Magnitsky Laws and Corruption: The Wrong Tool for the Job?

Magnitsky Laws and Corruption: The Wrong Tool for the Job?

BCL partners John Binns and Michael Drury analyze the UK’s Magnitsky sanctions and corruption.

The two sets of targets

A recent open letter from 45 MPs and peers to the Foreign Secretary, Dominic Raab, has highlighted an issue in connection with the UK’s approach to so-called ‘Magnitsky’ laws. Sergey Magnitsky was the Russian lawyer who was tortured and died in jail after investigating allegations of public-sector corruption, and whose case has inspired laws in the US and elsewhere that target both the perpetrators of human rights abuses, specifically torture, on one hand, and people ‘identified as responsible’ for corruption offences, on the other.

 

The UK’s Magnitsky laws

Thanks to extensive lobbying, and with Mr Raab’s support, the UK has inserted clauses into its money laundering and sanctions laws that enable actions, including asset freezes and travel bans, against the first of those categories of people (as well as the relatively narrow category of those who benefit financially from torture). Unhelpfully, various commentary and public pronouncements, including from Mr Raab himself, have muddied the waters by linking such measures to popular perceptions of foreign, particularly Russian, wealth that may have a criminal origin.

 

Targeting corruption through the courts

The truth is that there are already laws designed to help freeze and seize assets that originate from crime, but they are administered by the courts, which don’t always do what the authorities and the politicians would like. The idea of using sanctions to target alleged corruption, while not new, is controversial and its omission from the UK’s ‘Magnitsky’ provisions was not an accident.

 

The options for Mr Raab

Nevertheless, by explicitly referencing the issue and calling for an extension of those provisions to cover corruption as well, the letter has raised the stakes. Mr Raab, who had promised to introduce sanctions regulations this month under this banner, will need to decide whether to stretch the scope of other sanctions provisions so as to shoehorn corruption targets into the same announcement, or explain why the new regulations are ‘only’ about human rights.

 

The need for parliament’s input

The former may be tempting, but the right course would be to do the latter. If there is a particular appetite to target Russian wealth with political rather than judicial measures, that is something that should be carefully considered with full parliamentary scrutiny, rather than introduced by stealth.

 

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John Binns is a partner at BCL, specialising in business crime and proceeds of crime. Most of his cases involve an international element, and he has advised clients on appeals to the CJEU in the context of international corruption allegations and targeted financial sanctions.

Michael Drury is a partner at BCL with a diverse practice, ranging from extradition to representing individuals in regulatory proceedings brought by the FCA; acting in criminal investigations by the SFO; and is a leading expert on surveillance and investigatory powers as well as information law and cybercrime.