[Congressional Record Volume 156, Number 133 (Wednesday, September 29, 2010)]
[Senate]
[Pages S7795-S7797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARDIN (for himself and Mr. McCain):
  S. 3881. A bill to require the Secretary of State to identify 
individuals responsible for the detention, abuse, or death of Sergei 
Magnitsky or for the conspiracy to defraud the Russian Federation of 
taxes on corporate profits through fraudulent transactions and lawsuits 
against Hermitage, and to impose a visa ban and certain financial 
measures with respect to such individuals, until the Russian Federation 
has thoroughly investigated the death of Sergei Magnitsky and brought 
the Russian criminal justice system into compliance with international 
legal standards, and for other purposes; to the Committee on the 
Judiciary.
  Mr. CARDIN. Mr. President, I rise today to introduce the Justice for 
Sergei Magnitsky Act of 2010.
  As Chairman of the Commission on Security and Cooperation in Europe, 
I first learned about Sergei Magnitsky at a hearing I held on Russia in 
June 2009.
  Sergei Magnitsky was a young Russian anti-corruption lawyer employed 
by a prominent American law firm in Moscow who blew the whistle on the 
largest known tax rebate fraud in Russian history perpetrated by high 
level Russian officials. After discovering this complex and brazen 
corruption scheme, Sergei Magnitsky dutifully testified to the 
authorities detailing the conspiracy to defraud the Russian people of 
approximately $230 million and naming the names of those officials. 
Shortly after his testimony, Sergei was arrested by subordinates of the 
very law enforcement officers he had implicated in this crime. He was 
held in detention for nearly a year without trial under torturous 
conditions and died in an isolation cell while prison doctors waited 
outside his door on November 16, 2009.
  In April of this year I sent a letter to our Secretary of State 
urging a visa ban for Russian officials connected to the death of 
Sergei Magnitsky. I also released a list of 60 senior officials from 
the Russian Interior Ministry, Federal Security Service, Federal Tax 
Service, Regional Courts, General Prosecutor's Office, and Federal 
Prison Service, along with detailed descriptions of their involvement 
in this matter. My bill reminds the Department of State that I have not 
forgotten and will not forget this issue. In fact, this bill goes a bit 
further adding an asset freeze provision to be applied against those 
implicated in this tragic affair.
  Sergei Magnitsky, a lawyer with what should have been a promising 
career ahead of him died at age 37 leaving behind a mother, a wife, and 
two boys who never saw him or even heard his voice after his arrest. 
Since his death, no one has been held accountable and some of those 
involved even have been promoted. Also, there is strong evidence that 
the criminal enterprise that stole the money from the Russian treasury 
and falsely imprisoned and tortured Magnitsky, continues to operate. In 
fact, the American founding partner of Magnitsky's firm fled Russia for 
his safety in the months following his colleague's death after learning 
that a similar fraud scheme was attempted by the same criminals.
  This is a heartbreaking story, and let me be clear, my bill does not 
even attempt to deliver justice as that would be impossible since 
nothing can bring Sergei back. There are obvious limits to what we can 
do as Americans, but we can deny the privilege of visiting our country 
and accessing our financial system. This bill sends a strong message to 
those who are currently acting with impunity in Russia that there will 
be consequences for corruption should you wish to travel and invest 
abroad. I hope others, especially in the EU, UK, and Canada will adopt 
similar sanctions.
  This measure is also about the future and protecting our business 
interests abroad by making it clear that, even if your home country 
allows you to trample the rule of law, we will not stand by and become 
an unwitting accomplice in your crimes.
  Sadly, Sergei Magnitsky joins the ranks of a long list of Russian 
heroes who lost their lives because they stood up for principle and for 
truth. These ranks include Natalia Estemirova, a brave human rights 
activist shot in the head and chest and stuffed into the trunk of a 
car, Anna Politkovskaya, an intrepid reporter shot while coming home 
with an armful of groceries, and too many others.
  Often in these killings there is a veil of plausible deniability, 
gunmen show up in the dark and slip away into the shadows, but Sergei, 
in inhuman conditions managed to document in 450 complaints exactly who 
bears responsibility for his false arrest and death. We must honor his 
heroic sacrifice and do all we can to learn from this tragedy that 
others may not share his fate.
  Few are made in the mold of Sergei Magnitsky--able to withstand 
barbaric depravations and cruelty without breaking and certainly none 
of us would want to be put to such a test. For those corrupt officials 
who abuse their office, Sergei's life stands as a rebuke to what is 
left of their consciences. To those who suffer unjustly, Sergei's 
experience can be a reminder to draw strength from and to know that 
they are not completely alone in their struggle.
  In closing, I wish to address those prominent Russian human rights 
defenders who just a couple weeks ago appealed to our government and to 
European leaders to adopt the sanctions I called for in my April letter 
to Secretary Clinton. You are the conscience of Russia and we have 
heard your plea. You are not alone, and while you and your fellow 
citizens must do the heavy lifting at home, I assure you that ``human 
rights'' are not empty words for this body and for my government. I 
urge my colleagues to support this bill.

