How human rights sanctions must evolve for the good of all | Thomson Reuters Regulatory Intelligence and Compliance Learning


Can the Magnitsky Law become an effective tool to punish the perpetrators of human rights abuses and bring about change among governments and the companies that do business with them?

The Global Magnitsky Act is the world’s first thematic sanctions regime focused on human rights. It has the potential to become an effective and consistent enforcement mechanism that can punish perpetrators of human rights violations and foster behavior change when its designations are applied and addressed by all market players.

But do human rights sanctions really work? Or are they just citation-type labels that name the wrongdoers but ultimately have little impact?

4 critical elements

Looking at the current state of Magnitsky Law, four critical elements correlate with its success and effectiveness.

First, information on human rights violations must be collected, verified and submitted to government authorities. Non-governmental organizations (NGOs), rights groups and the media play an important role in this process. Once these violations are addressed and sanctioned, the work of dissemination and discovery begins. Finally, international cooperation ensures that information is shared between jurisdictions.

Information gathering phase

Important work has been undertaken by the international community and by NGOs around the world to publicize human rights violations. Governments rely on the work of human rights organizations because they have sophisticated data analysis capabilities and digital platforms that collect, structure, organize and visualize verifiable information about the parties involved. With an enforcement mechanism in place, collecting information and then submitting that information to authorities has become a key element in unmasking perpetrators of human rights abuses.

Then go Human rights first, for example, has been influential and active in submitting verified information to the Global Magnitsky Act Sanctions program. About a third of the more than 340 names on the US Global Magnitsky Act were submitted by Human Rights First.

Dissemination & discovery

However, for a human rights sanctions program to have an impact, the information submission process needs to be broadened and the granularity of information needs to be improved.

Government authorities alone do not have the capabilities to build complete ownership structures, which are included in the US Global Magnitsky Law, if an entity is 50% or more owned by a sanctioned entity. But data providers and research think tanks have specialized resources and capacities to collect this information.

Due conduct diligence using unwanted AI-powered media

While businesses and financial institutions still rely on internet search engines like Google to perform due diligence, this often produces poor results. First of all, Google produces a lot of results that take a long time to sort; Additionally, search engines find many false positives, which often include multiple results for the same content. It can be difficult to determine the true adverse events and to verify the identity of a subject. The results could also ignore important risks not contained in traditional information sources.

Second, Google is a consumer-driven search engine, and investigators can miss vital content that might be buried in databases that traditional search engines can’t access.

Third, criminals can pay Google or other service providers to remove information from websites, such as news aggregation sites. Removing search engines is a tactic that includes creating positive content so that negative content is harder to find.

Adverse media solutions can play an important role in uncovering human rights violations, as they are powered by artificial intelligence and can include proprietary databases and other criminal records – such as criminal records. local law enforcement authorities – which would not be visible in a Google type. to look for.

International vscoordination

With the Magnitsky Law now enacted in all major Western democracies, it will be difficult for actors to move assets to other destinations as many will have similar legislation in place and more financial institutions act under a unified set of rules. However, to maximize the effect of a global human rights sanctions program, international coordination of sanctioned entities is important.

If an individual is banned under the United States Magnitsky Law for violating human rights, this should create a process of reciprocity in which independent due diligence is conducted on the same individual in other parts of the world. . While this type of information sharing does not guarantee sanction for that individual or company, at least the case would be heard.

Reciprocity should most certainly include all actors sanctioned for serious human rights violations, such as crimes against humanity, genocide, torture and other cruel, inhuman or degrading treatment.

If other offshore banking havens also implement Magnitsky Act-type sanctions, significant progress will be made. As a member of British law Magnitsky, for example, the British Overseas Territories have followed the UK’s lead and implemented similar legislation. Guernsey, Jersey, Gibraltar and the Cayman Islands will freeze all accounts in their jurisdiction if an entity is sanctioned in the UK

Efficient tool

Overall, the Global Magnitsky Act has shown it to be an effective tool in tackling human rights violations and corruption in general, and there are many examples of behavior change.

For example, Pastor Andrew Brunson was released after sanctions were imposed on Turkish government officials and then removed after the pastor’s release. And the sanctions against Israeli businessman Dan Gertler, who amassed a fortune through corrupt mining and oil deals, had an indirect effect on companies that were doing business with Gertler. For example, the Republic of Congo lost $ 1.36 billion in revenue from the sale of dumped mining assets; and the mining company Randgold cut ties with Gertler after being sanctioned.

Unlike previous sanctions that targeted countries like Iran or North Korea, it is now possible to individually prosecute perpetrators of human rights violations, even if they come from a country considered to be an ally. This puts pressure on the business partners of sanctioned entities, as in the Gertler case, as they also run the risk of being sanctioned.

If the visibility of the aggressors and their business partners is increased, and if Western democracies are aligned in their fight against those who violate human rights, then those who are exploited for financial gain will clearly benefit – as will the integrity of human rights. supply chains and the system as a whole. Who wants to do business with a human rights violator after all, if the abuse is known to the public?

The risk of doing business with a sanctioned person or company is measured not only by regulatory standards and enforcement mechanisms, such as the Global Magnitsky Act, but also by this information made public for all to see. and read them. Ultimately, that could be the biggest risk. Publicly traded companies could face a public outcry and reassessment of risk from investors and shareholders if such alliances are discovered, ultimately resulting in lost revenue. There is a significant reputational risk that results in financial risk when such breaches occur.

Indeed, creating transparency is quite possibly the main driver of behavior change in wrongdoing related to human rights.

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