The Counterproductive Linkage of PNTR and the Magnitsky Act

July 18, 2012

By Oliver Backes

The inevitability of Russia’s accession to the World Trade Organization has brought the issues of U.S.-Russia trade relations and Russia’s human rights record to the forefront of the American political discourse in recent months. While the extension of Permanent Normal Trade Relations (PNTR) status to Russia is widely considered to have considerable economic benefits for the United States, the current debate hinges on the political and moral issues at stake. As it stands today, PNTR legislation remains inextricably linked to the Magnitsky Act, a bill which would sanction Russian officials for violations of human rights or corrupt practices. While the desire to emphasize Russia’s poor record on human rights, corruption, and the rule of law is understandable, the linkage of the Magnitsky Act to PNTR legislation will create significant backlash from the Russian political regime and substantially harm U.S.-Russia relations.

In anticipation of Russia’s accession to the World Trade Organization (WTO) a bill (S.3285) has been introduced in the U.S. Senate that would grant Permanent Normal Trade Relations (PNTR) status to the Russian Federation. The lynchpin of this move towards more stable trade relations with Russia is the repeal of the Jackson-Vanik amendment. This amendment, which allows for the denial of PNTR status to countries that restrict the emigration rights of their populations, has formed the basis of thirty-eight years of limited trade relations with the former Soviet Union and current Russian Federation. However, with emigration no longer an issue in Russia and many lawmakers and members of the business community anticipating significant economic gains following the repeal, the passage of PNTR legislation will almost certainly pave the way for more productive economic and political engagement between the White House and the Kremlin.

Well, not exactly. Alone, the granting of PNTR status will undoubtedly improve relations between the United States and Russia; however, PNTR legislation has been inexorably linked to the “Sergei Magnitsky Rule of Law Accountability Act of 2012,” versions of which have been introduced in both the House of Representatives and the Senate (S. 1039; H.R. 4405). This act gets its name from Mr. Magnitsky, a lawyer who died in prison following interrogation, torture, and the denial of proper medical care by Russian police as a result of his attempts to expose corruption. The act is seen by many in the U.S. and even in Russia as a fair and necessary replacement for the Jackson-Vanik amendment. Like Jackson-Vanik, the Magnitsky Act imposes sanctions based on allegations of corruption or gross violations of human rights. The bill mandates an investigation by the U.S. Department of State into such abuses within the Russian Federation, specifically targeting government officials or functionaries that participated in or concealed such acts. However, the act also empowers the U.S. Department of State to impose sanctions, in the form of visa restrictions and the seizure of assets, on Russian government officials. Furthermore, the authors of the bill have demanded that the “Magnitsky blacklist,” as it has come to be called, be published – though one version of the bill does allow for the creation of a more private list.

The rationale behind the linkage of these two pieces of legislation, for those that support it, is simple: Russia should not receive its carrots (PNTR) without an attendant smack with a stick (the Magnitsky Act). The intention is to show the Russian government that, despite liberalizing trade relations, the United States remains deadly serious about human rights and the rule of law and that the United States will not stand idly by while the inalienable rights of the Russian people are violated. By publicly imposing sanctions on Russian government officials, the supporters of the Magnitsky Act hope to significantly curb corruption and promote institutional change, all while tacitly providing rhetorical support to the opposition movement through the condemnation of government officials. In fact, in a recent article in Foreign Policy entitled “Abandoning Sergei Magnitksy,” Jamison Firestone, a former law partner of Mr. Magnitsky, presented this very rationale. He called the sanctions a “powerful disincentive for officials to persecute people who are fighting for a better Russia,” while simultaneously condemning Secretary of State Clinton’s apparent decision to place the “faith” of the United States not in the opposition but in their oppressors.

This argument – despite its moral sensibility – which is shared by Mr. Firestone and a host of Congressional leaders, remains inherently flawed, as it overestimates the potential gains of such a policy while ignoring the detrimental effect it will almost certainly have on the already fragile U.S.-Russia relationship. Considering the passage of the Magnitsky Act solely through the frame of human rights, and thus ignoring the larger issue of U.S-Russia bilateral cooperation, results in a misunderstanding of the stakes involved. A more in-depth analysis of the Russian political system demonstrates that, while PNTR will have a significant positive impact both economically and politically over the long-term, the Magnitsky Act will stand as a short-term policy failure, accomplishing none of its goals while antagonizing the Russian political elite. In fact, this analysis demonstrates that the Jackson-Vanik amendment does not need to be replaced at all, especially if the long-term goal of U.S. policy is liberal reform in the Russian Federation.

The impact of the Magnitksy Act on the Russian political system and on U.S.-Russia relations will be based entirely on how it is perceived by the very officials it is likely to target. The Magnitsky Act stands primarily as a public condemnation of the corruption and lack of respect for human and civil rights endemic to the Russian system. However, the simultaneously individualized and highly public nature of this condemnation, not to mention the attendant sanctions, ensure that it will be perceived as an undue violation of Russian sovereignty and an excessive intrusion into Russian internal affairs. This is due to the fact that the core value guiding the political thinking of the Russian leadership today is the belief that the sovereignty of the state in the realm of its internal affairs is, or should be, absolute. This belief has been part and parcel of Putin’s vehement anti-Western, anti-U.S. rhetoric in which he has often characterized the United States as “imperialist” and described its liberal mandate based on respect for human rights in the international system as a convenient façade.

