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Long Shadow of Russian Money Raises Tricky Questions for Swiss BankersSunday, June 19, 2022
January used to be a big month for Swiss bankers and their Russian clients. Many of the Moscow elite had made a tradition of coming to the Alps for the orthodox new year, skiing with their families, then catching up with their financial consiglieri. In St Moritz, one banker recalls how he would book blocks of rooms for his clients. He would entertain them with snow polo, rolling out the charm as they clinked champagne glasses and watched horses charge across a frozen lake. This year he couldn’t tempt a single one. For the best part of a decade, Russian money has coursed through the Swiss banking world. But, as Russia’s relationship with the west has soured in recent years, what was once a source of bumper new profits for Switzerland’s banks has become a financial and reputational risk. In the run-up to Russia’s invasion of Ukraine in February, many wealthy Russians were moving to better safeguard their money from political interference, putting assets in the names of relatives or shifting them to less closely scrutinised jurisdictions, such as Dubai. In its wake, a vast sanitisation operation is under way at Swiss banks, to try and wind down relationships with sanctioned individuals. Neutral Switzerland has matched all of the EU’s punitive financial measures against Russia. More than 1,100 of the Russian elite — including figures such as coal and fertiliser billionaire Andrey Melnichenko and banker Petr Aven, both regular visitors to Switzerland — have become financial personae non gratae in a country many had assumed would keep their fortunes safe. The biggest banks, such as the publicly listed trio of UBS, Credit Suisse and Julius Baer, have declared they will cease all new business in Russia. For critics, though these are weasel words. It is their existing Russian clients that are the problem. No one is expecting many new fortunes to be minted in Russia any time soon. “Switzerland has a terrible history when it comes to Russian dirty money,” says Bill Browder, a longstanding Kremlin critic and a former Russian investor. He is sceptical of how much commitment there is among Swiss bankers to enforcing sanctions. “The Swiss want to be seen as doing something, but they don’t actually want to do anything,” he says. The US Helsinki Commission, an independent US government agency that observes human rights and the rule of law in Europe, agrees. In a report issued in May, it labelled the alpine state and its banks “a leading enabler of Vladimir Putin and his cronies”. The Swiss government responded by calling US secretary of state Antony Blinken in protest. A spokesperson for the Swiss government said president Ignazio Cassis “rejected the [report] in the strongest possible terms”. Like their counterpart in St Moritz, Swiss bankers the FT interviewed for this story all declined to be identified. Many more refused to speak at all. Switzerland’s banking secrecy laws are draconian — talking about clients can earn a lengthy jail term — and talking about Russian clients is even more taboo. “When we were onboarding a lot of these clients [in the 2000s], the entire approach was just very different. And you can’t really say that publicly now,” says one former banker who handled eastern European and Russian clients until retiring two years ago. “These [Russians] were people who had earned so much money, so quickly, that they didn’t know what to do with it. They were basically ideal clients. As long as you had no questions about where that money had come from . . . and, basically, we didn’t.” Quite how much Russian money there is in Switzerland is open to question. In March, the industry body representing Switzerland’s banks, the Swiss Bankers Association (SBA), caused a stir when it released details of a study estimating there was SFr150bn-SFr200bn ($154bn-$205bn) held in accounts for Russian citizens. At the end of last year, the total cash held on behalf of customers by Switzerland’s banks was SFr7,879bn, more half of which was wealth from abroad, according to the SBA. The disclosure prompted hand-wringing in the Swiss media. Commentators, even at conservative outlets such as the newspaper Neue Zürcher Zeitung, asked whether Switzerland should do business with autocratic regimes anywhere in the world any more. But others in the country have defended its economic relationships with Russia. The outspoken finance director of the canton of Zug, an important low-tax centre, said in March it was not his job to “act like a detective” and make judgments on Russian assets. In April, he announced that Zug, home to 37,000 companies, had no sanctioned assets to report back to Bern. Nevertheless, by April, the State Secretariat for Economic Affairs (SECO) announced that it had frozen SFr9.7bn of Russian assets. Authorities have insisted that the amount is proportionate to the scale of asset freezes in other leading financial centres. But Bern has been forced to row back in some cases, and in May it announced it was unfreezing SFr3.4bn of funds. Switzerland cannot freeze funds “without sufficient grounds”, says Erwin Bollinger, a SECO official, who adds that the government has received data on sanctioned accounts at more than 70 of the country’s banks. Direct disclosure by the banks has been patchy. Credit Suisse chief executive Thomas Gottstein told a conference in March that about 4 per cent of assets in his bank’s core wealth management business were Russian — a proportion that would equate to roughly SFr33bn. Meanwhile, UBS, the world’s largest private wealth manager, has disclosed it has $22bn of assets of “Russian persons not entitled to residency in the European Economic Area or Switzerland”, leaving open the question of how much it holds overall. Some 16,500 Russians are permanently resident in Switzerland, and more Russians are accepted for Swiss citizenship than any other nationality, according to the State Secretariat for Migration. Julius Baer has made no direct disclosure of the size or wealth of its Russian client base, though it has said, somewhat elliptically, that the value of assets held by its Moscow-based subsidiary is some SFr400mn. Information from the dozens of other smaller Swiss private banks is even scantier. Even leading industry figures wonder what is being left unsaid. One executive, who for the past two decades has been a senior figure in the private banking world in Switzerland, says he has almost no doubt that the significance of many banks’ close working relationships with sanctioned individuals is being underplayed. “You don’t have dozens and dozens of people employed on your Russia desks if you are not making money in Russia,” he says. Moreover, he adds, many Russian clients have done their business through Swiss banks’ subsidiaries