As New Zealand contemplates what action – if any – it should take on autonomous sanctions, a businessman who has tangled with Vladimir Putin says it makes no sense for the country to remain an outlier

The man who has convinced the United States and 30 other countries to crack down on human rights offenders and corrupt officials says it is “absurd” for New Zealand not to have a more rigorous sanctions regime.

American-British businessman Bill Browder addressed about a dozen Kiwi politicians via Zoom on Wednesday morning, seeking to convince them of the merits of so-called ‘Magnitsky laws’.

Browder is the chief executive and co-founder of Hermitage Capital Management, an investment firm which in 2007 was targeted by Russian authorities over alleged tax irregularities.

What do you think? Click here to comment.

Russian auditor Sergei Magnitsky was asked by Browder to look into the matter, and found documents seized by police had been used to “hijack” Hermitage companies and fraudulently claim back hundreds of millions in tax.

Magnitsky himself was then targeted by authorities, dying in prison in 2009 after being beaten and denied medical treatment.

Browder successfully lobbied US officials to pass sanctions legislation in Magnitsky’s name targeting the Russian officials involved in his death, and ‘Magnitsky laws’ have since broadened to provide targeted financial and other sanctions against those involved in human rights offences or corruption.

Speaking to Newsroom, Browder said Magnitsky regimes offered a targeted way to punish the perpetrators of human rights abuses or corruption, bypassing the victims of an authoritarian regime in the way that traditional sanctions often could not.

“It’s kind of like the modern-day cancer drug. It used to be [that] to kill the cancer, you’d have to almost kill the patient, whereas you can now just seek out the cancer cell and leave everything else alone – that’s what the Magnitsky Act does very successfully.”

“Not just Vladimir Putin, but other dictators value money more than human life, and this puts their money at risk.”

There was also evidence to suggest such sanctions regimes had a chilling effect on the actions of those lower down the pecking order.

Exiled Russian oligarch Mikhail Khodorkovsky had said treatment of prisoners improved after the American law came into effect because jailers were afraid of being put on a blacklist, while Browder had first-hand experience of its impact due to run-ins with Russian authorities.

“The judges in Russia that have to approve a warrant … let’s say that the judge was normally doing this, who’s already on the Magnitsky list, goes on vacation – the new judge who’s taking their place doesn’t want to make any decisions, because they don’t want to get Magnitskyed themselves.”

The fact Russia was still taking political prisoners like Alexei Navalny did not reflect on the effectiveness of such sanctions, Browder said: “You can’t say the law hasn’t worked because Putin is still a bastard.”

Instead, the best sign of its effectiveness was that Putin had made its repeal his single largest foreign policy priority, with some commentators arguing the Magnitsky Act was behind Russia’s interference in the US election on behalf of Donald Trump.

“Not just Vladimir Putin, but other dictators value money more than human life, and this puts their money at risk.”

A supplement, not replacement, for the UN

Responding to concerns that such a regime would undermine New Zealand’s commitment to multilateral organisations like the United Nations, Browder said the idea of a Magnitsky Act was not to replace the UN but to supplement its work.

While countries like the US, EU, Canada and UK had sanctioned officials in Xinjiang over human rights abuses there, New Zealand and Australia had only been able to offer their support for those actions, without taking their own.

“That’s absurd – how can New Zealand just congratulate their allies, instead of being involved? Do New Zealand not believe that they have a sort of duty and a responsibility to join the civilised world in these situations?”

He was also dismissive of the idea that the Government would find itself forced into implementing sanctions not in the country’s best interests, saying it did not have to be “bullied” into taking any action.

“Passing Magnitsky Acts in theory shouldn’t upset any nation, it’s just a piece of legislation. Who you put on the sanctions list will upset lots of nations.

“Those are two separate questions: to say, ‘I’m not going to have a tool that I can use because I’m worried about it upsetting nations’, that doesn’t make sense.”

It made no sense for New Zealand to be an outlier given the way it presented itself to the world on issues like human rights and anti-corruption efforts, Browder said.

The country had also played a significant role in the Magnitsky affair, with a shell company registered in New Zealand alleged to have been involved in funnelling some of the millions stolen from Russia.

Labour MP Louisa Wall says there is a growing coalition of democratic countries on the same page about how to tackle corrupt officials and human rights offenders. Photo: Lynn Grieveson.

Labour MP Louisa Wall, a co-chair of the Inter-Parliamentary Alliance on China, organised Browder’s briefing for MPs and told Newsroom he had come across as “authentic and hugely credible”.

Wall said she strongly believed New Zealand needed some form of Magnitsky-type legislation, whether that came through National MP Gerry Brownlee’s Autonomous Sanctions Bill or a separate piece of work.

“There’s a growing coalition of democratic countries who are all on the same page about how we deal with corrupt individuals, those who are perpetrating human rights offences, and in lieu of the UN being able to because of a range of issues.”

The Government could take a lead from Australia’s work in the area, as it made sense for the two countries to align on such a regime, although there were some missing components such as how to handle the proceeds of crime.

Newsroom understands the Labour caucus has yet to discuss whether it will support Brownlee’s bill, with the impending three-week parliamentary recess meaning such a conversation may not take place until next month.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

Leave a comment