Anton Imennov, Sergey Glandin: Under Magnitsky Act. How USA can defend Michael Calvey. The Forbes, 12 March 2019

Michael Calvey's opponents in the dispute over the bank "Vostochny" may get on the sanctions list under the Global Magnitsky Act.

The Michael Calvey and the fund Baring Vostok case got a new development. According to the Financial Times, heads of the largest American companies are not going to visit the Saint-Petersburg International Economic Forum in June. Actually, that is the first example of a serious reaction of the American establishment to the arrest of one of the best-known foreign investors to Russia. Calvey and the Baring Vostok team have been kept in pre-trial detention for almost a month on suspicion of stealing 2.5 billion roubles from the bank "Vostochny".  

Official US bodies have not yet responded to the Calvey's arrest (apart from routine statements that the defence of American citizens abroad is the priority of Washington D.C.), and to the FBI's interference in the conflict of the shareholders of the bakk "Vostochny". It is quite clear that the US authorities are not going to abandon their citizen in trouble, especially when there is doubt it the legitimacy of the charges against him. All means may seem appropriate in the cooperative war, and in the ordinary one as well. But, minority shareholder of "Vostochny" Sherzod  Yusupov who has lodged a claim against Calvey, and his long-term partner, one of senior executives of the Strategic Initiatives Agency Artiom Avetisyan have not taken into consideration the consequences that may occur quite unexpectedly.

Turkish example

There are similarities in the Calvey's case. After the failed cue de ta in summer 2016 Turkish leader Recep Erdogan accused preacher Fethullah Gülen, who is staying in the USA, of plotting, and demanded his extradition. The USA refused to do it. Then, Turkish authorities arrested American evangelical preacher Andrew Brunson on a false charge, intending to make Americans more negotiable, and to exchange him for Gülen.

Steven Mnuchin, the US Secretary of Treasury at that time, said that the unfair detention of pastor Brunson and prosecution of him by Turkish authorities was unacceptable. President Trump made it clear that the US was expecting his immediate release from Turkey.

America didn't become involved in the discussion, but put Turkey under economic pressure, and 1 August 2018 entered Turkish ministers of Justice and Internal Affairs in its sanctions list under the so-called "Global Magnitsky Act" passed in 2016. As a result, all property, assets or proprietary interests of Minister of Justice Abdulhamit Gül and Minister of the Interior Suleyman Soilu within the US jurisdiction were blocked; all persons having the US Law as a personal one were banned from dealing with them and keeping their property.

The reaction on the part of Turkish authorities and Erdogan in person was quite aggressive, but in the verbal form, not more. Ankara could not efficaciously counter Washington with anything. In the end of October 2018 Brunson safely returned to his homeland, and 2 November the US lifted sanctions against Turkish ministers.

Magnitsky's legacy

A couple of months before two Turkish ministers were entered in the sanctions list the sanctions tool set concerning foreign corrupt officials and human rights abusers had been finally formulated. It was called the Global Magnitsky Act and got a brief name of GLOMAG in the interior documents of the US Department of Treasury.

A corresponding law was passed in 2016. It has much in common with the 2012 law "On Accountability and the Rule of Law Named After Magnitsky" with the only exception that it can be applied worldwide. The 2012 Magnitsky Act was aimed only at Russian officials responsible, in American authorities' opinion, for the death of Russian lawyer in the "Matrosskaya Tishina", and for corruption unveiled by him. In December 2017 Trump, in line with this law, called corruption an extreme threat to the US national security and economy, and declared a state of emergency. In the end of June 2018 the Department of Treasury approved regulations on the administering the GLOMAG sanctions list and inclusion of foreign corrupt officials and human rights abusers in the US black list. The Office of Foreign Assets Control (OFAC) of the US Department of Treasury is in charge of the imposition of sanctions as execution of the GLOMAG Law.

Michael Calvey's opponents have a good chance of getting on the US sanctions list under the GLOMAG, and involving their acquaintances among authorities. The OFAC watches potential human rights abusers by means of the Internet. Appearance of an investigation into political or done to order prosecution of an American, and also information about a corruption collusion, influence trading, in the influential Anglo-American mass media, may lead to entering the persons involved in the sanctions list under the GLOMAG. If it happens, the further careers of the bank "Vostochny" co-owner  Artiom Avetisyan, and member of the board of directors Sherzod Yusopov in banking system will be troubled. Then their accounts in western banks will be immediately closed and their assets frozen, and they will be unlikely allowed to negotiate with their western colleges.

Anton Imennov, advocate, attorneys at law Pen & Paper Moskow office managing partner

Sergey Glandin, special adviser on sanctions law