Canada's Original Think Tank

Re-engagement on whose terms?

Re-engagement on whose terms?

Re-engagement on whose terms?

Re-engagement on whose terms?

Published on 22 November 2016
Publications by Senator Percy Downe

Sergei Magnitsky believed in the rule of law. Unfortunately, in present-day Russia, that belief led to his imprisonment and death.

Currently the Canadian Senate is considering a Bill to ensure that those individuals responsible for corruption and human rights abuses in Russia are held personally accountable for their actions.

By now, all of us are familiar with the state of public institutions in Russia where democratic hopes raised by the collapse of communism have been overwhelmed by a quarter century of corruption masquerading as a free market and repression standing in for governance.

We have all have heard the list of Russian activists, journalists and parliamentarians who have faced prosecution, persecution and worse for standing up to the powerful interests in that country.

A tax lawyer, Magnitsky worked for Hermitage Capital Management, investigating the theft of corporate seals and related documents. This theft involved officials from the Russian Interior Ministry and led to the discovery of a $230 million tax fraud involving forgeries, shell companies and other complicated “legal” – to use the term loosely – proceedings.

As the investigation proceeded, Magnitsky came to the conclusion that far from being the source of the fraud, the company was, in fact, the victim of misconduct by corrupt officials and their associates. Unfortunately for Mr. Magnitsky, those officials were very well placed to turn the tables, and he was charged and imprisoned. During this time, his health deteriorated because he was subjected to abuse and denied vital medical care. He died in custody in 2008.

However, even though he died, the Russian government still tried and convicted him of tax fraud in July 2013 – about as strong a case of adding insult to injury as one can possibly imagine.

A more detailed description can be found in the book by Bill Browder, owner of Hermitage Capital Management and a friend and colleague of Magnitsky, called Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice.

Key to Mr. Browder’s fight for justice and remembrance of his friend is what has come to be known as the Magnitsky legislation: laws to ensure that those officials responsible for abuses of power like the one that befell Mr. Magnitsky would face sanctions to the effect that they, and their money, would no longer enjoy free access to the world economy.

The United States of America has passed legislation that would freeze the U.S. assets of any of these individuals, prohibit any transactions involving those assets to the United States and bar any travel to the United States by them personally.

Last year, a motion supporting such action passed in the House of Commons. At the time, then-Member of Parliament Irwin Cotler, a long-standing advocate of justice for many around the world, including Mr. Magnitsky, said:

“The unanimous support of this motion sends a clear signal to human rights violators in Russia and around the world that they will be held to account for their crimes. By imposing sanctions, we can impose meaningful penalties on human rights violators and deter future violations.”

And deterrence is the key. It is worth remembering that the whole Magnitsky story began with tax fraud. If there is one thing I have learned after spending years studying tax evasion, it is that until the perpetrators face real, personal consequences for their actions, their behaviour will continue.

Unfortunately, despite earlier support, actual legislation has hit a bump in the road with concerns being expressed by some in the government about the harm it might do to Canada’s re-engagement with Russia. But the question is: Re- engagement on whose terms?

It is time for Foreign Affairs Minister Dion to bring forward the required legislation, which the previous Parliament supported, so we can send the Russian government a message that re-engagement is on our terms, and not on theirs.