[Senate Report 112-191]
[From the U.S. Government Publishing Office]
Calendar No. 469
112th Congress Report
SENATE
2d Session 112-191
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SERGEI MAGNITSKY RULE OF LAW
ACCOUNTABILITY ACT OF 2011
_______
July 23, 2012.--Ordered to be printed
Mr. Kerry, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 1039]
The Committee on Foreign Relations, having had under
consideration the bill S. 1039, to impose sanctions on persons
responsible for the detention, abuse, or death of Sergei
Magnitsky, and for other purposes, reports favorably thereon,
with an amendment in the nature of a substitute, and recommends
that the bill do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Discussion.......................................................2
IV. Cost Estimate....................................................5
V. Evaluation of Regulatory Impact..................................6
VI. Changes in Existing Law..........................................6
I. PURPOSE
The purpose of this bill is to impose sanctions on persons
that were responsible for or benefited financially from the
detention, abuse, or death of Sergei Magnitsky, were involved
in the criminal conspiracy uncovered by Sergei Magnitsky, or
were responsible for extrajudicial killings, torture, or other
gross violations of internationally recognized human rights
committed against individuals seeking to expose illegal
activity carried out by officials of the Government of the
Russian Federation or to obtain, exercise, defend or promote
internationally recognized human rights and freedoms anywhere
in the world.
II. COMMITTEE ACTION
S. 1039 was introduced on May 19, 2011, by Senator Cardin.
On June 26, 2012, the committee considered S. 1039 and ordered
it reported, with amendments, by voice vote.
III. DISCUSSION
Section 2--Findings
Section 2 sets forth several findings, including that the
United States supports the people of the Russian Federation to
realize their full economic potential and to advance democracy,
human rights, and the rule of law; that the Russian Federation
is a member of several international organizations; that in
becoming parties to human rights treaties, governments
voluntarily undertake international obligations to respect and
encourage certain fundamental rights and freedoms and this is
an important objective of U.S. foreign policy; that good
governance and anticorruption measures are instrumental in the
protection of human rights, economic development, and the
creation of open markets; that systemic corruption erodes trust
and confidence in democratic institutions, the rule of law, and
human rights protections; that the Russian nongovernmental
organization INDEM has estimated that corruption amounts to
hundreds of billions of dollars a year; that former President
Medvedev of Russia often cited corruption as a serious problem
in his public remarks; that Presidential Proclamation 7750 of
January 12, 2004, allows the Secretary of State to suspend the
entry into the United States of aliens who are suspected of
participating in corrupt practices; that Sergei Magnitsky's
repressive arrest and torture was carried out by Russian
interior ministry officials that Mr. Magnitsky had implicated
in the embezzlement of funds from the Russian treasury and the
misappropriation of his client Hermitage; that the persecution
of Mr. Magnitsky was politically motivated; that the Public
Oversight Commission of the City of Moscow for the Control of
the Observance of Human Rights in Places of Forced Detention
concluded that ``the case of Sergei Magnitsky can be described
as a breach of the right to life''; that the Russian
President's Human Rights Council report indicated that
Magnitsky was investigated by the very officials he had
implicated in theft and fraud, that he was beaten by eight
guards with rubber batons on the day he died, and that an
ambulance crew was kept outside his cell until he was dead;
that the second trial, verdict, and sentence against former
Yukos executives Mikhail Khodorkovsky and Platon Lebedev evoke
serious concerns about the right to a fair trial and the
independence of the judiciary in the Russian Federation; that
Mr. Magnitsky's experience appears to be emblematic of a
broader pattern of disregard for the numerous domestic and
international human rights commitments of the Russian
Federation; that the deaths of a number of prominent Russians
illustrate the grave danger of exposing the wrongdoing of
officials of the Russian Federation or of seeking to obtain,
exercise, defend, or promote internationally recognized human
rights and freedoms; and that the people of the Russian
Federation, like people everywhere, deserve to have their human
rights and fundamental freedoms respected and that human rights
and fundamental freedoms are inalienable and universal in
character and thus bind all states.
Section 3--Definitions
Section 3 of the Act defines the terms ``admitted'',
``alien'', ``appropriate congressional committees'',
``financial institution'', and ``United States Person.''
Section 4--Identification of Persons Responsible for the detention,
abuse and death of Sergei Magnitsky and other gross violations
of human rights
Section 4(a) of the Act requires the Secretary of State, in
consultation with the Secretary of the Treasury, to submit to
the appropriate congressional committees a list of each person
the Secretary of State determines meets one of the following
categories of criteria:
(1) Persons responsible for the detention, abuse, or
death of Mr. Magnitsky; persons who participated in
efforts to conceal the legal liability for the
detention, abuse or death of Mr. Magnitsky; persons who
benefited financially from the detention, abuse, or
death of Mr. Magnitsky; or persons involved in the
criminal conspiracy uncovered by Mr. Magnitsky; or
(2) Persons responsible for extrajudicial killings,
torture, or other gross violations of internationally
recognized human rights committed against individuals
seeking: (A) to expose illegal activity carried out by
officials of the Russian Government; or (B) to obtain,
exercise, defend, or promote internationally recognized
human rights and freedoms, such as the freedoms of
religion, expression, association and assembly and the
rights to a fair trial and democratic elections,
anywhere in the world; or
(3) Persons who acted as an agent of or on behalf of
a person in a matter relating to an activity described
in paragraphs (1) or (2).
Section 4(b) of the Act requires the Secretary of State to
update the list required by subsection 4(a) as more information
becomes available.
