic necessities, resent 
their leaders.
    A 2013 investigation by Reuters estimated that EIKO was worth 
around $95 billion, with more than half of its assets in real estate. 
Established in the late 1980s, its three main holdings are the Tadbir 
Group, Rey Group and Barkat Foundation. Dozens of subsidiaries and 
front companies make it hard to ascertain the full extent of the 
network.
    Ayatollah Ruhollah Khomeini, Mr. Khamenei's predecessor, created 
the Mostazafan Foundation after the Islamic Revolution. Designed to 
seize and manage assets owned by the deposed royal family and its 
associates, the foundation now controls hundreds of companies. A few 
months ago it published annual financial statements that declared its 
assets to be around $16 billion--likely a deliberate understatement.
    The third entity is Astan Quds Razavi, whose business arm is the 
Razavi Economic Organization. Astan has tight control over the economy 
of three southern provinces of Iran, where it owns companies in the 
lucrative energy and agriculture industries. Its real-estate portfolio 
is valued at $20 billion, according to BBC Persian, and it owns nearly 
half of the land in Mashhad, where the recent protests began.
    The U.S. Treasury in 2013 enacted sanctions against EIKO and 37 
subsidiaries. A Treasury press release said the entity's goal is ``to 
generate and control massive, off-the-books investments, shielded from 
the view of the Iranian people and international regulators.'' The 
Obama administration lifted the sanctions as part of the 2015 nuclear 
deal. Never mind that their original designation had nothing to do with 
Iran's nuclear program.
    Companies owned or controlled by the state, including the Khamenei 
conglomerate and foundations, were the biggest beneficiaries of the 
nuclear accord. Since the deal was struck in July 2015, nearly 110 
business and investment deals have been signed with Iranian companies. 
According to Reuters, 90 of those entities are owned or controlled by 
the state.
    A January 2017 investigation by Reuters found that companies 
controlled by EIKO signed at least five contracts with foreign firms. 
Those include a $10 billion agreement to build oil refineries with 
South Korea's Daewoo Engineering and Construction Co. and Hyundai 
Engineering and Construction. The Spanish and Danish pharmaceutical 
companies Chemo Group and Novo Nordisk have also signed deals to work 
with EIKO.
    The Mostazafan Foundation and Astan Quds Razavi have contracts with 
foreign companies too. Bon Rail, owned by the Mostazafan Foundation, 
signed a memorandum of understanding with the German firm Deutsche 
Bahn, to improve its railroad services. The foundation is also involved 
in a $1.5 billion deal with Daewoo.
    While these entities are far from transparent, the U.S. knows 
enough to target them with sanctions. The Foundation for Defense of 
Democracies has identified 146 Khamenei-owned companies and 144 
executives and board members associated with these companies. The Trump 
administration can use the Global Magnitsky Human Rights Accountability 
Act of 2016 to isolate the Khamenei business empire, freeze its assets, 
and penalize international companies that enrich the Iranian regime.
    With President Trump and the Iranian protesters on the same side 
against the supreme leader and his criminal regime, now is the time to 
strike.
    Mr. Dubowitz is chief executive of the Foundation for Defense of 
Democracies, where Mr. Ghasseminejad is a research fellow.

    This op-ed appeared in The Wall Street Journal, January 23, 2018, 
print edition.


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\1\  This article first appeared on Just Security.
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