On December 21, 2017, the Trump Administration released a list of foreign nationals it has identified to be sanctioned in accordance with the Global Magnitsky Human Rights Accountability Act of 2016. In December 2016, we issued a client alert providing an overview of the legislation as it was being passed by Congress.
Based on the Sergei Magnitsky Rule of Law Accountability Act of 2012 – which authorized imposition of sanctions on Russian nationals who grossly violate human rights or engage in massive corruption – the Global Magnitsky Act greatly expands the aperture of U.S. sanctions law to apply penalties to any foreign national in any country. With passage of the Act, the Department of Treasury and the Department of State gained a potentially powerful tool to help uproot corruption and human rights abuses in regions of the world where such support is much needed.
Under the terms of the Act, the State Department’s Bureau of Democracy, Human Rights, and Labor (“DRL”) is given authority to determine who is placed on the sanctions list, which will be implemented by the Treasury Department’s Office of Foreign Asset Control (“OFAC”). In making these determinations, the Trump Administration is required to consider “credible information obtained by other countries and nongovernmental organizations that monitor violations of human rights” as well as information provided by the committees of Congress with direct jurisdiction over such matters. Ultimately, however, it is within the President’s discretion to impose sanctions, or not, even on individuals who may be widely condemned in the human rights community.
The Sanctions List
Section 1264(a) of the Global Magnitsky Act requires the President, after considering DRL’s sanctions recommendations, to submit annually an implementation report to Congress that includes a list of foreign persons who will be sanctioned due to their credible involvement in a systemic pattern of human rights violations or acts of corruption.
The list, announced via Executive Order issued December 20, includes a number of foreign national individuals and their affiliated entities that are now subject to U.S. economic sanctions pursuant to the Global Magnitsky Act. Under the Executive Order, OFAC imposed sanctions on 14 individuals for direct complicity in massive corruption and gross violations of human rights. The Executive Order also imposes sanctions on an additional 39 individuals and entities that are affiliated with the 14 foreign nationals.
Some of the foreign nationals placed on the sanctions list include:
Yahya Jammeh, the President of The Gambia from 1994 until he stepped down in January of 2017. Jammeh is believed to have created and employed a terror squad called the Junglers, who intimidated, interrogated, tortured, and killed individuals deemed a threat to Jammeh’s political agenda.
Dan Gertler, an international businessman and billionaire whom the State Department concluded has amassed his fortune through hundreds of millions of dollars’ worth of corrupt mining and oil deals in the Democratic Republic of the Congo. Gertler used his close relationship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the country. As a result, between 2010 and 2012 alone, the DRC reportedly lost over $1.36 billion in revenues from the underpricing of mining assets that were sold to offshore companies linked to Gertler.
Maung Maung Soe, former chief of the Burmese Army’s Western Command, who has been accused of overseeing military operations that directly targeted Rohingya civilians in Burma’s Rakhine State. Among some of the most egregious examples, witnesses in August 2017 described mass killings, arson attacks, and rapes committed by the Burmese Army and Burmese Border Guard Police, all then under Maung Maung Soe’s command in northern Rakhine State.
Gulnara Karimova, daughter of former Uzbekistan leader Islam Karimov. Karimova is believed to have headed an organized crime syndicate within Uzbekistan that leveraged state actors to expropriate businesses, monopolize markets, solicit bribes, and administer extortion rackets. According to the Trump Administration, “under Karimova’s corrupt activities in the telecom sector alone, Uzbeks paid some of the highest rates in the world for cellular service.”
Julio Antonio Juarez Ramirez, a Guatemalan Congressman, accused of ordering an attack in which two journalists were killed.
Artem Chayka, the son of the Prosecutor General of the Russian Federation. The Trump Administration posits that Chayka has manipulated his father’s position to unfairly award his subordinates state-owned assets and contracts and put pressure on business competitors.
Gao Yan, the Director of the Beijing Public Security Bureau Chaoyang Branch, accused of ordering the incarceration and torture of a prominent human rights activist who eventually died of her injuries.
The remaining seven individuals are: Roberto Jose Rivas Reyes, President of Nicaragua’s Supreme Electoral Council; Slobodan Tesic, one of the biggest arms dealers in the Balkans; Benjamin Bol Mel, President of ABMC Thai-South Sudan Construction Company Limited and a former Chairman of the South Sudan Chamber of Commerce, Industry, and Agriculture; Mukhtar Hamid Shah, a Pakistani transplant surgeon and alleged organ trafficker; Angel Rondon Rijo, a politically connected businessman and lobbyist in the Dominican Republic; Sergey Kusiuk, former commander of an elite Ukrainian police unit – the Berkut; and Yankuba Badjie, the Director General of The Gambia’s National Intelligence Agency.
Pursuant to the sanctions, the individuals and entities will be placed on OFAC’s Specially Designated National, or SDN list, and all of their property, and interests in property, that come within U.S. jurisdiction are blocked. U.S. persons are generally prohibited from engaging in any transactions with the sanctioned parties. In addition, any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons is itself considered to be a blocked person subject to the same sanctions.
Human rights advocates and the authors of the Global Magnitsky Act have been closely watching the measure’s implementation process in light of the change in the U.S. administration and the changing articulation of foreign policy priorities by President Trump and his Cabinet members.
Although the Act is still in the nascent phase of implementation, the Trump Administration’s first statutorily-required report (released in April 2017) noted that the Administration, in accordance with Section 1264(a)(6) of the Act, has been encouraging U.S. allies – such as the European Union, United Kingdom, Japan, South Korea, and Australia – to impose a similar sanctions regime on human rights offenders. Indeed, several countries in Europe have passed Global Magnitsky-like measures and the Government of Canada recently passed its own sanctions counterpart.
This week’s action list marks the second, substantive phase of implementation. The promulgation of this list and the imposition of sanctions will help allay the concerns of some human rights proponents that the Trump Administration would reject all of DRL’s sanctions recommendations, significantly delay implementation, or use procedural loopholes (such as national security or other emergency exceptions) to circumvent its implementation obligations.
Senators Ben Cardin (D-MD) and John McCain (R-AZ), who authored the Act, released a statement welcoming the issuance of the sanctions list. In particular, the Senators thanked career professionals at the State and Treasury Departments for their efforts in compiling the sanctions list. The lawmakers also singled out for praise the sanctioning of Artem Chayka and Maung Maung Soe. At the same time, Cardin and McCain said they would like to see “a more geographically diverse and rigorous list.”
The majority of foreign nationals on the sanctions list are former government officials, private citizens, or have a familial connection to a senior-level official. Some advocates have suggested that the sanctions could have the greatest impact if they focused on senior-level officials who are currently in government, and therefore most directly responsible for protecting citizens’ human rights and enforcing anti-corruption efforts within a country.
As we noted in our previous client alert, implementation is everything. In the coming years, there will be pressure from human rights proponents to ensure that the Trump Administration aggressively promotes the Global Magnitsky Act in the United States’ bilateral engagement with allies, and makes efforts to promulgate sanctions lists that are as fulsome, consistent, and comprehensive across regions as possible.