Title

Shady Shipping

Friday, May 24, 2019
9:30am
Rayburn House Office Building, Room 2360
Washington, DC
United States
Understanding Trade-Based Money Laundering
Moderator(s): 
Name: 
Paul Massaro
Title Text: 
Policy Advisor
Body: 
Commission on Security and Cooperation in Europe
Witnesses: 
Name: 
John Cassara
Title: 
Special Agent (retired)
Body: 
U.S. Department of the Treasury
Name: 
Lakshmi Kumar
Title: 
Policy Director
Body: 
Global Financial Integrity
Name: 
David Luna
Title: 
President and CEO
Body: 
Luna Global Networks

Trade-based money laundering (TBML) is the process of disguising the proceeds of crime and moving value through trade transactions in an attempt to legitimize their illicit origins. This highly sophisticated form of money laundering has become a favorite method for transnational criminals, dictators, and terrorists to move ill-gotten gains to new jurisdictions.

This event examined what TBML is, how it works, and why it has become such a ubiquitous method of laundering money. Panelists also discussed the broader interplay of illicit commerce, global corruption, and TBML. Finally, panelists recommended practical steps the United States and non-governmental organizations can take to counter TBML.

David Luna, President and CEO of Luna Global Networks, shared his insights on the dark side of globalization and how it fits into the TBML paradigm. Luna outlined the need to increase understanding of the networks between illicit commerce and money laundering across legal and illegal means through convergence crimes. He spoke to the methodologies of “cleaning dirty money” utilized by kleptocrats, criminal organizations, and terrorist groups, while expressing the importance of tracing money and the value of goods to expose illicit crimes. Luna cited a 2015 World Economic Forum report to support his points, which estimated the value of transnational criminal activities between 8-15 percent of Gross Domestic Product, even by conservative standards, totaling around 80 trillion in the US market.

John Cassara, retired Special Agent of the U.S. Department of the Treasury, spoke about the confusion surrounding TBML, both in understanding and enforcement. He explained that TBML is the largest method of money laundering because of excess ways to commit it: customs fraud, tax evasion, export incentive fraud, evading capitol controls, barter trade, and underground financial systems. Cassara explained how money is transferred under the noses of customs enforcement by undervaluing or overvaluing an invoice of an otherwise legal trade. Cassara asked, “If our highly trained police force can’t catch this, what about the rest of the world?”

Lakshmi Kumar, Policy Director at Global Financial Integrity, described the difficulty with tracking TBML, both domestically and internationally. She outlined how domestic policy and law complicates internal tracking, while the lack of consistent transnational collaboration and information sharing complicates international tracking. Kumar spoke to the components of the trade chain and how hard it is to watch all the mechanisms with due diligence. Explaining the role of banks, Kumar noted that 80 percent of all international trade occurs through open account trading, in which banks aren’t involved or able to offer oversight. This allows for trade profits to be separated into various accounts, tricking the customs and enforcement agencies to enforce a lower level of taxation on the profits and the freights and allowing for TBML.

In summary, even with world class law enforcement, the U.S. legal and financial frameworks needs to catch up in order to adequately combat TBML.

  • Related content
  • Related content
Filter Topics Open Close
  • Bipartisan Congressional Delegation Represents US at OSCE Parliamentary Assembly; Also Visits Ukraine, Czech Republic

    Forty years after the signing of the Helsinki Final Act established the precursor to today’s Organization for Security and Cooperation in Europe (OSCE), five members of the Helsinki Commission and four other members of Congress traveled to the OSCE Parliamentary Assembly Annual Session in Helsinki to demonstrate the U.S. commitment to confronting Russian aggression in Ukraine and elsewhere. Led by Commission Co-Chairman Senator Roger F. Wicker (MS), the bicameral, bipartisan delegation organized by the Helsinki Commission included Commission Chairman Representative Chris Smith (NJ- 04); House Commissioners Robert B. Aderholt (AL-04), Steve Cohen (TN-09) and Alan Grayson (FL-09); and Representatives Gwen Moore (WI-04), Michael Fitzpatrick (PA-08), Richard Hudson (NC-08) and Ruben Gallego (AZ-07). Before attending the Annual Session from July 5 to 7, several members of the delegation also visited Ukraine and the Czech Republic. A central concern to the delegation throughout the trip was Russia’s restrictions on democracy at home and aggression in Ukraine, along with Russia’s threat to European security.

  • Serbian Minister of Foreign Affairs to Testify at Helsinki Commission Hearing

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following hearing: “Serbia’s Leadership of the OSCE” Wednesday, February 25, 2015 2:30PM Rayburn House Office Building Room 2200 Serbia’s 2015 Chairmanship-in-Office of the 57-nation Organization for Security and Cooperation in Europe (OSCE) comes at a pivotal point in European security. The OSCE, a regional security organization based known for its work in promoting democracy, human rights, and the rule of law, operates on the front lines of Russia-Ukraine conflict and seeks to counter backsliding on human rights in other countries of the OSCE region.   Serbia’s First Deputy Prime Minister and Minister of Foreign Affairs, H.E. Ivica Dačić, will testify before the Helsinki Commission in his capacity as Chairman-in-Office of the OSCE. He takes the helm to conclude the implementation of a joint leadership plan developed with Switzerland, which chaired the OSCE in 2014. Minister Dačić is expected to discuss the Serbian Chairmanship-in-Office’s priorities, including resolution of the conflict in and around Ukraine; reconciliation and cooperation in the Western Balkans; reforming security sector governance; combating transnational threats, including foreign terrorist fighters, terrorism, and cyber-security; safeguarding journalists; fostering freedom of expression, assembly, and association; combating organized crime and its linkages to human trafficking; combating corruption; and improving water governance. He will also provide insights regarding the ongoing work of the OSCE.