Section 4(c) states that a person shall be removed from the
list required by section 4(a) if the Secretary of State
determines that the person did not engage in the activity for
which the person was added to the list.
Section 4(d) describes the form the list will take and the
extent of its public availability. It requires that, except as
permitted by subsections 4(d)(2)-(3), the list shall be
submitted in unclassified form and published in the Federal
Register. Section 4(d)(2) permits information to be submitted
in a classified annex if the Secretary of State determines that
it is necessary for the national security interests of the
United States to do so, and, prior to submitting a list
including a classified annex, provides the appropriate
congressional committees notice of and a justification for
including each person in the classified annex. Section 4(d)(3)
requires that, not later than 300 days after the date of
enactment and annually thereafter, the Secretary review the
classified annex and provide to the appropriate congressional
committees a justification for continuing to include each
person in such an annex.
Section 4(e) requires the Secretary of State to provide a
response not later than 120 days after receiving a written
request from the chairperson and ranking member of one of the
appropriate congressional committees concerning whether a
specific person meets the criteria for being added to the list
requires by subsection 4(a). The response may be submitted in
classified form if the Secretary determines that it is
necessary for the national security interests of the United
States to do so.
Section 4(f) clarifies that the Secretary of State shall
publish the list required by subsection 4(a) without regard to
the requirements of section 222(f) of the Immigration and
Nationality Act (8 U.S.C. 1202(f)) with respect to
confidentiality of records pertaining to the issuance or
refusal of visas or permits to enter the United States.
Section 5--Inadmissibility of Certain Aliens
This section provides that an alien is ineligible to
receive a visa to enter the United States and ineligible to be
admitted to the United States if the alien is on the list
required by section 4(a), and that 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 the Act. The application of
this section may be waived by the Secretary of State if the
Secretary determines that such a waiver is necessary to permit
the United States to comply with the Agreement between the
United Nations and the United States of America regarding the
Headquarters of the United Nations, signed June 26, 1947, and
entered into force November 21, 1947, or if the Secretary
determines that a waiver is in the national security interests
of the United States and provides, prior to granting such a
waiver, notice of and a justification for the waiver to the
appropriate congressional committees.
Section 6--Financial Measures
This section requires the Secretary of Treasury to freeze
and prohibit all transactions in property and interests in
property of a person that the Secretary, in consultation with
the Secretary of State, determines has engaged in an activity
described in paragraph (1), (2), or (3) of section 4(a) if such
property and interests in property are in the United States,
come within the United States, or come within the possession or
control of a United States person. The Secretary of the
Treasury may waive the application of this section if the
Secretary determines that such a waiver is in the national
security interests of the United States and, prior to granting
such a waiver, provides notice of and justification for the
waiver to the appropriate congressional committees.
Section 7--Report to Congress
This section requires the Secretary of State and Secretary
of Treasury to submit a report one year after the date of
enactment (and annually thereafter) to the appropriate
congressional committees. The report must describe the actions
taken to carry out the Act, including the number of times and
circumstances in which persons described in section 4(a) have
been added to the list during the year preceding the report and
if few or no such persons have been added during that year, the
reasons for not adding more persons to the list. The report
must also describe efforts to encourage the governments of
other countries to impose sanctions that are similar to the
sanctions imposed under the Act.
IV. COST ESTIMATE
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, July 5, 2012.
Hon. John F. Kerry,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1039, the Sergei
Magnitsky Rule of Law Accountability Act of 2012.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Sunita
D'Monte and Matthew Pickford.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
S. 1039--Sergei Magnitsky Rule of Law Accountability Act of 2012
S. 1039 would require the Departments of State and Treasury
to compile, publish, and annually report on a list of persons
responsible for the death of Sergei Magnitsky or human rights
violations in foreign countries. Listed persons would be
ineligible for entry into the United States, have any existing
visas revoked, and have their assets frozen.
Based on information from the Department of State, CBO
expects the Department would hire seven additional staff to
implement the bill's provisions at an annual cost of about
$200,000 per person. CBO further estimates that the
administrative costs to the Department of Treasury would be
insignificant each year and over the 5-year period. On that
basis, and adjusting for anticipated inflation, CBO estimates
that implementing S. 1039 would cost $6 million over the 2013-
2017 period, assuming the appropriation of the necessary
amounts.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
direct spending or revenues. Enacting S. 1039 would decrease
revenues from visa fees and increase revenues from civil and
criminal penalties imposed on those who violate the
regulations. CBO estimates that the provisions would affect few
people and that revenues deposited in the Treasury would not be
significant in any year. The legislation also would increase
direct spending from criminal penalties which are deposited in
the Crime Victims Fund, and spent in subsequent years. However,
CBO expects that any net effects associated with collecting and
spending such penalties would not be significant in any year.
S. 1039 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On June 29, 2012, CBO transmitted a cost estimate for H.R.
4405, the Sergei Magnitsky Rule of Law Accountability Act of
2012, as ordered reported by the House Committee on Foreign
Affairs on June 7, 2012. The House bill has some similarities
to S. 1039 but is restricted to human rights violations in
Russia, and thus, the estimate of H.R. 4405's cost is
correspondingly lower.
The CBO staff contacts for this estimate are Sunita D'Monte
and Matthew Pickford. The estimate was approved by Peter H.
Fontaine, Assistant Director for Budget Analysis.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that it is
unable to fully anticipate the regulatory impact resulting from
this legislation because the number of persons determined to
have committed the conduct set forth in section 4(a) of the Act
is not known at this time.
VI. CHANGES IN EXISTING LAW
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, the committee has determined that there
are no changes in existing legislation as a result of this
bill.