In this context, where even purely vocal support for a reform agenda by the United States is seen as an unacceptable violation of sovereignty, the Magnitsky Act is sure to incense the Russian leadership. Not only will the government of the United States have publicly condemned the actions of the Russian government, it will have done so through the publication of an itemized list of violators. While Washington’s public criticisms of the Putin regime have been, to an extent, tolerated in recent years, the publication of the “Magnitsky blacklist” will – to a political system obsessed with sovereignty – be perceived as an unwarranted, excessive injection of an American political and moral agenda into the Russian political system. The list’s publication, which will take place approximately three to four months following the passage of the bill, will undoubtedly be accompanied by calls, both from the domestic opposition and Congressional leaders in the United States, for the ouster of listed officials and functionaries. In this sense, the Kremlin will perceive the Magnitsky Act as an attempt on the part of the U.S. Congress, the U.S. Department of State, and the Obama administration to dictate to Russia on matters of sovereign internal domestic policy.

In fact, the news of the Magnitsky Act’s introduction in both houses of Congress and of its linkage with the repeal of Jackson-Vanik has already provoked a series of responses from the Russian government that bear out that this perception will have a serious, detrimental impact on relations. In a May 3rd interview, Aleksandr Lukashevich, the official spokesman for the Russian Foreign Ministry, characterized the Magnitsky Act as an attempt, on the part of the United States, “ to interfere with our internal affairs,” later noting that such a violation of the “generally-accepted principle of the presumption of innocence […] would not be left unanswered.” Konstantin Dolgov, the Foreign Ministry’s human rights representative, echoed this sentiment, stating that such legislation constitutes “a gross interference in Russian internal affairs and, of course, it won’t have any positive effect on U.S.-Russian ties, to put it mildly.” In fact, there have been figures within the Russian government outlining an “asymmetrical response” to the Magnitsky legislation. Deputy Foreign Minister Sergei Ryabkov explained that, “an asymmetrical response is also possible. A symmetrical response will follow, but another set of some other measures will be taken as well.”

It should be noted that some analysts have suggested that Russia’s bark may be worse than its eventual bite, stating that the most pragmatic approach for the Russian government would be to execute a minimal symmetrical response. However, recent developments in the Russian Duma suggest that the asymmetrical response has already begun and that it will be severe. During the second week in July of this year, the Duma passed a bill imposing stringent, injurious restrictions on the operations of NGO’s in Russian financed from non-Russian sources and branding them as “foreign agents.” Directed primarily at organizations that promote human rights, the fight against corruption, and political reform, the NGO bill stands as an attempt to harass, silence, and disenfranchise independent critics of the regime in the name internal political sovereignty and freedom from outside (read: U.S.) influence. As such, it is very likely that this legislation represents a preemptive consolidation of political and rhetorical authority by the government, the first asymmetrical response to the likely passage of the Magnitsky Act.

The curtailment of rights contained within this asymmetrical response, coupled with the startling abuses outlined in the Magnitsky case, have caused many, Mr. Firestone included, to assert that the passage of the Magnitsky Act is purely “a question of human rights.” However, this view ignores the fact that the passage of the Magnitsky Act will have lasting implications for U.S.-Russia relations beyond the realm of human rights, including possibly on issues as diverse as the conflict in Syria, the Iranian nuclear negotiations, missile defense in Europe, and many other crises and issues of international policy that will undoubtedly arise during the course of Putin’s third term as President. A stable, cooperative relationship between the United States and Russia, two permanent members of the United Nations Security Council, will be critical to the maintenance of order and relative peace within the international system, while the Magnitsky Act will only serve to reinforce Russian skepticism of the United States and its Western allies.

Given the significance of stable, harmonious relations between the United States and Russia to the maintenance of international peace and security, it is astonishing that the advocates for the Magnitsky Act are so unconcerned with the potential impact of this legislation on the U.S.-Russia relationship. Such legislation, which will undoubtedly strain this already fragile relationship, will also provide fodder for Putin’s persistent suspicion of the United States at a time when the Obama administration should be assuaging his concerns, not confirming them. A significantly more hostile bilateral relationship could potentially contribute to the prolongation of the Syrian conflict and would almost certainly paralyze the United Nations Security Council. Despite all of their failings, the Russian leadership must be a partner for the United States, not an adversary. And while it is true that friendly states should point out one another’s mistakes, the Magnitsky Act goes far beyond such a formal condemnation, antagonizing a potential partner through a perceived violation of sovereignty. Even if the Magnitsky Act were to lead to immediate and significant reform within the Russian political system and human rights, which is unlikely given the high probably of a strong authoritarian asymmetrical response to its passage, such gains could be offset by the damage done to U.S.-Russian bilateral cooperation.