The death of a Russian tax lawyer named Sergey Magnitsky in a Russian jail where he had been wrongly incarcerated for his alleged involvement in a $230 million corruption case sparked a flurry of activities that resulted in the enactment of the Magnitsky Act. Hailed as one of the most impactful legislations in the 21st Century, the passage of the Magnitsky Act allowed the United States government to sanction human rights violators across the globe, seize their assets, and bar them from entry into the US (Newman, 2019). Canada, the European Union, the United Kingdom, and Australia have passed similar legislation that mirrors the US Magnitsky Act to signify its importance internationally. However, despite its significance and global impact, corruption and widescale human rights violations continue because of challenges in detecting, investigating, and prosecuting corruption.
Immediately after its passage, the US government sanctioned several dozen Russian citizens for their involvement in the death of Magnitsky. The law has also been applied to punish human rights violators in other countries, such as Saudi Arabia after the murder of Jamal Khashoggi, China for violating Urghuir’s human rights, and Burma for the Rohingya Muslim genocide (Newman, 2019). Several other officials in other countries have also been sanctioned for violating Magnitsky Act’s provision. To proponents of this Act like Bill Browder, the actions taken so far and their impact on the personal and economic well-being of the affected individuals are a testament to the law’s effectiveness in dealing with corruption and human rights violations across the globe. However, while this is true to some extent, the truth is that the lack of international anti-corruption law, geopolitical considerations, inefficiencies and inherent weaknesses of the Magnitsky Act, opaque banking industries in some countries, and the lack of cooperation from investigative and judicial institutions in some countries hinder investigations and prosecution of corruption.
Before the enactment of the Magnitsky Act in 2012, only the fundamentally flawed United Nations Convention on Corruption existed as a tool to fight corruption globally. The United Nations Convention on Corruption established a mechanism for member states to strengthen their legal and regulatory regime to detect, investigate, and prosecute corruption (Newman, 2019). However, the Convention lacked an enforcement mechanism and did not offer a uniform way to fight international corruption. Member states could also fail to ratify the convention without consequence. Further, other regional anti-corruption agreements, conventions, rules, and regulations were also ineffective because they did not have an enforcement mechanism that could bring real consequences for violators. In this regard, the enactment of the Magnitsky Act was far-reaching and had international ramifications. For countries such as Russia, China, Iran, North Korea, and others, the Act was simply an overreach by the United States in its attempt to act as the global policeman. Despite the criticism of the law, the Act offered a solution to the lack of international law to deal with corruption and human rights violations.
The enforcement of the Magnitsky Act is hindered by geopolitical considerations by the US and its allies. The most recent example of this hindrance is its application after the killing of American journalist Jamal Khashoggi in Turkey by Saudi Arabia. Due to the media frenzy that resulted as a result of the murder, the US intelligence establishment released a declassified report that directly attributed the murder to Saudi Arabia’s de facto ruler Mohammed bin Salman (King, 2021). Naturally, one would have expected the Magnitsky Act to apply to him as it had applied to other human rights violators and corrupt officials. However, Saudi Arabia is an important oil supplier for Western countries and an important ally for the US in its confrontation with Iran. Consequently, despite his direct involvement, Mohammed bin Salman was not sanctioned by the US or any of its allies for fear that doing so would damage friendly relations that would lead to problems in the energy markets and the weakening of a united front against Iran. Thus, geopolitical interests take priority over human rights and corruption concerns when push comes to shove.
While the Magnitsky Act was an important step in the fight against corruption, its inefficiencies and inherent weaknesses diminished the power of law enforcement and the judiciary to detect, investigate, and prosecute corruption. The Magnitsky Act is essentially a human rights law that classifies corruption and its ensuing human suffering as a human rights violation (Newman, 2019). Its enactment was a unilateral move by the US to punish those who corrupted society in countries other than the US. However, any law requires the support of the judiciary and law enforcement agencies in the jurisdiction that it applies. The lack of a judicial and law enforcement structure around the Magnitsky Act makes its enforcement in the detection, investigation, and prosecution of corruption in other countries a disorganized and politically instigated endeavor. In addition, the jurisdiction of the law is limited to Canada, the UK, the EU, and Australia. However, even in these countries, enforcement of the law is a prerogative of the political class, which essentially makes the detection, investigation, and prosecution of corruption impossible.
The existence of secret banking industries, tax havens, and other institutions with the express purpose of offering clients almost total privacy makes the detection, investigation, and prosecution of corruption a challenge for law enforcement and the judiciary. Some of the world’s most corrupt individuals take advantage of opaque banking industries and tax havens to launder their ill-gotten wealth (Koch, 2022). That fact has consistently been confirmed by a string of leaks such as the Panama Papers, Bahamas leaks, Paradise leaks, and Pandora Papers which show how corrupt politicians and their business associates mitigate the threat of being detected, investigated, and prosecuted by moving money to offshore secret bank accounts. Despite its long reach and overextended international jurisdiction, the US is unable to keep up with corrupt individuals and their smart corruption and money laundering schemes.
The greatest impediment to the fight against international corruption is perhaps the non-cooperation with investigations by some countries. For nationalistic reasons, most countries would not want to be seen to be bending to the whims of the US. Thus, they deliberately and purposefully scale down their cooperation with the US on internal matters such as corruption. This scaling down of cooperation negatively impacts the ability of the better-resourced US law enforcement agencies and judiciary to detect, investigate, and prosecute corruption (Jones, 2022). In addition, some countries are openly hostile and view attempted efforts by the US to deal with corrupt officials and human rights violators in their countries as an infringement of their country’s sovereignty. Hence, they shield corrupt people and others who have committed unspeakable acts of aggregation against their people from responsibility.
Therefore, the challenges facing the detection, investigation, and prosecution of corruption include the lack of a universal law on corruption and geopolitical considerations in the fight against international corruption. Other factors include inherent weaknesses and inefficiencies of the Magnitsky Act and lack of or non-existent cooperation from some governments.
References
Jones, D. S. (2022). Challenges in combating corruption in Malaysia: Issues of leadership, culture and money politics. Public Administration and Policy, 25(2), 136–149.
King, C. I. (2021). Opinion | Sanction MBS and his cutthroats. The Washington Post. Web.
Koch, D.-J. (2022). Do transactions to tax havens and corruption attract officially supported export credit? evidence from three European Export Credit Agencies. SN Business & Economics, 2(6).
Newman, C. (2019). His fight against corruption had dire consequences in Russia. now he’s speaking at UVA. UVA Today. Web.