  • Rep. Chris Smith, Sen. Roger Wicker to Lead Helsinki Commission

    WASHINGTON—Rep. Chris Smith (NJ-04) has been appointed by Speaker of the House John Boehner as chairman of the Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, during the 114th Congress. Senator Roger Wicker (MS) has been appointed by Senate Majority Leader Mitch McConnell to co-chair the Commission. “Today, the principles enshrined in the Helsinki Final Act are under attack. The Russian government is blatantly violating the territorial integrity of Ukraine,” said Chairman Smith. “More than 20 million people are trafficked each year for sexual or other forms of exploitation. Journalists in the OSCE region are being imprisoned, tortured, and even murdered for exposing corruption or publishing controversial pieces. In Europe, violent anti-Semitism is again rearing its ugly head, and in some OSCE countries religious people face restrictions and even persecution merely for practicing their faith.” “The United States must advocate much more vigorously for those who are victims and are voiceless. As the chair of the bipartisan, bicameral Helsinki Commission, I look forward to working with my fellow Commissioners to promote human rights and fundamental freedoms and to safeguard the principles shared by the 57 participating States of the OSCE,” said Chairman Smith, who has been an active member of the Helsinki Commission since 1983. “I am pleased to join Chairman Smith and the other members of the Helsinki Commission in defending democratic values and the rule of law,” said Co-Chairman Wicker. “Peace and security are under threat in the wake of escalating Russian aggression – impacting our economic and strategic interests in the region. This situation calls for a unified response from the United States and our OSCE partner countries. We should work together to ensure a safe, free, and prosperous Europe for this generation and those that follow.” Chairman Smith has previously chaired the Commission and serves as a member of the OSCE Parliamentary Assembly (PA), which facilitates inter-parliamentary dialogue among the 57 participating States; he is also the OSCE PA’s Special Representative on Human Trafficking Issues. Senator Wicker also serves as a member of the OSCE PA, where he chairs the Committee on Political Affairs and Security.

  • Chairman Smith and Rep. McGovern Introduce “Global Magnitsky Human Rights Accountability Act”

    WASHINGTON—Rep. Chris Smith (NJ-04), Chairman of the Commission on Security and Cooperation in Europe, also known as the U.S. Helsinki Commission, and Rep. Jim McGovern (MA-02), today introduced the “Global Magnitsky Human Rights Accountability Act” (H.R. 624). The bill prohibits foreign human rights offenders and corrupt officials operating anywhere in the world from entering into the United States and blocks their U.S. assets. It effectively globalizes and strengthens the “Sergei Magnitsky Rule of Law Accountability Act of 2012,” which was directed at individuals and entities from Russia. “The ‘Global Magnitsky Human Rights Accountability Act’ is a game-changer, and demonstrates America’s commitment to protecting human rights worldwide,” said Chairman Smith. “We are sending a message to the world’s worst human rights violators:  we will shine a spotlight on your crimes. We will deny your visas. We will freeze your assets. No matter who you are or how much money you have, you won’t be enjoying the fruits of your misdeeds by visiting the United States or taking advantage of our financial institutions.” “We have made important progress in the last few years,” Rep. McGovern said.  “But since the introduction of the original Magnitsky Act, human rights defenders and anti-corruption activists worldwide have urged us to pass a law that covers similar violations in countries other than Russia.  Through the Global Magnitsky Act, we can better standardize our approach to human rights violators and provide clear guidance to the executive branch on how we expect these perpetrators to be held accountable.” “Conscripting child soldiers, kidnapping political opponents, and brutalizing people based on their religion are horrifying acts for which people must be held accountable – and this bill will do it,” said Chairman Smith. “The earlier Magnitsky Act enjoyed overwhelmingly bipartisan support in both the House and the Senate. I expect the Global Magnitsky Act to move forward with the same level of commitment in both chambers, and on both sides of the aisle.” Earlier this week, Senators Ben Cardin (MD) and John McCain (AZ) introduced similar legislation in the Senate, which also applies worldwide and employs visa bans and property freezes. Unique aspects of the House bill include the requirement that the President impose sanctions if he or she determines that a foreign person has committed gross human rights offenses. The bill also permits the President to sanction perpetrators regardless of whether the victims were exercising or defending basic human rights; requires that the annual Global Magnitsky List be released each year on Human Rights Day; and directs the Comptroller General to assess and report on implementation. Both the “Global Magnitsky Human Rights Accountability Act” and the earlier “Sergei Magnitsky Rule of Law Accountability Act of 2012” were inspired by Russian lawyer Sergei Magnitsky, who was arrested and imprisoned by the Russian government following his investigation into fraud involving Russian officials. He was beaten to death by prison guards in 2009 after being held in torturous conditions for 11 months without trial. Summary: The “Global Magnitsky Human Rights Accountability Act” This act requires the President to publish and update a list of foreign persons or entities that the President determines are responsible, and who the President has sanctioned, for gross violations of internationally recognized human rights – including extrajudicial killings, torture, enforced disappearances, and prolonged, arbitrary detention – or significant corruption. Known as the Global Magnitsky List, the list will be due annually on December 10 (Human Rights Day). Although the bill directs the President to prioritize cases where the victims were seeking to exercise or defend internationally recognized human and rights and freedoms, like freedom of religious, assembly, and expression, or expose illegal government activity, the President can act regardless of the victim. Sanctions on these individuals and entities will include: Prohibiting or revoking U.S. visas or other entry documentation for foreign individuals. Freezing and prohibiting U.S. property transactions of a foreign individual or entity if such property and property interests are in the United States; come within the United States; or are in, or come within, the control of a U.S. person or entity. This act also requires the Comptroller General of the United States to assess the implementation of the law and report to Congress, so that Congress can ensure it is being executed fully.