[[Page S7796]]

  Mr. President, I ask unanimous consent that the text of the bill and 
a letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3881

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Justice for Sergei Magnitsky 
     Act of 2010''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The United States supports the people of the Russian 
     Federation in their efforts to realize their full economic 
     potential and to advance democracy, human rights, and the 
     rule of law.
       (2) The Russian Federation--
       (A) is a member of the United Nations, the Organization for 
     Security and Cooperation in Europe, and the International 
     Monetary Fund;
       (B) has ratified the Convention against Torture and Other 
     Cruel, Inhuman or Degrading Treatment or Punishment, the 
     International Covenant on Civil and Political Rights, the 
     International Covenant on Economic, Social and Cultural 
     Rights, and the United Nations Convention against Corruption; 
     and
       (C) is bound by the legal obligations set forth in the 
     European Convention on Human Rights.
       (3) States voluntarily commit themselves to respect 
     obligations and responsibilities through the adoption of 
     international agreements and treaties, which must be observed 
     in good faith in order to maintain the stability of the 
     international order. Human rights are an integral part of 
     international law, and lie at the foundation of the 
     international order. The protection of human rights, 
     therefore, particularly in the case of a country that has 
     incurred obligations to protect human rights under an 
     international agreement to which it is a party, is not left 
     exclusively to the internal affairs of that country.
       (4) Good governance and anti-corruption measures are 
     instrumental in the protection of human rights and in 
     achieving sustainable economic growth, which benefits both 
     the people of the Russian Federation and the international 
     community through the creation of open and transparent 
     markets.
       (5) Systemic corruption erodes trust and confidence in 
     democratic institutions, the rule of law, and human rights 
     protections. This is the case when public officials are 
     allowed to abuse their authority with impunity for political 
     or financial gains in collusion with private entities.
       (6) The President of the Russian Federation, Dmitry 
     Medvedev, has addressed corruption in many public speeches, 
     including stating in his 2009 address to Russia's Federal 
     Assembly, ``[Z]ero tolerance of corruption should become part 
     of our national culture. . . . In Russia we often say that 
     there are few cases in which corrupt officials are 
     prosecuted. . . . [S]imply incarcerating a few will not 
     resolve the problem. But incarcerated they must be.''. 
     President Medvedev went on to say, ``We shall overcome 
     underdevelopment and corruption because we are a strong and 
     free people, and deserve a normal life in a modern, 
     prosperous democratic society.''. Furthermore, President 
     Medvedev has acknowledged Russia's disregard for the rule of 
     law and used the term ``legal nihilism'' to describe a 
     criminal justice system that continues to imprison innocent 
     people.
       (7) The systematic abuse of Sergei Magnitsky, including his 
     repressive arrest and torture in custody by the same officers 
     of the Ministry of the Interior of the Russian Federation 
     that Mr. Magnitsky had implicated in the embezzlement of 
     funds from the Russian Treasury and the misappropriation of 3 
     companies from his client, Hermitage, reflects how deeply the 
     protection of human rights is affected by corruption.
       (8) The denial by all state bodies of the Russian 
     Federation of any justice or legal remedies to Mr. Magnitsky 
     during the nearly 12 full months he was kept without trial in 
     detention, and the impunity of state officials he testified 
     against for their involvement in corruption and the carrying 
     out of his repressive persecution since his death, shows the 
     politically motivated nature of the persecution of Mr. 
     Magnitsky.
       (9) Mr. Magnitsky died on November 16, 2009, at the age of 
     37, in Matrosskaya Tishina Prison in Moscow, Russia, and is 
     survived by a mother, a wife, and 2 sons.
       (10) There is extensive evidence that public officials from 
     the Ministry of the Interior of the Russian Federation, the 
     Russian federal tax authorities, the Prosecutor General's 
     Office of the Russian Federation, and the Russian Federal 
     Security Service, as well as regional courts and the prison 
     system of the Russian Federation, have abused their powers 
     and positions to commit serious human rights violations, 
     embezzled funds from the Russian Treasury, and retaliated 
     against whistleblowers.
       (11) While he was in detention, Sergei Magnitsky called 
     himself a hostage of officials who misappropriated companies 
     from his client, the Hermitage Fund, and embezzled funds from 
     the Russian Treasury. He said that his criminal prosecution, 
     arrest, and detention were organized as a retribution by 
     police officers who had the full knowledge of his innocence.
       (12) The Public Oversight Commission of the City of Moscow 
     for the Control of the Observance of Human Rights in Places 
     of Forced Detention, an organization empowered by Russian law 
     to independently monitor prison conditions, concluded, ``A 
     man who is kept in custody and is being detained is not 
     capable of using all the necessary means to protect either 
     his life or his health. This is a responsibility of a state 
     which holds him captive. Therefore, the case of Sergei 
     Magnitsky can be described as a breach of the right to life. 
     The members of the civic supervisory commission have reached 
     the conclusion that Magnitsky had been experiencing both 
     psychological and physical pressure in custody, and the 
     conditions in some of the wards of Butyrka can be justifiably 
     called torturous. The people responsible for this must be 
     punished.''.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Admitted; alien; spouse.--The terms ``admitted'', 
     ``alien'', and ``spouse'' have the meanings given those terms 
     in section 101(a) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)).
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Foreign Affairs and the Committee on 
     Financial Services of the House of Representatives; and
       (B) the Committee on Foreign Relations and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate.
       (3) Financial institution; domestic financial agency; 
     domestic financial institution.--The terms ``financial 
     institution'', ``domestic financial agency'', and ``domestic 
     financial institution'' have the meanings given those terms 
     in section 5312 of title 31, United States Code.
       (4) Parent.--The term ``parent'' has the meaning given that 
     term in section 101(b) of the Immigration and Nationality Act 
     (8 U.S.C. 1101(b)).
       (5) United states person.--The term ``United States 
     person'' means--
       (A) a United States citizen or an alien lawfully admitted 
     for permanent residence to the United States; or
       (B) an entity organized under the laws of the United States 
     or of any jurisdiction within the United States, including a 
     foreign branch of such an entity.