abroad, such as those in Monaco, London or Asia. It is not clear to him whether all these assets have been caught by the Swiss rules. Swiss banks have a legal obligation to record the ultimate beneficial owners of all assets they handle worldwide, but doing so accurately can be tricky in jurisdictions where it is easy for third parties to mask who the owners are. Switzerland’s banks have moved dramatically from the freewheeling approach of previous years, when there was “a run on Russia”, says Thomas Borer, a former leading Swiss diplomat turned consultant, who has worked with prominent Russian clients. He now supports Switzerland’s sanctions policy. “Being militarily neutral does not mean being economically indifferent,” he says. But he argues that Swiss banking culture is still very different from elsewhere in the west. Even the biggest banks, he says, were clinging to relationships with Russian clients as the Ukraine crisis unfolded. The Financial Times revealed that, as late as March, Credit Suisse was asking investors to destroy documents that might expose Russian oligarchs it had done business with to legal risks. One senior relationship manager at a Zurich-based bank agrees. Even as sanctions came in, he says, the dominant approach was to ask, “how can we make this work for the client?” rather than “how do we do this for the government?”. But he defends the approach, saying: “Doing everything you can for your client is a Swiss commitment to excellence. If I was a watchmaker I would want to make the best watches with many complications. And if I was a policeman, then maybe I would want to be the best at catching Russian criminals. But I’m a banker.” There is still legal ambiguity in Switzerland over whether sanctions apply to family members and friends of listed individuals. This has provided a loophole bankers have helped at-risk clients to actively exploit in recent years. Swiss banks have seen “billions” of assets transferred to the names of spouses and children of Russian clients, in a trend that accelerated in the run-up to the war, says one banker. One bank chief executive admitted recently to the FT that there were many “grey areas” in applying sanctions. Part of the problem, he said, was that bank legal departments were struggling to obtain clarity from Bern on which asset transfers were deemed to be evading sanctions and which were not. Many who have been in the industry for a long time decry the new rules they must follow around taking new clients and being certain of the source of their wealth. “Know your customer used to mean just that: do you know the person? Now it is supposed to mean: do you know every little thing about their financial and private life?” says one Geneva-based banker. Many Russians themselves knew the banks were no longer safe havens, particularly since 2018 when Swiss banks began making significant concessions to information sharing on client accounts with other governments. Swiss residency did not protect billionaire Viktor Vekselberg in 2018, for example, when he was targeted by US sanctions; both Credit Suisse and UBS moved to terminate loans with him. The SBA says its members adhere to the highest international standards. Chief executive Jörg Gasser, argues Swiss banks have “no interest in funds of dubious origin” and have rigorous procedures in place to rapidly screen for sanctioned assets. “Swiss banks have been — and still are — very careful and diligent when it comes to accepting client funds,” he says, adding it is important to recognise the huge amount of legitimate business done with Russian entrepreneurs who are not subject to sanctions. For Mark Pieth, emeritus professor of criminal law at the University of Basel and a specialist in white-collar crime, the real story of the past decade is how Switzerland’s lawyers, rather than its bankers, have become the facilitators of hidden foreign money. “Swiss bankers were extremely cosy with Russians in the past,” he says. “Alongside London, this country was the porch for Russians into the west . . . but now I wouldn’t say the problem is so much with the banks — it is all the other intermediaries.” Swiss law gives remarkable sweep to attorney-client privilege, says Pieth, meaning lawyers can refuse to disclose almost anything to the authorities about their clients. The Swiss Bar Association strongly rejects this. “Professional secrecy does not protect against criminal acts,” it says. “Lawyers know the law and know what to do.” One senior industry figure defends the banks’ position unapologetically. He says everybody now wants to know the origins of their luxury jackets. But 10 years ago nobody was asking where they were made, by whom and with what materials. In banking, as in fashion, things have changed, he says, but nobody is haranguing the fashion world in the same way they are criticising banks. Fashion companies, though, have moved with the times and opened up, whereas Switzerland’s banks, for all their insistence on change and compliance, still want to maintain as much of the secrecy surrounding their clients as possible — even at a time of international crisis.
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Why I’m Sad to Be on Russia’s All-Purpose Payback ListTuesday, May 24, 2022
Reading Russia’s latest sanctions list, permanently banning travel to the country by 963 people, saddened me — and not just because my name is on it. It’s a catalogue of hurt from a nation that seems ready to blame everybody but its leaders for its current troubles. The list is very long indeed, running to nearly 100 pages in my printout. Reading so many names, you sense that Russia is deliberately burning nearly all its bridges to the United States. Russia’s ruling elite feels abused by American politicians, business leaders, journalists, judges, think tanks — nearly everyone, it seems. Donald Trump can still visit Moscow, but scores of Republican members of Congress can’t. The list of excluded GOP senators ranges from moderates such as Roy Blunt of Missouri and Mitt Romney of Utah to hard-right stalwarts Ron Johnson of Wisconsin and Tom Cotton of Arkansas. The GOP doesn’t fare much better in the House. Moderates Liz Cheney of Wyoming and Mike Gallagher of Wisconsin can’t tour the Kremlin anymore, but neither can Jim Jordan of Ohio or Marjorie Taylor Greene of Georgia. As for Democrats, forget about it. The sanctions list includes the Democratic House leadership, including Speaker Nancy Pelosi of California, Majority Leader Steny H. Hoyer of Maryland and Democratic Whip James E. Clyburn of South Carolina. The Congressional Progressive Caucus can save its rubles, too. The members of “the Squad” are all banned. So are Pramila Jayapal of Washington state and Ro Khanna of California. It’s the same on the Senate side. Majority Leader Charles E. Schumer of New York and Whip Richard J. Durbin of Illinois: Nyet, nyet.
