U.S. Won’t Oppose Russia Sanctions That Risk Putin Reprisal

The U.S. administration will no longer seek to prevent Congress from passing a bill targeting human-rights offenders in Russia, a step that President Vladimir Putin has warned would spark retaliation and damage ties.

The House Foreign Affairs Committee today approved by voice vote legislation that would impose U.S. travel and financial curbs on any official abusing human rights in Russia, including 60 people suspected of involvement in the death of anti- corruption lawyer Sergei Magnitsky in a Moscow jail in 2009. Congress will vote on the measure at a later date.

“You’d be hard pressed to find anyone who would bet against Congress expressing their concerns on the Magnitsky matter in some way,” U.S. Trade Representative Ron Kirk said today in Moscow. “It’s important to work with Congress on an appropriate mandatory response to that.”

President Barack Obama’s administration is seeking to repeal trade restrictions with Russia to prevent U.S. companies from being penalized once Russian membership of the World Trade Organization takes effect later this year. A bipartisan group of senators has made a repeal of the 1974 Jackson-Vanik amendment conditional on imposing sanctions on Russian officials for human-rights violations.

‘Adequate’ Response

Any unilateral steps against Russian citizens would provoke an “adequate” response, Konstantin Dolgov, the Foreign Ministry’s human-rights representative, was cited as saying by Interfax today. Russia still sees a chance the bill won’t be adopted, according to the news service.

Such a law would be “a gross interference in Russian internal affairs and, of course, it won’t have any positive effect on U.S.-Russian ties, to put it mildly,” Dolgov told reporters in Moscow on May 15. Russia warned in April it would retaliate with unspecified measures against the law.

The U.S. is already at odds with Russia over its efforts to oust Russian ally Syrian President Bashar al-Assad and its plans to build a missile-defense shield in Europe on its former Cold War foe’s borders. Obama is counting on Russia to help push Iran toward a peaceful solution over its nuclear work and is seeking a deal with Putin over a managed transfer of power in Syria.

‘Urgent Need’

The U.S. administration sees an “urgent need” to repeal the Jackson-Vanik amendment, a Cold War-era trade-restriction law that was passed to punish the communist Soviet Union for refusing to allow Jewish emigration, Kirk said. Continued existence of the trade barriers means U.S. companies doing business in Russia won’t benefit from tariff reductions and other measures that will follow Russia’s WTO membership.

The Obama administration should establish normal trade relations with Russia to help companies compete in one of the world’s fastest-growing markets, Ronald Pollett, president of General Electric Co. (GE)’s Russian unit, said on March 15.

The U.S. government in July 2011 imposed a visa ban on several Russian officials involved in the Magnitsky case. The U.S. ambassador in Moscow, Michael McFaul, who’s pursuing Obama’s “reset” policy of improving ties with Russia, said in March that the visa ban made the Magnitsky bill “redundant,” according to a Foreign Policy report posted on the envoy’s Twitter Inc. account.

It’s no longer possible for Obama to resist pressure for action, said William Browder, head of London-based Hermitage Capital Management Ltd., who has lobbied governments in the U.S., Europe and Canada to sanction Russian officials over Magnitsky’s death.

Torturers, Killers

“Does the U.S. want Russian torturers and killers coming to America and using the U.S. banking system? The simple answer is no, of course not,” Browder said by e-mail. “There is not a democratically elected politician in the U.S. who will want to be on the wrong side of this issue. Even appointed officials understand they can’t publicly try to protect Russian criminals without bringing the Obama administration into disrepute.”

Magnitsky, a lawyer for Hermitage Capital, said he was abused and denied medical care in an effort to force him to drop fraud allegations against Interior Ministry officials before his death in November 2009 after almost a year in pretrial detention. He was facing fabricated tax-evasion charges when he was beaten to death, according to a Russian presidential human- rights commission.

“The concerns over the protection of human rights are deeply held within our country, and not just among a few human- rights organizations or a few members of Congress, but across the broad perspective of American stakeholders, including the administration,” Kirk said. “We would like to have that separate from the urgent need to lift Jackson-Vanik.”

U.S. Secretary of State Hillary Clinton has urged Congress to overturn the law, saying the statute hurts American farmers and producers. Annual waivers have been allowed since 1993, two years after the Communist government collapsed.

Russia, the largest economy outside the WTO, began negotiating to join the Geneva-based trade arbiter in 1993.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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