     SEC. 4. IDENTIFICATION OF INDIVIDUALS RESPONSIBLE FOR THE 
                   DETENTION, ABUSE, AND DEATH OF SERGEI MAGNITSKY 
                   AND FOR THE CONSPIRACY TO DEFRAUD THE RUSSIAN 
                   FEDERATION OF TAXES ON CERTAIN CORPORATE 
                   PROFITS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary of State, in 
     consultation with the Secretary of the Treasury, shall 
     publish a list of each individual the Secretary has reason to 
     believe--
       (1) is responsible for the detention, abuse, or death of 
     Sergei Magnitsky;
       (2) conspired to defraud the Russian Federation of taxes on 
     corporate profits through fraudulent transactions and 
     lawsuits against the foreign investment company known as 
     Hermitage and to misappropriate entities owned or controlled 
     by Hermitage; or
       (3) participated in efforts to conceal the detention, 
     abuse, or death of Sergei Magnitsky described in paragraph 
     (1) or the existence of the conspiracy described in paragraph 
     (2).
       (b) Updates.--The Secretary of State shall update the list 
     required by subsection (a) as new information becomes 
     available.
       (c) Notice.--The Secretary of State shall, to the maximum 
     extent practicable, provide notice and an opportunity for a 
     hearing to an individual before the individual is placed on 
     the list required by subsection (a).

     SEC. 5. INADMISSIBILITY OF CERTAIN INDIVIDUALS.