  • U.S. Helsinki Commission Chair Slams Verdicts in Navalny Trial

    WASHINGTON—Following Tuesday’s guilty verdicts and subsequent sentencing of Alexei and Oleg Navalny in Moscow, U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: “I am deeply troubled by the guilty verdicts handed down in the latest manipulation of Russia’s so-called justice system against brothers Alexei and Oleg Navalny. The decision further demonstrates how the Russian government has warped what should be an independent voice and check on executive power into a tool to retaliate against its political opponents, continuing its ongoing crackdown on civil society in general.   “By punishing those who dare to voice their dissent, the Russian government undermines only itself. The Russian people deserve better than leaders who attempt to strangle their freedoms under the guise of deterring criminal activity.  As I noted in my statement Tuesday regarding the addition of names to the U.S. government’s visa ban and asset freeze lists, accountability and transparency are sadly lacking in President Putin’s Russia. “I remind Russia, as an OSCE participating State, that the Helsinki Final Act establishes principles and commitments including respect for human rights and fundamental freedoms within states which it has pledged to uphold. I urge the government of Russia to uphold its obligations and commitments to respect the freedoms of expression, assembly and of the media.  The Russian people must be allowed the right to voice their opinions openly, without fear of retaliation by their own government.” Alexei and Oleg Navalny were accused by the Russian authorities of fraud, charges which are viewed as politically motivated; Alexei Navalny is Russia’s leading anti-corruption crusader and a key member of the political opposition. In 2010, Alexei Navalny appeared at a Helsinki Commission briefing on fraud schemes in the Russian market.

  • U.S. Helsinki Commission Chair Welcomes Additions to Magnitsky List

    WASHINGTON—Following Monday’s addition of four Russian individuals to the Magnitsky List by the Obama Administration, U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: “I welcome the announcement made by the Obama Administration that it has added four additional individuals to the visa ban and asset freeze lists mandated under the Sergei Magnitsky Rule of Law Accountability Act.  I applaud the work of the U.S. Departments of State and Treasury to continue to focus attention on Russian government officials implicated in the death of Sergei Magnitsky and to demonstrate America's willingness to penalize human right violators when their own country refuses to act. "These sanctions are not sanctions against Russia, but against individuals who have committed serious human rights violations against Russians. The American people will continue to support Russians like Sergei Magnitsky who speak out about injustice and seek redress. “While I am pleased that additional names have been added to the Magnitsky List, there remain a significant number of Russians – both government officials and private individuals – against whom evidence exists of their involvement in the conspiracy and cover-up of Magnitsky’s death in 2009, but who have yet to be added to the visa ban and asset freeze lists.  I strongly encourage the Administration to continue its examination of the information available with regard to these individuals and add them to the List. The Sergei Magnitsky Rule of Law Accountability Act must continue to be used to demonstrate to the world that the voices of those who seek justice and who speak out about human rights violations are heard and valued by the United States of America.”

  • Helsinki Commission Condemns Raid on Radio Free Europe/Radio Liberty Bureau in Baku

    WASHINGTON—Following yesterday’s raid by authorities in Azerbaijan on Radio Free Europe/Radio Liberty’s (RFE/RL) Baku bureau, U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: “The free and independent press in Azerbaijan remains under attack by the very authorities who should be most committed to its protection. Yesterday’s raid on RFE/RL’s Baku bureau continues the recent and deeply disturbing trend of the government of Azerbaijan to silence dissenting voices within the country, and comes hard on the heels of the recent arrest and pre-trial detention of Khadija Ismayilova, an investigative journalist and contributor to RFE/RL’s Azerbaijani Service. “Once again, we call on the Azerbaijani authorities to immediately end their harassment of journalists and to respect the commitments they have made in the past, as a participating State in the Organization for Security and Cooperation in Europe, to the protection of human rights and fundamental freedoms.”

  • U.S. Helsinki Commission Chair Notes Challenges, Need for Action on International Human Rights Day

    WASHINGTON—To mark International Human Rights Day, U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: "It has been a difficult year for those of us who are active in human rights in the OSCE region. Russia’s invasion of Ukraine has flagrantly violated the principles enshrined in the Helsinki Final Act, exacerbated regional security, and further revealed the weaknesses of Russia’s own democracy .  The space for civil society – the guardians of the rule of law and fundamental freedoms – is shrinking in more than a few of our participating States, including Russia, Azerbaijan, and Hungary, breeding abuse of power and corruption. We have been appalled by violent anti-Semitic attacks and a rising tide of intolerance across the OSCE region against minorities and other vulnerable populations.  Uzbekistan holds the world’s longest-imprisoned journalist, who languishes alongside of thousands of political prisoners. "Clearly, the challenges for the countries of the OSCE are as great as ever.  We look forward to supporting Serbia’s 2015 chairmanship of the OSCE, which offers an opportunity both for the country and for the organization. As the effective successor to the only country to be suspended from the Helsinki process, Serbia is a concrete example of how a country can turn things around and how the OSCE can contribute. "In particular, we urge Serbia to build on decisions adopted at last week's Basel Ministerial Council on combating anti-Semitism and corruption.  These are challenges faced by virtually every OSCE participating State. We hope that Serbia will move forward with conviction to support these initiatives and to defend and advocate for the Helsinki principles throughout the region." December 10, International Human Rights Day, celebrates the adoption of the Universal Declaration on Human Rights by the UN General Assembly on December 10, 1948.