Helsinki Commissioners Lead Bipartisan Ask for Biden to Sanction Russians Responsible for Jailing Opposition Leader Vladimir Kara-MurzaThursday, May 12, 2022
WASHINGTON—U.S. Senator Ben Cardin (MD), author of the Global Magnitsky Human Rights Accountability Act and Chair of the Commission on Security and Cooperation in Europe (Helsinki Commission), along with Helsinki Commission Ranking Member Senator Roger Wicker (MS) and Commissioners Senators Jeanne Shaheen (NH) and Sheldon Whitehouse (RI) are urging President Joe Biden to publicly sanction “every Russian official and associate involved with the false arrest, detention, and political persecution of Vladimir Kara-Murza.” The lawmakers made the plea last week in a letter that also was signed by U.S. Representatives Steve Cohen (TN-09), Co-Chair of the Helsinki Commission; Joe Wilson (SC-02), Ranking Member of the Helsinki Commission; Gerald Connolly (VA-11); John Curtis (UT-03); Brian Fitzpatrick (PA-01), Ruben Gallego (AZ-07); Richard Hudson NC-08); Sheila Jackson-Lee (TX-18); Marcy Kaptur (OH-09); Bill Keating (MA-09); Adam Kinzinger (IL-16); Tom Malinowski (NJ-07); Peter Meijer (MI-03); Mike Levin (CA-49); Gwen Moore (WI-044); Burgess Owens (UT-04); Katie Porter (CA-45); Maria Elvira Salazar (FL-27); Abigail Spanberger (VA-07); and Marc Veasey (TX-33). “Kara-Murza is a Russian opposition politician who has long stood up against Russian dictator Vladimir Putin. He embodies what Russia might be one day when it is democratic and free,” the lawmakers wrote. “As Russia loses its brutal war of aggression against Ukraine, we must consider what might come next in that country. Kara-Murza offers a vision of a Russia free from imperialist kleptocracy. He has bravely answered the call of many Ukrainians for Russians to take a stand and oppose this bloody and senseless war. He must be immediately freed and allowed to continue his work.” The full letter is below and can be downloaded at this link. President Joseph R. Biden, Jr. The White House 1600 Pennsylvania Ave., NW Washington, DC 20500 Dear President Biden, We urge you to name and sanction every Russian official and associate involved with the false arrest, detention, and political persecution of Vladimir Kara-Murza. Kara-Murza is a Russian opposition politician who has long stood up against Russian dictator Vladimir Putin. He embodies what Russia might be one day when it is democratic and free. We also urge you to examine whether to sanction those involved in the persecution and imprisonment of other Russian political prisoners. Kara-Murza is a Russian patriot who has fought for decades for democracy in Russia and a prosperous future for his country. For this, the regime in Russia has poisoned him twice. On April 11, while in Russia, Kara-Murza called this regime “a regime of murderers.” He was then arrested, and now faces trumped up charges that may result in years of unjust imprisonment. Kara-Murza was the key Russian activist behind the passage of the Magnitsky Act and its adoption by our allies. The late Senator John McCain called him “one of the most passionate and effective advocates for the passage of the Magnitsky Act.” Kara-Murza himself, like his mentor Boris Nemtsov before him, has called the Magnitsky Act the most “pro-Russian law passed in the United States in the history of our countries.” Nemtsov was murdered in front of the Kremlin. The Magnitsky Act is the appropriate tool to sanction those involved in the persecution of Kara-Murza. We ask that you coordinate with our allies to sanction these individuals at the same time. The European Union, the United Kingdom, Canada, and Australia now all have Magnitsky sanctions laws of their own. As Russia loses its brutal war of aggression against Ukraine, we must consider what might come next in that country. Kara-Murza offers a vision of a Russia free from imperialist kleptocracy. He has bravely answered the call of many Ukrainians for Russians to take a stand and oppose this bloody and senseless war. He must be immediately freed and allowed to continue his work. Sincerely,
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Swiss Release Some Frozen Russian AssetsThursday, May 12, 2022
The Swiss government on Thursday reported 6.3 billion Swiss francs ($6.33 billion) worth of Russian assets frozen under sanctions to punish Moscow's invasion of Ukraine, a drop from early April as around 3.4 billion francs in provisionally blocked assets were released. The figure marked a decrease from roughly 7.5 billion Swiss francs in funds the government reported frozen on April 7. Government official Erwin Bollinger pointed to fewer funds -- 2.2 billion francs -- newly frozen than those that had been released. read more "We can't freeze funds if we do not have sufficient grounds," Bollinger, a senior official at the State Secretariat for Economic Affairs (SECO) agency overseeing sanctions, told journalists. Pressure has increased on Switzerland -- a popular destination for Moscow's elite and a holding place for Russian wealth -- to more quickly identify and freeze assets of hundreds of sanctioned Russians. read more The U.S. Helsinki Commission, a government-funded independent commission which looks at security, cooperation and human rights issues in Europe, in early May called Switzerland "a leading enabler of Russian dictator Vladimir Putin and his cronies", who the commission said used "Swiss secrecy laws to hide and protect the proceeds of their crimes". The Swiss government rejected the accusations "in the strongest possible terms", while Swiss President Ignazio Cassis had requested the U.S. government "correct this misleading impression immediately" during a telephone call with U.S. Secretary of State Antony Blinken. Swiss banks hold up to $213 billion of Russian wealth, Switzerland's bank lobby estimates, with its two largest lenders UBS (UBSG.S) and Credit Suisse (CSGN.S) each holding tens of billions of francs for wealthy Russian clients. read more Credit Suisse alone froze some 10.4 billion Swiss francs of that money through March under sanctions imposed in connection with the invasion. read more Credit Suisse's reporting did not make clear how much of that money was frozen in Switzerland. While banks and asset managers can provisionally freeze funds, SECO officials on Thursday said funds needed to be released if they could not establish the assets were directly owned or controlled by a sanctioned individual. "The amount of assets frozen is not a measure of how effectively sanctions are being implemented," Bollinger said, adding asset freezes were "by far" not the most important measure in a wide-ranging packet of sanctions. ($1 = 0.9948 Swiss francs)
Russia's Swiss EnablersThursday, May 05, 2022
Long known as a destination for war criminals and kleptocrats to stash their plunder, Switzerland is a leading enabler of Russian dictator Vladimir Putin and his cronies. After looting Russia, Putin and his oligarchs use Swiss secrecy laws to hide and protect the proceeds of their crimes. Close relations between Swiss and Russian authorities have had a corrupting influence on law enforcement personnel in Switzerland and have led to the resignation of numerous officials, including the head prosecutor of Switzerland. A recent Organized Crime and Corruption Reporting Project investigation found that Credit Suisse catered to dozens of criminals, dictators, intelligence officials, sanctioned parties, and political actors, and identified problematic accounts holding more than $8 billion in assets. According to the Financial Times, Credit Suisse also asked investors to destroy documents linked to yacht loans made to oligarchs and tycoons. This briefing examined the relationship between Switzerland and Russia in light of Putin’s full-scale invasion of Ukraine. Panelists discussed how a compromised Switzerland affects U.S. national security and whether the United States should rethink its strategic bilateral relationship with Switzerland. Related Information Panelist Biographies How the Swiss Law Enforcement Capitulated to the Russians in the Magnitsky Case - Bill Browder
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Swiss Attacked for Going Easy on Seizing Russian BillionsThursday, May 05, 2022
The $7.6 billion in Russian assets seized to date by Swiss authorities is “insulting,” outspoken Kremlin critic Bill Browder said at briefing on Russian money in Switzerland. It’s “a lot of money in absolute terms but Switzerland is one of the main destinations for dirty Russian money,” said Browder. Given the Swiss Bankers Association has said there’s as much as 150 to 200 billion Swiss francs ($202 billion) in Russian assets in the country’s banks “I would almost say it’s slightly insulting,” he said. Browder, who has also highlighted what he perceives to be Swiss prosecutors’ soft approach to investigating Russian financial crime, called on the U.S. to review its cooperation framework with its Swiss counterparts, during the hearing organized by the Commission on Security and Cooperation in Europe on Thursday. “Based on my experience, it would lead me to believe the Swiss are knowingly turning their head the other way when it comes to some of the other oligarchs,” said Browder. The Swiss government said a month ago it had blocked 7.5 billion Swiss francs ($8 billion) in Russian assets in the country to date, as it issues sanctions that mirror those imposed by the European Union on those seen as close to Vladimir Putin. That figure represented a jump of 30% from their previous tally two weeks earlier and Swiss officials say the number will continue to rise as more assets hidden behind shell companies or in the names of associated are painstakingly uncovered. Switzerland surprised the world in early March by departing from its tradition of neutrality and saying it would fully embrace the European Union measures against Russia. But critics including Browder contend that the country needs to go much further. Read more: Swiss Hunt for Russian Wealth Criticized Despite $6 Billion Haul Erwin Bolliger, the chief of the Swiss Secretariat for Economic Affairs which is enforcing the sanctions, has tried to explain the gap by pointing out that are plenty of legitimately-held Russian investments in Switzerland. “There is merit in Bill’s suggestion to review the law enforcement relations between the U.S. and Switzerland,” said Mark Pieth, a law professor at the University of Basel and corruption expert, said at the hearing. Up until now, Switzerland’s approach to clamping down on dirty Russian money in the country has shown a “lack of courage,” Pieth said.