       (a) Ineligibility for Visas.--An alien is ineligible to 
     receive a visa to enter the United States and ineligible to 
     be admitted to the United States if the alien--
       (1) is an individual on the list required by section 4(a); 
     or
       (2) is the spouse, son, daughter, or parent of an 
     individual on that list.
       (b) Current Visas Revoked.--The Secretary of State shall 
     revoke, in accordance with section 221(i) of the Immigration 
     and Nationality Act (8 U.S.C. 1201(i)), the visa or other 
     documentation of any alien who would be ineligible to receive 
     such a visa or documentation under subsection (a).
       (c) Waiver for National Interests.--The Secretary of State 
     may waive the application of subsection (a) or (b) in the 
     case of an alien if the Secretary determines that such a 
     waiver is in the national interests of the United States. 
     Upon granting such a waiver, the Secretary shall provide to 
     the appropriate congressional committees notice of, and a 
     justification for, the waiver.

     SEC. 6. FINANCIAL MEASURES.

       (a) Special Measures.--The Secretary of the Treasury shall 
     instruct domestic financial institutions and domestic 
     financial agencies to take 1 or more special measures 
     described in section 5318A(b) of title 31, United States 
     Code, if the Secretary of the Treasury makes a determination 
     under section 5318A of such title with respect to money 
     laundering relating to the conspiracy described in section 
     4(a)(2).
       (b) Freezing of Assets.--The Secretary of the Treasury 
     shall freeze and prohibit all transactions in all property 
     and interests in property of an individual that are in the 
     United States, that come within the United States, or that 
     are or come within the possession or control of a United 
     States person if the individual--

[[Page S7797]]

       (1) is on the list required by section 4(a); or
       (2) acts as an agent of or on behalf of an individual on 
     the list in a matter relating to an act described in 
     paragraph (1), (2), or (3) of section 4(a).
       (c) Waiver for National Interests.--The Secretary of the 
     Treasury may waive the application of subsection (a) or (b) 
     if the Secretary determines that such a waiver is in the 
     national interests of the United States. Upon granting such a 
     waiver, the Secretary shall provide to the appropriate 
     congressional committees notice of, and a justification for, 
     the waiver.
       (d) Regulatory Authority.--The Secretary of the Treasury 
     shall issue such regulations, licenses, and orders as are 
     necessary to carry out this section.
       (e) Enforcement.--A person that violates, attempts to 
     violate, conspires to violate, or causes a violation of this 
     section or any regulation, license, or order issued to carry 
     out this section shall be subject to the penalties set forth 
     in subsections (b) and (c) of section 206 of the 
     International Emergency Economic Powers Act (50 U.S.C. 1705) 
     to the same extent as a person that commits an unlawful act 
     described in subsection (a) of such section.

     SEC. 7. REPORT TO CONGRESS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary of State and the 
     Secretary of the Treasury shall submit to the appropriate 
     congressional committees a report on the actions taken to 
     carry out this Act.
       (b) Updates.--The Secretary of State and the Secretary of 
     the Treasury shall submit an updated version of the report 
     required by subsection (a) as new information becomes 
     available.

     SEC. 8. EFFECTIVE DATE.

       This Act shall take effect on the date that is 90 days 
     after the date of the enactment of this Act.

     SEC. 9. TERMINATION.

       The provisions of this Act shall cease to be effective on 
     the date on which the Secretary of State and the Secretary of 
     the Treasury certify to the appropriate congressional 
     committees that--
       (1) the Government of the Russian Federation has conducted 
     a thorough and impartial investigation into--
       (A) the detention, abuse, and resulting death in custody of 
     Sergei Magnitsky; and
       (B) the conspiracy (described in section 4(a)(2)) to 
     defraud the Russian Federation of taxes on corporate profits 
     and to misappropriate entities owned or controlled by 
     Hermitage; and
       (2) the investigation described in paragraph (1) was 
     properly conducted, transparent, and free of political 
     influence;
       (3) the individuals responsible for the detention, abuse, 
     or resulting death of Sergei Magnitsky or for the conspiracy 
     referred to in paragraph (1)(B) have been brought to justice 
     according to the laws of the Russian Federation and pursuant 
     to the international legal obligations of the Russian 
     Federation; and
       (4) the Government of the Russian Federation--
       (A) has taken significant steps to bring the criminal 
     justice system and penal system of the Russian Federation 
     into compliance with applicable international legal 
     standards;
       (B) has substantially strengthened statutory protections 
     for individuals who disclose evidence of illegal government 
     activities; and
       (C) has recognized the contribution of Sergei Magnitsky to 
     the fight against corruption and for the rule of law.
                                  ____