  • U.S. Helsinki Commission Chairman Deeply Concerned by Arrest and Detention of Journalist Khadija Ismayilova

    WASHINGTON—Following Friday’s arrest and pre-trial detention of Khadija Ismayilova, investigative journalist and contributor to RFE/RL’s Azerbaijani Service, by authorities in Azerbaijan, U.S. Helsinki Commission Chairman Senator Ben Cardin (MD) issued the following statement: “I am deeply concerned about the detention of Ms. Ismayilova, who has been the target of unrelenting persecution by the government of Azerbaijan because of her efforts to expose corruption within the country, as well as her advocacy on behalf of political prisoners. The current charges against her are bizarre and only seem designed to silence one of the few independent voices left in Azerbaijan. “Ms. Ismayilova was scheduled to testify in front of the U.S. Helsinki Commission on November 19, 2014, but was prevented from attending due to a government-imposed travel ban related to a different legal case. The current charge levied against Ms. Ismayilova of ‘incitement to suicide’ is just an escalation of the years of harassment by the authorities that she has endured. “As a participating State of the Organization for Security and Cooperation in Europe (OSCE), Azerbaijan has committed to respecting human rights – including freedom of the media – and the U.S. Helsinki Commission once again calls on the government of Azerbaijan to live up to its promises and immediately end its harassment of all journalists, including Ms. Ismayilova.”

  • The Tyranny You Haven't Heard Of

    You could call it a stealth North Korea: a country in the same league of repression and isolation as the Hermit Kingdom, but with far less attention paid to its crimes. The country is Uzbekistan, one of the Central Asian nations that emerged out of the wreckage of the Soviet Union in 1991. It has brought some unique touches to the conduct of a dictatorship. When political prisoners have served their full terms, they often have their sentences extended for violations such as improperly peeling carrots in the prison kitchen or failing to sweep their cells correctly. At harvest time, millions of students, teachers and other workers are temporarily enslaved to pick cotton to the profit of the regime. It has been known to boil its prisoners alive. But in most ways, it is a classic, hard-core police state, among the worst in the world. Like Zimbabwe, it has a president who will not go away: Islam Karimov, who assumed power as Communist Party boss in 1989. After a quarter-century, Karimov, 76, appears as ensconced as ever, though Uzbekistan’s GDP per capita of $3,800 puts it 171st in the world. Like China, it had its Tiananmen Square massacre: the shooting of hundreds of unarmed protesters in the city of Andijan in 2005, after which the government ramped up its repression nationwide. And like North Korea, it confines in brutal conditions thousands of political prisoners. How many thousands? Probably not the 80,000 to 120,000 who populate North Korea’s gulag. Human rights groups have offered estimates of 10,000 or 12,000. But, as Human Rights Watch noted in a recent report, no one really knows, because, like North Korea, “Uzbekistan has become virtually closed to independent scrutiny.” Foreign correspondents and human rights monitors generally are not granted visas. No U.N. human rights expert has been allowed in since 2002. Even the International Committee of the Red Cross, which is permitted almost everywhere because it never publicly embarrasses a country, had to pull out of Uzbekistan last year because of interference in its attempted prison visits. Drawing the curtains has helped Uzbekistan avoid scrutiny. But the nation has stayed below the radar for another reason, too: The United States and other Western nations have been reluctant to confront Karimov and his regime. They have needed to ship military supplies through Uzbekistan to reach Afghanistan. And as Russian President Vladi­mir Putin has become increasingly hostile, the West has competed with him for the favor of neighboring nations. Thus the tenor of this White House summary of a telephone call between President Obama and Karimov in 2011, unimaginable if Kim Jong Un had been on the other end of the line: “President Obama congratulated President Karimov on Uzbekistan’s 20 years of independence, and the two leaders pledged to continue working to build broad cooperation between our two countries. The President and President Karimov discussed their shared desire to develop a multi-dimensional relationship between the United States and Uzbekistan, including by strengthening the contacts between American and Uzbek civil societies and private sector.” Never mind that Karimov has virtually eradicated Uzbekistan’s “civil sector.” It’s hard to read of such a phone call without thinking of, say, Muhammad Bekjanov, 60, possibly the world’s longest-imprisoned journalist. Uzbek security agents kidnapped Bekjanov in 1999 in Ukraine, where he was living in exile. He has been beaten, shocked, subjected to temporary suffocation (the “bag of death”) and tortured in other ways. He has contracted tuberculosis, and beatings have cost him most of his teeth and much of his hearing. When his term was set to expire in 2012, he was sentenced to another five years for unspecified “violations of prison rules.” Bekjanov’s crime was to have served as editor of an opposition party newspaper. “There may be legitimate national security concerns that the U.S. needs to engage on,” Sarah Margon, Washington director of Human Rights Watch, told me. “That doesn’t mean you have to shove everything else under the rug.” There are some encouraging signs that Congress, at least, may be lifting a corner of that rug. In October the congressional Helsinki Commission, which is chaired by Sen. Ben Cardin (D-Md.) and co-chaired by Rep. Chris Smith (R-N.J.), held a briefing on political prisoners in Uzbekistan. Last week eight senators, including Foreign Relations Committee chairman Robert Menendez (D-N.J.), sent Karimov a letter urging the release of five prisoners, including Bekjanov. These are small steps, but they shine some light on Uzbekistan’s crimes. Karimov cares about his reputation, his access to Western weaponry and his officials’ freedom to travel to Europe and the United States. If Obama also would take some small steps, it might make a big difference to the inmates of Uzbekistan’s invisible gulag.