Helsinki Commission Briefing to Examine Swiss Enabling of Russian OligarchsFriday, April 29, 2022
WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following online briefing: RUSSIA’S SWISS ENABLERS Thursday, May 5, 2022 10:00 a.m. Register: https://ushr.webex.com/ushr/j.php?RGID=r72f85e0c40a09b609b328a9481f54063 Long known as a destination for war criminals and kleptocrats to stash their plunder, Switzerland is a leading enabler of Russian dictator Vladimir Putin and his cronies. After looting Russia, Putin and his oligarchs use Swiss secrecy laws to hide and protect the proceeds of their crimes. Close relations between Swiss and Russian authorities have had a corrupting influence on law enforcement personnel in Switzerland and have led to the resignation of numerous officials, including the head prosecutor of Switzerland. A recent Organized Crime and Corruption Reporting Project investigation found that Credit Suisse catered to dozens of criminals, dictators, intelligence officials, sanctioned parties, and political actors, and identified problematic accounts holding more than $8 billion in assets. According to the Financial Times, Credit Suisse also asked investors to destroy documents linked to yacht loans made to oligarchs and tycoons. This briefing will examine the relationship between Switzerland and Russia in light of Putin’s full-scale invasion of Ukraine. Panelists will discuss how a compromised Switzerland affects U.S. national security and whether the United States should rethink its strategic bilateral relationship with Switzerland. The following panelists are scheduled to participate: Bill Browder, Head, Global Magnitsky Justice Campaign Miranda Patrucic, Deputy Editor in Chief, Regional and Central Asia, Organized Crime and Corruption Reporting Project Mark Pieth, President of the Board, Basel Institute on Governance
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Biden administration urged to ban UK lawyers who ‘enabled’ oligarchsTuesday, April 19, 2022
A member of Congress has urged the Biden administration to place travel bans on senior British lawyers that acted for wealthy Russian clients against investigative journalists. Steve Cohen, a Democratic representative from Tennessee, has written to Antony Blinken, the US secretary of state, urging him to sanction the lawyers for having “enabled malign activities of Russian oligarchs”. His letter comes as the Biden administration looks to increase its support for Ukraine in its war against Russia and tighten sanctions against those who have supported the Russian regime. Cohen wrote: “Oligarchs who hire lawyers to engage in abusive cases against journalists to silence them cannot exert malign influence in our system . . . the United States must establish deterrents for foreign enablers serving individuals who are undermining democracy.” The state department did not respond to a request for comment. Cohen singled out several lawyers he believed should be subject to bans on visas for travel to the US: Nigel Tait of Carter-Ruck; John Kelly of Harbottle & Lewis; barrister Hugh Tomlinson; Geraldine Proudler of CMS; Keith Schilling of Schillings; and Shlomo Rechtschaffen of SR law. Each of the lawyers is well known in London legal circles, with firms like Carter-Ruck and Schillings having established strong reputations in defamation law and reputation management. Tait, Kelly, Tomlinson and Proudler all worked on recent cases against the former Financial Times journalist Catherine Belton or her publisher HarperCollins, or both. Belton and HarperCollins were sued last year by several Russian oligarchs including Roman Abramovich over her book Putin’s People, which details the rise to power of Russia’s president Vladimir Putin. The lawsuits were later settled or withdrawn. Cohen cited Schillings’ work for Malaysian businessman and fugitive Jho Low. British ministers have expressed concern over the way in which UK courts are used by wealthy foreigners to launch libel cases. Dominic Raab, the justice secretary, last month set out proposals to limit any so-called Strategic Lawsuits Against Public Participation. Also in March Bob Seely, the MP for the Isle of Wight, used parliamentary privilege to claim “amoral” City lawyers were teaming up with “Putin’s henchmen” to offer “legalised intimidation”. A spokesperson for Tomlinson said: “Regulatory rules for lawyers are very strict and work to ensure equal entitlement to independent legal advice. Mr Tomlinson acted properly and in accordance with those rules throughout and has never acted as Mr Cohen suggests.” Tait’s firm Carter-Ruck said: “The claims made against Carter-Ruck are misconceived and are rejected entirely. In addition to other matters, we are not working for any Russian individuals, companies or entities seeking to challenge, overturn, frustrate or minimise sanctions.” It added: “We are not acting for, and will not be acting for, any individual, company or entity associated with the Putin regime in any matter or context, whether sanctions-related or otherwise, and will continue to conduct all ‘know your client’ checks in accordance with all applicable laws and regulations, as we have always done.” Cohen cited Rechtschaffen for his representation of Israeli-British businessman Walter Soriano, who he alleged was an “enabler” of certain oligarchs including Abramovich. Rechtschaffen said: “Walter Soriano is not an enabler of any oligarch . . . The English courts have said that the claim against Mr Stedman is not abusive.” Harbottle & Lewis said the firm had “acted at all time in accordance with its professional and legal obligations, and takes these matters very seriously”. Schillings said the firm did not act for any sanctioned entities and could not comment on client matters. It added that Cohen’s allegations were “wholly misplaced” and “misinformed”. It said the firm had upheld “the highest traditions of the legal profession”. Proudler’s firm CMS said it rejected Cohen’s allegations, adding that Proudler and the firm had been “compliant with all professional regulations”. “As we have said since the invasion of Ukraine, CMS is no longer accepting new instructions from Russian based entities or from any individuals with connections to the Russian government.”