                                            Commission on Security


                                    and Cooperation in Europe,

                                   Washington, DC, April 26, 2010.
     Hon. Hillary Rodham Clinton,
     Secretary of State, Washington, DC.
       Dear Secretary Clinton: I am writing to request the 
     immediate cancelation of U.S. visas held by a number of 
     Russian officials and others who are involved in significant 
     corruption in that country and who are responsible for last 
     year's torture and death in prison of the Russian anti-
     corruption lawyer, Sergei Magnitsky, who testified against 
     them. While there are many aspects of this case which are 
     impossible to pursue here in the United States, one step we 
     can take, however, is to deny the individuals involved in 
     this crime and their immediate family members the privilege 
     of visiting our country. The United States has a clear policy 
     of denying entry to individuals involved in corruption, and 
     it is imperative that the U.S. Department of State act 
     promptly on this matter.
       By way of brief background, on June 23, 2009, the Helsinki 
     Commission heard testimony from the CEO of Hermitage Capital, 
     Bill Browder, about a major crime committed by senior 
     Interior Ministry officials in Russia, along with others in 
     the Russian government and private sector. The crime, which 
     involved a fraudulent $230 million tax refund paid to the 
     criminal group, was exposed by Hermitage's lawyer, Sergei 
     Magnitsky. Through Mr. Browder's testimony we heard about the 
     plight of Mr. Magnitsky, who, after discovering the crime, 
     chose to testify against the Interior Ministry officers who 
     had carried it out. One month after his testimony he was 
     arrested in front of his wife and two young children in his 
     Moscow home by a team of Interior Ministry troopers reporting 
     directly to the officers Mr. Magnitsky had accused.
       Since our June hearing, this story has taken a tragic turn 
     for the worse. As highlighted in the 2009 State Department 
     Country Report of Human Rights in Russia, Sergei Magnitsky 
     was tortured in an attempt to force him to withdraw his 
     testimony and to incriminate himself and his client. His 
     detailed letters from prison attest to the inhuman conditions 
     in which he was kept for nearly a year without a trial. 
     During the course of his imprisonment he developed gallstones 
     and pancreatitis, but was denied any medical attention as he 
     continued to refuse to withdraw his testimony. On the night 
     of November 16, 2009, he died awaiting trial.
       Sergei Magnitsky's family were denied an independent 
     autopsy by the Russian authorities, who claimed he died of 
     natural causes. Members of Moscow's independent Prison 
     Oversight Commission, a local watchdog group, described 
     Magnitsky's death as ``intentional'' and ``murder'' and 
     highlighted the role of government officials and prison 
     administrators in his torture. Since the death, a number of 
     prison officials have been fired, but no one has been 
     prosecuted for his torture or death, nor for participating in 
     the corruption he exposed.
       While there is a limit to the direct action our government 
     can take in this case, we can take the concrete action to 
     ensure those public officials and others who share 
     responsibility for this crime should be denied entry visas to 
     the United States. As you know, the United States has the 
     policy of prohibiting individuals involved in corruption from 
     visiting our country, and the State Department is mandated by 
     the President to achieve this aim. Pursuant to Presidential 
     Proclamation 7750 (``To Suspend Entry as Immigrants or 
     Nonimmigrants of Persons Engaged in or Benefiting From 
     Corruption'' (12 January 2004)).
       The colleagues of Sergei Magnitsky and his attorneys have 
     provided to the Helsinki Commission a list of those 
     individuals involved in the $230 million tax refund fraud and 
     the subsequent torture and death of Sergei Magnitsky. The 
     list includes senior officials from the Russian Interior 
     Ministry, Federal Security Service, Federal Tax Service, 
     Arbitration Courts, General Prosecutor Office, and Federal 
     Prison Service, along with detailed descriptions of their 
     involvement.
       On this basis, I urge you to immediately cancel and 
     permanently withdraw the U.S. visa privileges of all those 
     involved in this crime, along with their dependents and 
     family members. Doing so will provide some measure of justice 
     for the late Mr. Magnitsky and his surviving family and will 
     send an important message to corrupt officials in Russia and 
     elsewhere that the U.S. is serious about combating foreign 
     corruption and the harm it does. It will also help to protect 
     U.S. companies operating in Russia who risk falling prey to 
     similar schemes in the future.
           Sincerely,
                                               Benjamin L. Cardin,
                                                         Chairman.
                                 ______