  • Combating Corruption in the OSCE Region: The Link between Security and Good Governance

    Combating corruption is increasingly recognized as the critical factor in ensuring long-term security, because corruption creates fertile ground for social upheaval and instability. The change in government in Ukraine in 2014 was a prime example of how corruption can fuel legitimate popular discontent. Although the Organization for Security and Cooperation in Europe (OSCE) has created new tools to address corruption, tackling the problem requires more than raising awareness and sharing best practices. In many OSCE participating States, systemic issues including lack of media freedom, lack of political will, and lack of an independent judiciary contribute substantially to persistent high-level and low-level corruption. The hearing drew attention to the work of the OSCE in combating corruption in all 57 participating States, with a particular emphasis on the need to build effective institutions and the important role played by civil society in combatting corruption.

  • U.S. Helsinki Commission Marks Five-Year Anniversary of Sergei Magnitsky’s Death

    WASHINGTON—Sunday, November 16 marked the five-year anniversary of the death of Sergei Magnitsky, who was arrested by the Russian government following his investigation into fraud involving Russian tax officials. He died in prison after being held for 11 months without trial.   U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: “It is with sadness and respect that we mark the 5th anniversary of the death of Sergei Magnitsky at the hands of Russian government authorities. During the past five years, the crimes that Sergei first exposed have been further documented.  Despite credible evidence of criminal conduct resulting in Mr. Magnitsky’s death, Russian government officials have failed to bring those responsible to justice. “Perhaps worse, the facts of the case – including misappropriation of Russian tax resources and the ensuing cover-up by Russian government officials – have been distorted, to the extent that the Russian government has posthumously prosecuted the late Mr. Magnitsky for the financial crimes perpetrated by those answerable for his death. “After five years, my outrage at the continuing refusal of Russian leaders’ to confront their own transgressions in the death of Sergei Magnitsky has not abated. Instead, I continue to be amazed at how Russian authorities continue to concoct conspiracy theories attributing blame to others, with tragic consequences: they prohibit their young people from participating in U.S. high school exchange programs, strangle political activity and civic involvement of NGOs, and restrict the media.   “The Russian government has forsaken its obligation to ensure for citizens of the Russian Federation the freedoms of expression, assembly and the right to fair, impartial judicial processes. This rejection has consequences for Russia and its people; for its neighbors, especially Ukraine; and more broadly for us all.   “As we remember Sergei Magnitsky and his sacrifice for justice and transparency in Russia, we and our partners must reaffirm our unwavering support for the international commitments to basic freedoms. The Sergei Magnitsky Rule of Law Accountability Act, enacted in 2012, must continue to be used to demonstrate to the world that the voices of those who seek justice and who speak out about human rights violations are heard and valued by the United States of America.”

  • Helsinki Commission to Hold Hearing on Combating Corruption

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the U.S. Helsinki Commission, today announced the following hearing: “Combating Corruption in the OSCE Region: The Link between Security and Good Governance” Wednesday, November 19, 2014 10:00AM U.S. Capitol Visitor Center Room SVC 203-202 Combating corruption is increasingly recognized as the critical factor in ensuring long-term security, because corruption creates fertile ground for social upheaval and instability. The change in government in Ukraine earlier this year is a prime example of how corruption can fuel legitimate popular discontent. Although the Organization for Security and Cooperation in Europe (OSCE) has created new tools to address corruption, tackling the problem requires more than raising awareness and sharing best practices. In many OSCE participating States, systemic issues including lack of media freedom, lack of political will, and lack of an independent judiciary contribute substantially to persistent high-level and low-level corruption. The hearing will draw attention to the work of the OSCE in combating corruption in all 57 participating States, with a particular emphasis on the need to build effective institutions and the important role played by civil society in combatting corruption. The following witnesses are scheduled to testify: Halil Yurdakul Yigitgüden, Coordinator for Economic and Environmental Affairs, OSCE Khadija Ismayilova, Host of "Isden Sonra" ("After Work"), RFE/RL Azerbaijani Service Shaazka Beyerle, Visiting Scholar at the Center for Transatlantic Relations, School of Advanced International Studies, Johns Hopkins University, and Senior Advisor with the International Center on Nonviolent Conflict Anders Åslund, Senior Fellow, Peterson Institute for International Economics

  • Cardin, Smith Advance Security and Human Rights during Annual Meeting of European Parliamentarians