Helsinki Commission Urges U.S. Administration to Consider Sanctioning Remaining Individuals Involved in Persecution of Sergei MagnitskyMonday, April 18, 2022
WASHINGTON—Helsinki Commission Chairman Sen. Ben Cardin (MD), Co-Chairman Rep. Steve Cohen (TN-09), and Ranking Member Rep. Joe Wilson (SC-02) today released a letter sent April 15 to President Biden urging the U.S. administration to consider sanctioning the remaining individuals involved in the persecution of Sergei Magnitsky, the fraud he uncovered, and the coverup of his death in 2009. The letter read in part: “The passage and enforcement of the Magnitsky Act was among the rare times in the last decade that the United States rightly put universal values first in its relationship with Russia. Sergei Magnitsky courageously stood up to the Putin regime’s corruption and represents what Russia might be one day. He has served as an inspiration for Russian activists and civil society who dream of a Russia that respects human rights and complies with its own freely undertaken international commitments… “At this time of great upheaval, it could not be more important that the United States demonstrate its commitment to universal values. Sanctioning these individuals responsible for dismantling the rule of law in Russia and killing one of Russia’s bravest whistleblowers would have this effect.” Included with the letter was a list that includes the names and identifying information of 255 individuals who have not yet been sanctioned for their apparent role in Sergei Magnitsky’s death and the $230 million tax fraud he exposed. The list was compiled by Hermitage Capital Management LLC, the firm where Sergei Magnitsky worked at the time of his arrest and murder. The full letter and list are available online.
Co-Chairman Cohen Welcomes Conclusion of First Round of French Presidential ElectionsTuesday, April 12, 2022
WASHINGTON—Following the first round of presidential elections in France on April 10, Helsinki Commission Co-Chairman Rep. Steve Cohen (TN-09) issued the following statement: “As co-chairman of the bipartisan U.S. Helsinki Commission, I congratulate the French people for making their voices heard on Sunday during the first round of their presidential elections. France is among the world’s most long-standing democracies, America’s oldest ally, and a vital voice in Europe and around the world for our common liberal values. “Those same values are under unprecedented and brutal assault by Russia in Ukraine. As we look ahead to the second round of elections later this month, I am confident that the French people will choose their leaders based on the strength of their principles, and reject apologia and disinformation on behalf of dictators like Russia’s Vladimir Putin. “Putin has no principles beyond conquest and banditry, as Russia’s illegal war against Ukraine and its uncivilized campaign of atrocity there attest. The Kremlin’s imperial war in Ukraine is inseparable from the totalitarian regime it has erected at home, along with the destruction of the last vestiges of civil society and press freedom, and its efforts to undermine trust in Western governments—including in great democracies like France. “I have faith in France’s powerful democracy, and offer my warmest wishes to the French people as we continue our rich friendship based on common values and in defiance of tyrants and demagogues.”
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Russia Critics Press Congress for Curbing Moscow's Role in International GroupsWednesday, April 06, 2022
Critics of Moscow pressed lawmakers to sever remaining international connections with Moscow and punish what they called enablers of Russian President Vladimir Putin’s government—including Russian tycoons. “We recognize that the oligarchs are the appendages of Mr. Putin’s mafia state,” said Sen. Ben Cardin (D., Md.), the co-chairman of the Commission on Security and Cooperation in Europe, known as the Helsinki Commission, which held a hearing Wednesday on Russia's financial ties abroad. “I can’t wait to see police tape around mansions in Miami," said Sen. Sheldon Whitehouse (D., R.I.). Witnesses before the commission, a U.S. agency that has frequently scrutinized Moscow, sought to portray Russian billionaires and their network of lawyers and agents in the West as little different from Russian government employees and its lawyers abroad. Bill Browder, a prominent critic of the Kremlin’s human-rights record, called on the U.S. to withdraw from the mutual legal-assistance treaty that allows U.S. and Russian law enforcement to cooperate on investigations and secure witness testimony. Western countries should ban lawyers paid by the Russian government in one country from traveling to their countries, he said. The Kremlin used the Interpol international law-enforcement network in an effort to arrest Mr. Browder after his lawyer died in a Russian prison in 2009. Mr. Browder, who founded investment fund Hermitage Capital, said the U.S. and partner countries should seek to remove Moscow from Interpol or “basically threaten the funding of Interpol if Russia is not expelled.” Mr. Browder was the largest private investor in Russia until his expulsion from that country in 2005. Moscow should also lose its membership and face blacklisting by the Financial Action Task Force, a Paris-based intergovernmental body that audits the ability of nations to detect and disrupt illicit finance, said Daria Kaleniuk, co-founder of the Anti-Corruption Action Center in Ukraine. Mr. Browder and Ms. Kaleniuk were among five witnesses at the hearing.
