Sergei Magnitsky's death inspired the US to enact a law blacklisting individuals and seizing their assets. The EU is jumping on the bandwagon.

Last year, the European Parliament called for the adoption of a Magnitsky Act that would impose an EU-wide visa ban on, and freeze the financial assets of, Russian officials and businessmen implicated in the torture and murder of Sergei Magnitsky and other whistle-blowers and human rights activists. A Moscow lawyer who publicly exposed grand corruption involving Russian elites, Magnitsky was killed in detention in 2009. The European Union’s proposed legislation takes its lead from the United States’ 2012 Magnitsky Rule of Law Accountability Act. The act blocks blacklisted individuals from entering the country and accessing US financial markets, while allowing for the seizure of their assets and those of associated entities.

The European Parliament first issued such call in 2014, echoing demands from civil society organisations. The difference this time is that EU members Estonia, Lithuania, Latvia, and the United Kingdom have since enacted national Magnitsky acts, as has Canada. Indeed, in November 2017, the Lithuanian Parliament encouraged the EU to enact its own version of the legislation.

In the meantime, the US has moved on from the original 2012 law by adopting the Global Magnitsky Act, which allows it to blacklist human-rights abusers and corrupt officials worldwide. Due to its global reach, the list includes designees from countries as disparate as Nicaragua and Pakistan, featuring businessmen, politicians, arms dealers, military officers, and even a medical professional involved in organ-trafficking. If the EU is to agree on Magnitsky-type legislation, it should choose this version, more modern and flexible than the original act.

There have already been calls to blacklist the Trump Organisation in response to new tariffs

The EU can already do everything included in an EU Global Magnitsky Act. Indeed, the Union has a long history of imposing sanctions on individuals who violate human rights. And it has frozen the assets of those suspected of misappropriating state funds. Yet the adoption of a Magnitsky Act of a global kind would depart from traditional EU practice by creating a thematic rather than country–focused sanctions list. So far, almost all EU sanctions regimes have centred on states, with the result that the designation of any individual requires a dedicated country list. (The only exception to this rule is the EU’s international terrorism list, which builds on that of the United Nations.)

The adoption of a themed list would be in tune with the targeted character of EU measures. Given that these measures are designed to penalise not all citizens of a country but only specific individuals and entities, the EU’s current, country-based classification of sanctions regimes sends a confusing message. Creating a blacklist that targets human rights abuses and corruption would decouple designees from their country, obviating the need for a new sanctions regime for each perpetrator from an unlisted state. A thematic approach would also allow the EU to blacklist human-rights abusers in the absence of a major political event. At present, the Union imposes most of its sanctions in support of human rights in the broader context of international crises involving violent conflict or democratic backsliding.

In contrast to fragmented domestic legislation, an EU Global Magnitsky Act would reassert the image of an EU united in its protection of human rights and opposition to corruption. An effort to anchor the fight against corruption within EU foreign policy goals is meaningful because corruption and human rights abuses are often related phenomena – as Magnitsky’s case illustrates. Most importantly, such an act’s anti-corruption intent would strengthen the legal basis for blacklisting corrupt individuals. This could be useful given that the EU’s attempts to freeze allegedly misappropriated funds in Egypt, Tunisia, and Ukraine (often made at the request of post-revolutionary elites) have proved vulnerable to legal challenges.

However, one argument against the proposed legislation is that it would likely create further opportunities for litigation in European courts. Designees’ challenges to their inclusion on blacklists are the second most common issue to come before the European Court of Justice. The Council of the EU has markedly improved its record in this area: since 2015, it has won two cases on the issue for every one it has lost, mostly due to improved substantiation of designations. Before 2015, it was the other way round: the Council of the EU lost twice as many cases as it won, according to EU sources.

Although the risk of increased litigation will still dampen its appetite for placing individuals under sanctions, the EU can mitigate the risk of litigation by relying on visa bans rather than asset freezes. Since states can issue visas at their discretion, visa bans cannot be challenged before a court. Unlike their US counterpart, Baltic states’ blacklists prohibit attempts to issue visa bans without accompanying asset freezes. Yet foregoing asset freezes also means foregoing an instrument that can help shut designees out of the financial system – potentially, a very powerful tool.

There also remains a risk that countries whose prominent nationals have been targeted will retaliate with countersanctions. Moscow famously responded by enacting visa bans on officials from countries that passed Magnitksy legislation.

The proposed EU Global Magnitsky Act’s main advantage, its flexibility, also carries a risk: that of inconsistent listings. This risk demands the formulation of clear, defensible designation criteria. As Meredith Lilly – a former adviser to the Canadian prime minister – has lucidly argued, de-linking sanctions from international crises requires reflection on the circumstances in which one should intervene in a whole series of human rights causes around the world. Clear designation criteria would reduce the Council of the EU’s flexibility, but would also help ease member states’ anxiety that the act will become a Pandora’s box. Nonetheless, the Council of the EU should ensure that the act is flexible enough for determining who to target and when to do so. The challenge therefore consists in crafting listing criteria that provide the Council of the EU with sufficient political leeway while reducing the likelihood of arbitrary designations – particularly as many quarters, not least the European Parliament, will actively lobby in favour of listings.

The shift towards US-inspired themed blacklists creates new possibilities for the EU. There is no obstacle to the Union listing individuals and entities in friendly countries. Indeed, there have already been calls to blacklist the Trump Organisation in response to the US president’s recent imposition of new tariffs on steel and aluminium imports – a measure that would be far more precise than sweeping tariffs on US products. Last month, Canadian Member of Parliament Erin Weir suggested that the Justice for Victims of Corrupt Foreign Officials Act, Canada’s global law, could be invoked for this purpose. In this way, the United States’ current diplomatic push for its allies to adopt a Global Magnitsky Act could backfire: there is nothing to prevent US entities from becoming targets one day.

This commentary draws from Dr. Clara Portela’s “Targeted sanctions against individuals on grounds of grave human rights violations”, an April 2018 briefing paper for European Parliament’s Directorate- General for External Policies. Dr. Clara Portela is faculty member at University of Valencia, Spain.​

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