Trump Administration Establishes New Sanctions Regime Targeting Human Rights Abusers
Also Expands Existing Sanctions on Individuals Involved in the Sergei Magnitsky Case
The Trump Administration rounded out the year with two sanctions-related actions: The first involved creating a new program regarding human rights abusers and global corruption; the second involved adding several individuals to the Magnitsky sanctions program.
New Sanctions Program Aimed at Human Rights Abusers
President Donald Trump issued Executive Order 13818 (EO) on Dec. 20, 2017, blocking the property of persons that the U.S. has found to be involved in serious human rights abuses or corruption. The EO declares a national emergency with respect to serious human rights abuses and corruption globally, identifying these issues as threats to the national security, foreign policy and economy of the United States. The EO implements the provisions of the Global Magnitsky Human Rights Accountability Act (Global Magnitsky Act), which was signed into law on Dec. 23, 2016. Though implemented under the authority of the Global Magnitsky Act, the new sanctions program is not centered on Russia. Actors engaged in the aforementioned activities may be sanctioned and added to the Specially Designated Nationals and Blocked Persons List (SDN List). All of the assets within U.S. jurisdiction of "Specially Designated Nationals" or "SDNs" are blocked, and U.S. persons are generally prohibited from dealing with them. Currently, there are 52 sanctioned individuals and entities under the newly issued EO.1
A particularly noteworthy addition to the SDN List under the EO is Dan Gertler. According to the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), Gertler "is an international businessman and billionaire who has amassed his fortune through hundreds of millions of dollars' worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo (DRC). Gertler has used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state."2
According to Secretary of the Treasury Steven T. Mnuchin, "the United States is taking a strong stand against human rights abuse and corruption globally by shutting these bad actors out of the U.S. financial system. Treasury is freezing their assets and publicly denouncing the egregious acts they've committed, sending a message that there is a steep price to pay for their misdeeds. At the direction of President Trump, Treasury and our interagency partners will continue to take decisive and impactful actions to hold accountable those who abuse human rights, perpetrate corruption, and undermine American ideals."
OFAC Designates Additional Individuals Under Magnitsky Sanctions Program
The same day EO 13818 was announced, OFAC designated five individuals pursuant to the Sergei Magnitsky Rule of Law Accountability Act of 2012 (the Magnitsky Act). The Global Magnitsky Act is a separate legal authority from the Magnitsky Act, which provides authority for the identification and imposition of sanctions on certain persons related to the detention, abuse and death of Sergei Magnitsky, a Russian attorney-auditor who uncovered a large-scale tax fraud scheme while performing audit work for the Russia-based Hermitage Fund. For exposing this fraud, Magnitsky was subjected to organized physical and psychological pressures while detained, and on Nov. 16, 2009, he died in a pre-trial detention center in Moscow. The Magnitsky Act may also be applied to sanction persons for gross violations of internationally recognized human rights in Russia. The five individuals added to the SDN List are as follows: Alexei Sheshenya, Yulia Mayorova, Andrei Pavlov, Ramzan Kadyrov3 and Ayub Kataev.4 This brings the total number of individuals designated by OFAC pursuant to the Magnitsky Act to 49.5
Because the Magnitsky Act sanctions are directed at persons determined to meet the criteria set forth above, they do not generally prohibit trade or the provision of banking or other financial services to the Russian Federation.
1 These persons carry the program identifier [GLOMAG].
2 See "United States Sanctions Human Rights Abusers and Corrupt Actors Across the Globe," OFAC Press Release (Dec. 21, 2017).
3 Ramzan Kadyrov was designated for being responsible for extrajudicial killing, 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 – such as the freedoms of religion, expression, association and assembly, and the rights to a fair trial and democratic elections – in Russia. As the head of the Chechen Republic, Kadyrov oversees an administration involved in disappearances and extra-judicial killings. One of Kadyrov's political opponents was believed to have been murdered at Kadyrov's direction, after making allegations of torture and ill treatment taking place in Chechnya, including alleged torture carried out by Kadyrov personally. See "Treasury Targets Individuals Involved in the Sergei Magnitsky Case and Other Gross Violations of Human Rights in Russia," OFAC Press Release (Dec. 20, 2017).
4 Ayub Kataev was also designated for being responsible for extrajudicial killing, torture or other gross violations of internationally recognized human rights committed against individuals seeking to exercise internationally recognized human rights and freedoms – such as the freedoms of expression, association and assembly – in Russia. Kataev, a law enforcement official in the Russian Republic of Chechnya, is reported to have been involved in abuses against gay men in Chechnya during the first half of 2017. See "Treasury Targets Individuals Involved in the Sergei Magnitsky Case and Other Gross Violations of Human Rights in Russia," OFAC Press Release (Dec. 20, 2017).
5 These persons carry the program identifier [MAGNIT].
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.