Countering Oligarchs, Enablers, and LawfareWednesday, April 06, 2022
As influential proxies of Russian dictator Vladmir Putin, Russian oligarchs work to weaken Western democracies from within. They pay Western enablers—especially lawyers and lobbyists—millions to use their standing in democratic societies to generate policies favorable to the authoritarian regime in Russia and to silence its critics. On April 6, 2022, the Helsinki Commission heard from five witnesses who testified on the corruption of Russian oligarchs, as well as the various means through which such oligarchs censure journalists from reporting on their nefarious activities. Helsinki Commission Chairman Sen. Ben Cardin (MD) opened the hearing by recognizing oligarchs as appendages of Putin’s government who have engaged in extensive laundering and looting of the Russian state. He stressed the importance of sanctioning oligarchs, who utilize the existing financial and judicial frameworks of Western democracies to protect themselves from legal harm, as well as their accountants and lawyers, who utilize lawfare as means of continuing their kleptocratic ways and silencing those who report on their crimes. “We have to fortify our system against lawfare,” he stated. “And we hope that we can win this fight.” Helsinki Commission Co-Chairman Rep. Steve Cohen (TN-09) asserted that oligarchs, while stealing and oppressing the Russian public, also are funding the Russian invasion of Ukraine. “In exchange for the lavish lifestyles that they live, these oligarchs pledge their loyalty to the mid-level KGB agent… currently overseeing Europe’s biggest land war since 1945,” he remarked. Ranking Member Rep. Joe Wilson (SC-02) described Russia’s invasion of Ukraine as a battle between the virtues of the free world and the vices of a corrupt state. “Putin ordered the invasion of Ukraine because Ukraine is a democracy… because it shows accountability over corruption,” he stated. “This is the most black and white conflict in recent memory.” Daria Kaleniuk, executive director of the Ukrainian Anti-Corruption Action Centre, testified that Putin’s invasion of Ukraine was due to fear of Ukraine’s fight against corruption. On February 22, when Putin declared war on Ukraine, he referred to numerous anti-corruption reforms for which the Ukrainian Anti-Corruption Action Centre had advocated. “It was clear to me in that moment that Ukraine’s successful story in fighting corruption is actually the ultimate threat to Vladmir Putin and to his kleptocratic regime,” she remarked. She argued that integral to Putin’s success throughout the years is his legion of legal and financial professionals. “There are two battlefields,” she stated. “One in Ukraine…. And another one in the West, where America is obligated to fight by targeting Russian oligarchs and their enablers.” Bill Browder, head of the Global Magnitsky Justice Campaign, described his experience following the passing of the Magnitsky Act, which allows the United States to freeze the assets of kleptocrats and human-rights violators. He highlighted the team of Western professionals who helped Putin target him for his work to passing the legislation. To ensure these Western enablers are held accountable for their actions, Browder recommended that Congress speak out and deny government employment to such organizations in the future. “We should make a list of these type of firms that do this enabling, this list should be put together by the U.S. Congress, and there should be a recommendation to the U.S. Government not to do business with these firms going forward,” he said. “They can pick sides. They can decide they want to work for the bad guys. And if they work for the bad guys, then they shouldn’t get any money from the U.S. government. Scott Stedman, founder of Forensic News, described the increased use of lawfare by oligarchs as a weapon to intimidate reporters into silence. He spoke of his experience reporting on Walter Soriano, a businessman with reported ties to multiple Russian oligarchs. Soriano filed a lawsuit against Forensic News and its contributors, attempting to silence Stedman through financial intimidation and lawfare. “Mr. Soriano’s U.S. litigation counsel Andrew Brettler wrote to me threatening yet more legal action if I did not pay a U.K. court for more money than I’ve ever had in any bank account,” he said. “This is what lawfare looks like. It is designed to suppress, stall, scare critical coverage of the Russian elite and their enablers.” Anna Veduta, vice president of the Navalny Anti-Corruption Foundation International, outlined the need to sanction corrupt Russian politicians, oligarchs, enablers, and their family members. The assets these oligarchs and enablers have acquired are held by relatives, she argued, who have yet to be sanctioned. “People responsible for these lies, people who are poisoning Russian people with these lies, still can enjoy spring break in Miami and take their kids to Disneyland,” she said. “So I am going to quote Alexei Navalny once again, ‘Warmongers must be treated as war criminals.’” Shannon Green, executive director of the USAID Anti-Corruption Task Force and senior advisor to the Administrator highlighted the reliance of autocrats like Putin on oligarchs and enablers. She reviewed USAID initiatives to support reform coalitions and confront lawfare domestically, as well as efforts to develop new programs to confront kleptocracy abroad. Addressing her fellow panelists, she stated, “Anna, Bill, Daria, Scott, we draw inspiration and courage from your example. And the U.S. government’s message to you, and to all of your fellow change agents, is: Be not afraid. We stand with you.” Related Information Witness Biographies Statement for the Record: Arabella Pike, Publishing Director, HarperCollins Publishers
Helsinki Commission Hearing to Examine Ways to Counter Oligarchs, Enablers, and LawfareWednesday, March 30, 2022
WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following hearing: COUNTERING OLIGARCHS, ENABLERS, AND LAWFARE Wednesday, April 6, 2022 2:30 p.m. Dirksen Senate Office Building Room 562 Watch live: www.youtube.com/HelsinkiCommission As influential proxies of Russian dictator Vladimir Putin, Russian oligarchs work to weaken Western democracies from within. They pay Western enablers—especially lawyers and lobbyists—millions to use their standing in democratic societies to generate policies favorable to the authoritarian regime in Russia and to silence its critics. This hearing will examine ways to counter tactics oligarchs use to launder their money and reputations and stifle dissent. Witnesses will discuss their experiences investigating oligarchs and enablers, as well as the risks of doing so, which include abusive lawsuits filed by Western lawyers on behalf of Putin’s proxies. The following witnesses are scheduled to testify: Shannon Green, Executive Director, USAID’s Anti-Corruption Task Force; Senior Advisor to the Administrator Bill Browder, Head, Global Magnitsky Justice Campaign Daria Kaleniuk, Executive Director, Anti-Corruption Action Centre Scott Stedman, Founder, Forensic News Anna Veduta, Vice President, Anti-Corruption Foundation International
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With oligarchs in the crosshairs, alleged Western 'enablers' attract fresh scrutinyThursday, March 24, 2022
As governments scramble to seize high-profile assets owned by Russian oligarchs, a quiet effort is gaining momentum in the West to target their alleged “enablers” – the lawyers, lobbyists and money-handlers who critics say help them hide, invest and protect their vast wealth in U.S. and European institutions. “The yachts and jets and villas get the most attention, but a lot of the oligarchs’ money is in private equity and hedge funds – places we can’t see,” said Maira Martini, a researcher with the corruption watchdog Transparency International. “That’s the money that really matters to them.” For decades, wealthy business tycoons with close ties to Russian President Vladimir Putin have enlisted the services of reputable bankers and lawyers in the West to navigate loopholes that obscure their identity. While it's not necessarily illegal to use obscure entities and agents to protect finances, critics say the laws need to be strengthened to create more transparency. rganized Crime and Corruption Reporting Project, a global investigative reporting platform that focuses on corruption, organized crimes and illicit financing, claims to have uncovered over 150 assets worth $17.5 billion held by 11 Russian elites and their alleged enablers, while a Forbes report identified more than 82 properties across the world -- a collective of $4.3 billion -- held by 16 sanctioned Russian oligarchs. Assets that have surfaced are likely only a fraction of these oligarchs' actual wealth. The true extent is difficult to track because they often use a convoluted network of shell companies, obscure entities and stand-ins to keep their finances hidden, experts said. But now, with war raging in Ukraine, lawmakers and corruption watchdogs are calling on governments to close those loopholes and crack down on the middlemen who know how to exploit them. “Putin’s oligarchs cannot operate without their Western enablers, who give them access to our financial and political systems,” said Rep. Steve Cohen, D-Tenn. “These unscrupulous lawyers, accountants, trust and company service providers and others need to do basic due diligence on their clients to ensure that they are not accepting blood money. This isn’t rocket science – it is common sense policy to protect democracy.” In Washington, Cohen and others have introduced the ENABLERS Act, which would require real estate brokers, hedge fund managers and other entities to “ask basic due diligence questions whenever somebody comes to them with a suitcase full of cash,” said Rep. Tom Malinowski, D-N.J., the lead sponsor of the bill. The International Consortium of Investigative Journalists, a global network of journalists and newsrooms that have tracked the wealthy's tax havens and financial secrecy, has identified at least a dozen networks of facilitators, offshore agents and banks across the world that have allegedly helped Russia's elites move and hide their money based on its analyses of public records and leaked financial documents the group has obtained over the past decade. This includes a range of actors, from global offshore law firms that create shell companies and other obscure entities to help wealthy Russians keep their finances clouded, to one-man shops in offshore tax havens that help set up "nominee" shareholders and paid stand-ins to conceal the real owners of entities. ICIJ also points to the roles of major law firms in helping shape the modern tax avoidance system as well as the roles of big financial institutions and banks in helping wealthy Russians move their money. Last year, The Washington Post, as part of its collaboration with ICIJ's Pandora Papers project, reported on how South Dakota, with its limited oversight, vague regulations and trust secrecy, has become a tax haven for secretive foreign money. Malinowski stressed that the United States "has become one of the easiest places in the world for corrupt kleptocrats around the world to hide money." “What we've basically allowed is a system where people can steal their money in countries without the rule of law and then protect their money in countries like ours where they can count on property rights and courts and privacy rules to safeguard his loot for life," Malinowski said. "We should not be complicit in the theft that supports dictatorships like Putin." Experts warned that sanctions and asset seizures, while effective in the short term, may be toothless over time if secrecy loopholes remain in place. On Wednesday, Transparency International published an open letter calling on Western leaders to take steps to stem rules that foster opacity. “To disguise their wealth and keep them out of the reach of law enforcement authorities, kleptocrats will turn to lawyers, real estate agents, banks, crypto-service providers and banks in your countries,” the letter reads. “You must redouble your supervision efforts over the gatekeepers of the financial sector.”