    WASHINGTON - A bipartisan 8-member Congressional delegation led by Senator Ben Cardin (D-MD), Chairman of the Commission on Security in Europe (U.S. Helsinki Commission), visited Georgia, Azerbaijan and Moldova. In Baku, Azerbaijan, Representative Chris Smith (NJ-04), Co-Chairman of the Commission, headed the U.S. delegation to the Organization for Security and Cooperation in Europe’s Parliamentary Assembly (OSCE PA) from June 28-July 2 that successfully advanced priority security and human rights initiatives. Key among the U.S. initiatives was a resolution introduced by Chairman Ben Cardin condemning Russia’s violation of international commitments by annexing Crimea and directly supporting separatist conflict in Ukraine. Upon passage of the resolution by a 3 to 1 margin, Cardin stated: “Russia is a member of this organization, but is violating its core principles. We must speak up in the strongest possible way and hold Russia accountable for its destabilizing actions and that is what we did here.” Co-Chairman Smith received overwhelming support for his resolution on efforts to combat child sex trafficking. As the Assembly’s Special Representative on Human Trafficking, Smith’s initiative pressed for the formation of a notification system among countries regarding the travel of persons convicted of sex crimes against children, as well as increased cooperation between law enforcement agencies and with the travel industry to prevent child sex tourism. “This resolution provides a tool to mitigate the horrific abuse of children by sexual tourism,” said Smith. “These predators thrive on secrecy, and so the goal is advance notification of sex offender travel so that children can be protected.” In addition to Chairman Cardin and Co-Chairman Smith, the delegation included Commission Ranking Member Senator Roger Wicker (R-MS), Senator Tom Harkin (D-IA), Commissioner Representative Robert Aderholt(R-AL), Commissioner Representative Phil Gingrey (R-GA), Representative David Schweikert (R-AZ) and Representative Adam Schiff (D-CA). The U.S. delegation fielded two of the 18 resolutions considered at the annual session, as well as a total of 19 amendments to several of these resolutions. In an initiative related to Chairman Cardin’s Ukraine resolution, Senator Wicker introduced language adopted by the Assembly recognizing the importance of the OSCE’s military observation missions, including the inspections in Ukraine.  Senator Wicker also participated in a dialogue with fellow parliamentarians on OSCE engagement with partner country Afghanistan. Senator Tom Harkin successfully offered amendments calling for access and equal opportunity for persons with disabilities, including calling for the ratification and implementation of the Convention on the Rights of Persons with Disabilities by all OSCE participating States. Commissioner Representative Robert Aderholt achieved passage of language supporting the integration of Western Balkan countries into the EU and NATO, and, in a separate initiative, highlighted the plight of “disappeared” political prisoners in Turkmenistan and called on that government to finally come clean on the fate of these individuals, one of whom was a former OSCE ambassador. An initiative by Rep. David Schweikert encouraged increased outreach by the OSCE to Mediterranean Partner countries, while Rep. Phil Gingrey brokered an agreement calling for concrete steps to promote clean and affordable energy. Finally, Rep. Smith and Senator Cardin joined an initiative with the Canadian delegation to respond more vigorously to acts of anti-Semitism throughout the participating States. On July 2 the meeting concluded with the adoption of the Baku Declaration, containing broad policy recommendations for the OSCE and its 57 participating States in the fields of political affairs and military security, trade, the environment and human rights. While in Azerbaijan, the delegation also held bilateral meetings with the Government of Azerbaijan, including meeting with President Ilham Aliyev as well as representatives of civil society fighting for media freedom, rule of law and disability rights in Azerbaijan. Bilateral meetings in Georgia and Moldova In addition to attending the OSCE PA’s Annual Session in Azerbaijan, Chairman Cardin led the delegation to stops in Tbilisi, Georgia, and Chisinau, Moldova, for bilateral meetings to discuss expanded ties with the United States as well as regional security in the wake of the crisis in Ukraine. In Georgia the delegation met with the President, Prime Minister, and the leadership of the United National Movement opposition party offering U.S. support and encouraging further democratic reforms, particularly in building a robust and independent judiciary free from corruption and untainted by politically-motivated prosecutions. In Moldova, the delegation met with the Prime Minister and key political leaders across the spectrum on the day the national parliament ratified an historic agreement with the European Union. The delegation also held consultations with the leadership of the OSCE Mission to Moldova, representatives of civil society, and the U.S. Embassy.

