19 July 2012, 16:41

Magnitsky List in place of Jackson-Vanik

Magnitsky List in place of Jackson-Vanik
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The US Senate Committee has approved a bill on the abolition of the Jackson-Vanik amendment and on the Magnitsky List. After voting in favor of removing the discriminatory amendment concerning trade with Russia, the lawmakers supplemented the bill with provisions from the so-called Magnitsky Bill.

The newly proposed provisions stipulate sanctions against Russian officials and against other countries’ nationals in case of human rights breaches. Meanwhile, media reports say that the bill may fail to sail through the House of Representatives’ Budgetary Committee. 

The bill consists of two parts. The first part devised by the corresponding finance committee establishes “a normal trader regime” with Russia thereby abolishing the Jackson-Vanik amendment of 1974 which introduced restrictions on trade with the Soviet Union because of the Soviet emigration laws. The second part of the bill is based on the so-called Magnitsky Bill, which stipulates sanctions against Russian officials allegedly implicated in the death of Hermitage Capital lawyer Sergei Magnitsky. This “human rights” part also provides for sanctions against officials from other countries. Chairman of the Senate Committee on Finance Max Baucus has said that the bill is not about a choice – whether to boost US exports or improve the situation in Russia – as these two things are closely connected. Analyst Maxim Bratersky comments.

"The Jackson-Vanik amendment had to be removed in order to support the US economy. However, an instrument to exert pressure on Russia has to be there. Once the amendment is abolished, it’s necessary to find a replacement."

The US National Council for Foreign Trade and lobbyists from major business associations have spoken against the decision to tie the human rights issue to trade. The bill is unlikely to be approved before August, when Congress breaks up for recess and Russia is due to join the WTO. The US Chamber of Commerce has warned that a delay may shut the American business out of the Russian market.

The House of Representatives’ Budgetary Committee may vote against the bill. Even though the Committee’s Chairman Dave Camp supports the bill, the final vote may fall through. Meanwhile, Russia has warned on several occasions that the Magnitsky Bill is counter-productive because it may harm bilateral relations and because the sanctions provided by it run counter to the international law. Russia’s Deputy Foreign Minister Sergei Ryabkov told a Voice of Russia correspondent that Russia would be forced to take retaliatory steps in case of sanctions.

"In accordance with international law, sanctions against physical and legal persons of other countries are possible with the approval of the UN Security Council, or in case of hostile actions from other countries. Nothing of the sort is happening in this case."

Hermitage Capital lawyer Sergei Magnitsky died in a detention center in 2009, pending a court ruling on charges of tax evasion. The Russian Prosecutor General’s Office has been investigating the circumstances surrounding Magnitsky’s death.

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