Chairman Cardin Emphasizes the Importance of the Global Magnitsky ActWednesday, March 23, 2022
Madam President, reserving the right to object to the request from the Senator from Idaho, it is my understanding that the Senator’s modification would not include provisions that were included in the Housepassed legislation that modifies the global Magnitsky sanction regime. I just would like to speak for a moment, if I might. There is no question that we stand with the people of Ukraine against the unprovoked attack by Mr. Putin. We are inspired every day by the courage of the Ukrainian people and by their inspirational leader, President Zelenskyy. The United States has shown leadership, and I congratulate the Biden administration. We have led the free world in providing defensive lethal weapons to Ukraine to defend itself. We have provided humanitarian assistance, joining the global community, including dealing with 3 million Ukrainians that are now refugees in other countries and 10 million that have been displaced as a result of Mr. Putin’s unprovoked attack. And we have led on sanctions. We have led in getting the global unity to impose sanctions against not just the Russian sectors, but also against individuals. And when Mr. Zelenskyy spoke before the Members of Congress, he specifically mentioned the importance of these sanctions; and he asked us to expand those covered by the sanctions to include the enablers, those that are enabling Mr. Putin—the oligarchs—to be able to fund his aggression against Ukraine. So what did the House send over to us? In their bill, they sent over a global Magnitsky modification. It is identical to legislation that was filed by Senator PORTMAN and myself that included the revocation of PNTR for Russia, along with the global Magnitsky. First and foremost, it removes the sunset that is in the legislation that would sunset this year. Mr. Zelenskyy asked for us to be resolved in being willing to stand up to Mr. Putin, that it would take some time. A clear message is that we remove the sunset on the global Magnitsky statute. And we know how difficult it is to get legislation passed in this body. It also expands the global Magnitsky to include the enablers—exactly what Mr. Zelenskyy asked us to do—those that enabled—the oligarchs that allowed him to be able to finance this. The language that is included in here is very similar to the language that was included in President Trump’s Executive order. This is critical legislation. Now, let me just tell you how appropriate it is that it is included in a PNTR bill—because the first Magnitsky sanction bill—and Senator WYDEN was very important in getting this done—was included in the original PNTR bill for Russia, and we were able to get it done at that time. We then made it a global Magnitsky, and my partner on that was the late Senator McCain. It has always been bipartisan. My partner now is Senator WICKER. The two of us have joined forces to make sure we get it done now. It is critically important in order to impose banking restrictions on those that are targeted under the global Magnitsky, as well as visa restrictions on being able to travel. How important is it? Ask Mr. Usmanov, who is one of the principal oligarchs to Mr. Putin, who solves Mr. Putin’s business problems. Guess how he solves those problems? Well, his yacht has now been confiscated in Germany. That is how important these sanctions are and how we have to move them forward. So, if I understand my colleague’s request, it would deny the opportunity for us to act on the global Magnitsky, which Mr. Zelenskyy has specifically asked us to do. We would lose that opportunity. We would be sending this bill back to the House that is not in session, which means there will be a further delay in repealing PNTR for Russia, which is something we need to do now, today. We can get it to the President for signature today under the majority leader’s request. And as the majority leader has indicated, I support the energy ban—I support the Russian energy ban. President Biden has already taken steps to do that. And I agree with my colleague from Idaho. I would like to incorporate that in statute, but there is no urgency to do that as there is on repealing PNTR and the global Magnitsky. That is the urgency. That is what we need to get done today. That is what we can get to the President this afternoon under the majority leader’s request, and that will be denied if my friend from Idaho’s request were granted. So, for all those reasons, I object.
Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 397) voicing concern about serious violations of human rights and fundamental freedoms in most states of Central Asia, including substantial noncompliance with their Organization for Security and Cooperation in Europe (OSCE) commitments on democratization and the holding of free and fair elections, as amended.