  • Importance of Good Governance to Comprehensive Security

    Remarks to the 2014 OSCE Japan Conference on Sharing Experiences and Lessons Learned between the OSCE and Asian Partners for Cooperation in Order to Create a Safer, More Interconnected and Fairer World in the Face of Emerging Challenges Thank you, Mr. Ambassador, for your kind introduction. It’s a pleasure to be here today. I’d also like to thank our Japanese hosts for their very gracious arrangements for this important conference. I am here on behalf of U.S. Senator Ben Cardin, the Chairman of the Commission on Security and Cooperation in Europe, also known as the U.S. Helsinki Commission. The Helsinki Commission is unique in that the U.S. is the only OSCE participating State to create a distinct governmental agency to monitor member state compliance with OSCE commitments. One of the key priorities for our Commission is promoting good governance and combatting corruption, and we were pleased to see the tremendous progress achieved in this area in 2012 with the adoption of the Declaration on Strengthening Good Governance and Combatting Corruption, Money-Laundering and the Financing of Terrorism at the Dublin Ministerial. The Good Governance Declaration is comprehensive, laying out a strategy for the OSCE to combat corruption, strengthen civil society development and enforce accountability measures in the public and private sectors.  The declaration has given some new tools to the Economic and Environmental Coordinator’s office, which plays a critical role in strengthening stability and security in the OSCE region. And last year, the OSCE worked to promote sustainable energy solutions, advocate transparency and accountability, and to build capacity at all levels of society – government, private sector, and its citizens.  These achievements represent a foundation for further enhancing the 2nd Dimension. The U.S. and the EU have recently enacted laws that address the problem of transparency and accountability in the resource sector. In the United States, these laws were authored by the Chairman of the U.S. Helsinki Commission, Senator Ben Cardin. The laws require companies to publicly report payments they make to governments for oil, gas and mining extraction. The concept is that by injecting transparency into a traditionally opaque business environment, the ability of citizens to better understand the money flows allows them to then hold their governments accountable. The laws are meant to innovate the way business is done in this extremely important sector by breaking the cycle of instability and poverty in countries suffering from what is often called the “resource curse”. This innovation can help ensure that energy supplies are not disrupted, it gives citizens a tool to fight corruption, and it levels the playing field for companies. Now that the U.S. and the European Union are implementing these transparency rules, other markets with large resource extraction companies such as Australia and Canada are exploring similar requirements. And we expect that as these rules come online we will see other stock exchanges around the world follow suit. Corruption and lack of transparency in the extractive industries can fuel instability and even conflict, so it’s not hard to see why this type of transparency is catching on. The news is full of headlines on instability created by resource competition or corruption. And resource rich countries are consistently rated as some of the most difficult places to do business. In almost every case you can trace the root cause to the intractable corruption in that country. These transparency laws are the game changers that will help tilt the balance of power away from corrupt leaders. Transparency and accountability are going to make the job of extractive companies easier. They will work on a level playing field, they will work with more stable governments, and they will operate in more stable communities. And the OSCE has a role to play here as well. With the acknowledgment of the importance of combatting corruption in the Good Governance Declaration, the OSCE’s Economic and Environmental Dimension can serve as a valuable platform for increasing stability and security on energy related issues and, in particular, highlighting the link between security, energy, and the environment. As we look toward the Basel Ministerial and the Helsinki+40 process, we must build upon this work and examine how the 2nd Dimension can be further strengthened to advance solutions that build good governance. One of the ways that we can do this is to more actively engage civil society in the 2nd Dimension. We need to welcome multi-stakeholder groups, business groups and civil society leaders to the Economic and Environmental Forum and the Economic and Environmental Implementation meeting in order to generate greater awareness of good governance initiatives, develop new projects, and assess the effectiveness of participating States in implementing these commitments.    Let me close with a comment on Ukraine. I was there two weeks ago to observe the election. Despite the daily reports of violence, what we saw in the conduct of the election makes me hopeful that the newly elected government will be able to move the country forward. But what is painfully clear is that the corruption surrounding Ukraine’s energy sector was a key factor in fueling the protests that eventually led to the downfall of the government. Ukraine is not a big oil and gas producer itself, but it plays a major role as a transit country between Russia and Western Europe. Ukraine has started work on its candidacy for EITI but still has a long way to go so we are encouraging the new government to place a priority on getting that in place. The broader lesson from Ukraine is that secret deals lead to corruption. Corruption leads to economic stagnation.  Economic stagnation leads to political instability.  Political instability leads to violence and human rights abuses, and even opportunistic violations of sovereignty and territorial integrity. This is why we need to innovate the way we do business. This is why we need to focus on transparency and good governance. And this is why we need to empower civil society and media to hold their governments accountable. These are all areas where the OSCE has expertise and where the Asian Partners can provide assistance and experience. Thank you.

