What do 25 Russians, 20 Saudis, 2 Burmese Generals and some North Korean institutions have in common?  They are the first names on the newly-issued list under the UK’s ‘Global Human Rights Sanctions Regulations 2020’, the latest of several so-called “Magnitsky Acts” to have appeared around the world.

A Magnitsky-like Approach

Followers of IHRB’s Voices podcast series might remember my colleague Salil Tripathi’s interview with Bill Browder in 2016 – the businessman whose London-based firm Hermitage Capital Management was an early investor in post-communist Russia. Browder went on to lead campaigns for greater transparency in financial statements of Russian companies. Russian authorities claimed Hermitage owed back taxes and sued Browder. While representing Hermitage as legal counsel, Sergei Magnitsky was arrested and died in suspicious circumstances in a Russian jail. Browder wrote an acclaimed book about it.

In 2012, the United States government passed legislation targeting economic sanctions against Russian individuals seen as responsible for Magnitsky’s death. The law was expanded in 2016 to apply globally, and authorises the US government to sanction those who it sees as serious human rights offenders, freeze their assets, and ban them from entering the country.

Even if economic penalties might have some effect, is it appropriate to penalise a whole country for the acts of individual leaders?

Now the UK has passed Magnitsky-like legislation as well. This has long been of personal interest to Dominic Raab, the still relatively new UK Foreign Secretary, who previously served as an expert in international humanitarian law for the Foreign Office. As well as his long-standing commitment to the issue, his strong support for Brexit suggests he was probably keen to get the UK’s position in place before European Union Foreign Ministers agree their list of individuals over the months to come (a longer process given the different strategic interests involved).

Targeted or Broad-Based?

When it comes to human rights outcomes, economic sanctions have had a mixed record over the past 70 years.

Broad based sanctions seem to have played a significant role in hastening the end to apartheid South Africa, together with the sporting boycott. In other cases, sanctions have dragged on for decades and are now seen as overtly political (think of US sanctions against Cuba for example). Coordinated economic sanctions have incentivised countries to come to the negotiating table, such as Iran in relation to its nuclear industry, but can also be effectively side-stepped if countries have diverse trading relationships (e.g. Russia or North Korea).

The literature on sanctions and their effectiveness is extensive. The world has moved on from comprehensive sanctions of the kind imposed on Iraq and Cuba, and towards so-called ‘smart sanctions’ over which the UN and other bodies have deliberated since early this century. Smart sanctions have been applied on specific commodities (such as diamonds) and specific individuals (such as arms traffickers and those with credible allegations of grave human rights abuses during armed conflict).

The US, the EU, and other major countries have such regimes in place, and often take coordinated steps. Russia too now has its own list of foreign nationals accused of abusing the human rights of Russian nationals (under the Dima Yakovlev Law), as a reaction to finding some of its own nationals on the lists held by other nations.

The removal of economic privileges can also be a human-rights related sanction - raising similar questions as to who should suffer the consequences. The European Union has developed an incentive-based system to encourage trading partners to improve human rights conditions in return for the reduction or elimination of tariffs on exports to the EU (the so-called “Generalised Scheme of Preferences” or GSP). However, an evaluation of GSP arrangements in 2018 concluded that whilst the lifting of tariffs had certainly resulted in economic benefits for some of the world’s poorer countries, the human rights impact was more muted and “in several instances, economic growth and export opportunities did not go hand-in-hand with adherence to fundamental labour and human rights”. Whilst GSP preferences have yet to be removed for any country on human rights grounds, this is currently being evaluated in the context of Cambodia, Myanmar, and Bangladesh.

To what extent does targeting an individual’s economic interests represent a remedy for damages done to victims or to deter others from committing similar offences?

Even if economic penalties might have some effect, is it appropriate to penalise a whole country for the acts of individual leaders?

This is a live question as the EU debates how to develop the human rights conditionality of its own trade regime (note for example the recent remarks of the new EU Trade Commissioner, Phil Hogan, on responsible business conduct and mandatory due diligence). In the context of Myanmar, for example, is it appropriate to impose tariffs on a nascent textile industry for the actions of genocidal generals in Rakhine State? What about the half a million women who might otherwise have to migrate overseas to work (such as in Malaysia or Thailand) and who may have nothing to do with the impacts in Rakhine? IHRB raised these concerns with the former EU Trade Commissioner, Cecilia Malmstrom, in 2018 in the aftermath of the UN’s independent expert report on the human rights abuses perpetrated against the Rohingya minority.

This is perhaps one of the reasons why targeted sanctions that penalise those in positions in power more than the country as a whole are becoming increasingly interesting, particularly when those individuals are known also to rely on illicit means for maintaining their power.

In relation to US Global Magnitsky sanctions, one of the leading anti-corruption NGOs, Global Witness, puts it this way:

“Sanctions make it more difficult for corrupt individuals to launder their ill-gotten gains in the US, or continue to do business in US dollars, the most common global currency. It is a successful example of concrete action being taken against the corrupt and the worst human rights abusers, hitting them where it hurts the most – in their pocket. The inconvenience of being denied entry to the US is also a significant penalty, as is the considerable stigma that comes with being sanctioned. By targeting individuals rather than entire countries or sectors, the Magnitsky Act avoids broad-based sanctions that can affect vulnerable populations.”

Not a Silver Bullet

Global Witness also goes on to make a second important point: the targeted approach can be more politically convenient.

States can more easily use targeted economic sanctions against individuals in allied nations when broad-based sanctions would be politically impossible to imagine – take for example the inclusion of Israeli or Saudi nationals on the current US exclusion list.  As if to underline this point, the UK Government chose the same moment of announcing its own Magnitsky sanctions to lift the temporary embargo on arms exports to Saudi Arabia. This, despite reasons to fear that these steps will support the Saudi war effort in Yemen with the associated breaches of humanitarian law.

How will we assess if these measures are any more effective in securing better human rights outcomes?

It is clear that the Magnitsky approach is not a silver bullet and that other forms of export and import controls, such as those relating to arms or export credit, need also to be strengthened. The world is a complex place and so too are the economic conditionalities that are placed around trade and investment.

However, we should all watch the US, UK, Canadian and EU Magnitsky regimes closely as they develop, as well as those in other parts of the world (thanks largely to the effective advocacy of Bill Browder and his colleagues). As more and more names are added to the exclusion lists held by more and more states, we need to look carefully at the criteria involved and whether independent oversight will be put in place to ensure that names are added and removed for human rights reasons alone. If we are increasingly seeking to hold individuals accountable for the most serious human rights harms under international law, and not whole populations, we need also to monitor for signs that our new approach is working.

The questions now are broader, including:

• To what extent does targeting an individual’s economic interests represent a remedy for damages done to victims or to deter others from committing similar offences?
• Do Magnitsky-like approaches represent a new chapter in economic sanctions for human rights abuse – moving away from blaming whole countries for the crimes of their leaders towards targeting specific individuals?
• How will we assess if these measures are any more effective in securing better human rights outcomes?

Let’s hear other voices within the business and human rights community respond to these questions over the weeks ahead.