  • Senator Cardin’s Floor Statement on Ukraine

    Mr. President, tomorrow we are going to have an opportunity to vote on S. 2124, and I am pleased to learn that it looks as if there is going to be overwhelming support in the Senate for the passage of S. 2124. This is the legislation that helps Ukraine in dealing with the invasion by Russia. Russia's illegal actions of using its military to overtake Crimea, a part of Ukraine, violate numerous international obligations that Russia has committed to. I have the honor of chairing the U.S. Helsinki Commission. The Helsinki Accords were entered into in 1975. Russia was one of the leading forces for forming the OSCE. Russia's taking over of Crimea violates its commitments it made under the Helsinki Final Act. It violates the 1994 Budapest Memorandum, which was signed by the United States, the United Kingdom, Ukraine, and Russia, that guaranteed basically Ukraine's integrity of its land. It violates the 1997 Ukraine-Russia bilateral treaty. It violates the U.N. Charter. The list goes on and on and on. So I believe it is absolutely essential that we have a strong voice in standing with the people of Ukraine. There was absolutely no justification whatsoever for Russia's action. There was no threat to any of the ethnic communities in Ukraine. All the rights of the people were being protected. The country was in transition from a corrupt government to a government that respected the rights of its citizens. If there was any provocation whatsoever of any unrest, it was caused by Russia's presence in Ukraine. We got reports from the chief rabbi in Kyiv that Russia was staging anti-Semitic provocations in Crimea, and the list goes on and on as to what Russia was doing in order to try to give some justification for its actions. Russia's thinly veiled land grab, cloaked in the cloth of self-determination, must not go unchallenged. Here is what I think is critically important: This is a dangerous precedent. We saw Russia use a similar action in Georgia, and now in Crimea in Ukraine. There are other territorial issues involved around the world. If this goes unchecked, if we do not speak with a unified voice, it just encourages more irresponsible action by Russia in other countries. We know that we have concerns about the South China Sea. We know we have concerns about Moldova. There are many other areas where Russia could be involved in its border areas. So all of these issues are matters for us to speak with a strong unified voice. S. 2124 does that. It does it in two principal ways. First, it imposes the sanctions against those responsible for  Russia's invasion into Crimea, Ukraine. It provides sanctions so that these individuals are not permitted to come to the United States. There are economic sanctions in regard to the use of our banking system. These are similar sanctions to what are now being imposed by our European allies. We need to isolate Russia. As we all know, the G8, which included Russia, is now a G7 without Russia. Russia needs to know that there will be sanctions imposed, and they will be stronger sanctions unless they stop this aggressive action. In addition, the legislation provides economic assistance to the new Government of Ukraine. Just 2 weeks ago the Prime Minister of Ukraine was here and met with Members of the Senate. I tell you, it was inspirational to listen to his vision for Ukraine as a democratic, independent state, with full integration into Europe. That is important. He is preparing for a May 25 election for the Presidency of Ukraine. These are all very, very positive steps. But if Ukraine does not have the economic foothold to be able to develop the type of economy and strength in their country, it will be difficult for Ukraine to be maintained as a viable independent state. Here is where the United States and our European allies, and I hope the global community, come together, as we have in this legislation, to provide economic help on a restructured economic plan for Ukraine that will help them move forward in a very constructive way. Mr. President, I must tell you I am disappointed, though, that the reforms of the IMF will be eliminated from this legislation. I think that is regrettable. We are entering into a plan for Ukraine that very much depends upon the IMF's--the International Monetary Fund's--plan to make sure that the moneys we are spending, Europe is spending, and other countries are loaning and providing to Ukraine are based upon a sound economic plan that will work. That is why the IMF is there. And they will be there. But the United States needs to be a full participant in the IMF. We are out of compliance, and here is another opportunity lost for us to be in full compliance with the IMF. I am disappointed about that. But as I said as I took the floor, we must speak with one voice--the Obama administration; the House, the Senate; the Congress--as we stand with the people of Ukraine for their integrity, for their independence, and for the adherence to international principles, which Russia has clearly violated.

  • The New Silk Road Strategy: Implications for Economic Development in Central Asia

    This briefing proposed the question of what the impact will be in the Central Asian region as the United States prepares to leave Afghanistan. This strategy will particularly impact the economies of Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan and Turkmenistan, as the United States has accelerated efforts to integrate Afghanistan with the economies of these countries. Witnesses testifying at this briefing addressed the ability of these governments to create the necessary conditions for more trade and exchange, including infrastructure development, efficient customs regimes and reliable transportation networks. The deep political divisions in this region that prevent collaboration on basic necessities such as water and electricity were also identified as hindrances to building greater economic cooperation. These issues were analyzed in the context of the current situation and the future outlook for economic development along the New Silk Road.

  • Dispatches From Moscow: Luke Harding’s Chilling Tale of KGB Harassment

    This briefing, moderated by Kyle Parker, Policy Advisor at the Commission on Security and Cooperation in Europe, addressed issues of human rights abuses in Russia in the context of the then imminent elections and widespread protests. The witness – Luke Harding, a journalist with the Guardian – remarked on Russia’s human rights abuses which blatantly ignore their commitments to the Helsinki Accords, citing anecdotal evidence. Harding, who had been the only Guardian correspondent to have actually reported from Russia since the 1917 Bolshevik Revolution, had suffered more at the hands of the FSB than any other Western correspondent, due to the fact that, during his four year tenure in Moscow, he comprehensively and repetitively busted Russia’s taboos that make it the security state it is today.

  • Moldova: The Growing Pains of Democracy

    In this briefing, which Commission Staffer Kyle Parker chaired, the focus was on the progress on the implementation of democratic institutions in the former Soviet Republic of Moldova. The briefing took place on the heels of the December elections in the region of Transnistria and what such elections may have portended for the future in terms of normalization of the conflict in the region that had existed for twenty years at the time of the briefing. To be sure, at the time that the briefing was held, Moldova still had a lot of progress to make regarding human rights commitments, particularly as far as corruption and human trafficking were concerned, two intertwined issues that had been of particular interest to the Commission. However, as far as human rights commitments are concerned, Moldova has led the countries of the commonwealth of independent states.

  • Human Rights Play on Magnitsky Murder

    Kyle Parker introduced the briefing, which followed a performance of the play “One Hour Eighteen,” based on the final moments in the life of Russian whistleblower Sergei Magnitsky. After exposing the largest tax fraud in Russian history, Magnitsky was wrongly arrested and tortured in prison. Six months later he became seriously ill and was consistently denied medical attention despite 20 formal requests. On the night of November 16, 2009, he went into critical condition, but instead of being treated in a hospital he was put in an isolation cell, chained to a bed, and beaten by eight prison guards for one hour and eighteen minutes. Sergei Magnitsky was 37 years old and left behind a wife and two children. Those responsible for this crime have yet to be punished and his story has become a global human rights cause and is emblematic of corruption, violence, and impunity in Russia. Parker was joined by Ury Urnov, director of “One Hour Eighteen,”  in discussing the play as an emblematic example of the devastating human cost of corruption and the lack of rule of law in Russia. The play juxtaposed the moving and chilling testimony and documents from Magnitsky's diary; a radio interview with his mother; two judges; a prison doctor and paramedic; an investigator; and a young ambulance paramedic.  

Pages