The Clerk read as follows:
H. Con. Res. 397
Whereas the states of Central Asia--Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan--have been participating states of the Organization for Security and Cooperation in Europe (OSCE) since 1992 and have freely accepted all OSCE commitments, including those concerning human rights, democracy, and the rule of law;
Whereas the Central Asian states, as OSCE participating states, have affirmed that every individual has the right to freedom of thought, conscience, religion or belief, expression, association, peaceful assembly and movement, freedom from arbitrary arrest, detention, torture, or other cruel, inhuman, or degrading treatment or punishment, and if charged with an offense the right to a fair and public trial;
Whereas the Central Asian states, as OSCE participating states, have committed themselves to build, consolidate, and strengthen democracy as the only system of government, and are obligated to hold free elections at reasonable intervals, to respect the right of citizens to seek political or public office without discrimination, to respect the right of individuals and groups to establish in full freedom their own political parties, and to allow parties and individuals wishing to participate in the electoral process access to the media on a nondiscriminatory basis;
Whereas the general trend of political development in Central Asia has been the emergence of presidents far more powerful than other branches of government, all of whom have refused to allow genuine electoral challenges, postponed or canceled elections, excluded serious rivals from participating in elections, or otherwise contrived to control the outcome of elections;
Whereas several leaders and governments in Central Asia have crushed nascent political parties, or refused to register opposition parties, and have imprisoned and used violence against, or exiled, opposition figures;
Whereas in recent weeks fighting has erupted between government troops of Kyrgyzstan and Uzbekistan and members of the Islamic Movement of Uzbekistan;
Whereas Central Asian governments have the right to defend themselves from internal and external threats posed by insurgents, radical religious groups, and other anti-democratic elements which employ violence as a means of political struggle;
Whereas the actions of the Central Asian governments have tended to exacerbate these internal and external threats by domestic repression, which has left few outlets for individuals and groups to vent grievances or otherwise participate legally in the political process;
Whereas in Kazakhstan, President Nursultan Nazarbaev dissolved parliament in 1993 and again in 1995, when he also annulled scheduled Presidential elections, and extended his tenure in office until 2000 by a deeply flawed referendum;
Whereas on January 10, 1999, President Nazarbaev was reelected in snap Presidential elections from which a leading challenger was excluded for having addressed an unregistered organization, `For Free Elections,' and the OSCE assessed the election as falling far short of international standards;
Whereas Kazakhstan's October 1999 parliamentary election, which featured widespread interference in the process by the authorities, fell short of OSCE standards, according to the OSCE's Office of Democratic Institutions and Human Rights (ODIHR);
Whereas Kazakhstan's parliament on June 22, 2000, approved draft legislation designed to give President Nazarbaev various powers and privileges for the rest of his life;
Whereas independent media in Kazakhstan, which used to be fairly free, have been pressured, co-opted, or crushed, leaving few outlets for the expression of independent or opposition views, thus limiting the press's ability to criticize or comment on the President's campaign to remain in office indefinitely or on high-level corruption;
Whereas the Government of Kazakhstan has initiated, under OSCE auspices, roundtable discussions with representatives of some opposition parties and public organizations designed to remedy the defects of electoral legislation and now should increase the input in those discussions from opposition parties and public organizations that favor a more comprehensive national dialogue;
Whereas opposition parties can function in Kyrgyzstan and parliament has in the past demonstrated some independence from President Askar Akaev and his government;
Whereas 3 opposition parties in Kyrgyzstan were excluded from fielding party lists and serious opposition candidates were not allowed to contest the second round of the February-March 2000 parliamentary election, or were prevented from winning their races by official interference, as cited by the OSCE's Office of Democratic Institutions and Human Rights (ODIHR);
Whereas a series of flagrantly politicized criminal cases after the election against opposition leaders and the recent exclusion on questionable linguistic grounds of other would-be candidates have raised grave concerns about the fairness of the election process and the prospects for holding a fair Presidential election on October 29, 2000;
Whereas independent and opposition-oriented media in Kyrgyzstan have faced serious constraints, including criminal lawsuits by government officials for alleged defamation;
Whereas in Tajikistan, a civil war in the early 1900s caused an estimated 50,000 people to perish, and a military stalemate forced President Imomaly Rakhmonov in 1997 to come to terms with Islamic and democratic opposition groups and agree to a coalition government;
Whereas free and fair elections and other democratic steps in Tajikistan offer the best hope of reconciling government and opposition forces, overcoming the legacy of the civil war, and establishing the basis for civil society;
Whereas President Rakhmonov was reelected in November 1999 with 96 percent of the vote in an election the OSCE did not observe because of the absence of conditions that would permit a fair contest; Whereas the first multiparty election in the history of Tajikistan was held in February-March 2000, with the participation of former warring parties, but the election fell short of OSCE commitments and 11 people, including a prominent candidate, were killed;
Whereas in Turkmenistan under the rule of President Saparmurat Niyazov, no internationally recognized human rights are observed, including freedom of speech, assembly, association, religion, and movement, and attempts to exercise these rights are brutally suppressed;
Whereas Turkmenistan has committed political dissidents to psychiatric institutions;
Whereas in Turkmenistan President Niyazov is the object of a cult of personality, all political opposition is banned, all media are tightly censored, and only one political party, the Democratic Party, headed by President Niyazov, has been registered;
Whereas the OSCE's Office of Democratic Institutions and Human Rights (ODIHR), citing the absence of conditions for a free and fair election, refused to send any representatives to the December 1999 parliamentary elections;
Whereas President Niyazov subsequently orchestrated a vote of the People's Council in December 1999 that essentially makes him President for life;
Whereas in Uzbekistan under President Islam Karimov, no opposition parties are registered, and only pro-government parties are represented in parliament;
Whereas in Uzbekistan all opposition political parties and leaders have been forced underground or into exile, all media are censored, and attempts to disseminate opposition newspapers can lead to jail terms;
Whereas Uzbekistan's authorities have laid the primary blame for explosions that took place in Tashkent in February 1999 on an opposition leader and have tried and convicted some of his relatives and others deemed his supporters in court proceedings that did not correspond to OSCE standards and in other trials closed to the public and the international community;
Whereas in Uzbekistan police and security forces routinely plant narcotics and other evidence on political opposition figures as well as religious activists, according to Uzbek and international human rights organizations;
and Whereas the OSCE's Office of Democratic Institutions and Human Rights (ODIHR), citing the absence of conditions for a free and fair election, sent no observers except a small group of experts to the December 1999 parliamentary election and refused any involvement in the January 2000 Presidential election:
Now, therefore, be it Resolved by the House of Representatives (the Senate concurring), That the Congress--
(1) expresses deep concern about the tendency of Central Asian leaders to seek to remain in power indefinitely and their willingness to manipulate constitutions, elections, and legislative and judicial systems, to do so;
(2) urges the President, the Secretary of State, the Secretary of Defense, and other United States officials to raise with Central Asian leaders, at every opportunity, the concern about serious violations of human rights, including noncompliance with Organization for Security and Cooperation in Europe (OSCE) commitments on democracy and rule of law;
(3) urges Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan to come into compliance with OSCE commitments on human rights, democracy, and the rule of law, specifically the holding of free and fair elections that do not exclude genuine challengers, to permit independent and opposition parties and candidates to participate on an equal basis with representation in election commissions at all levels, and to allow domestic nongovernmental and political party observers, as well as international observers;
(4) calls on Central Asian leaders to establish conditions for independent and opposition media to function without constraint, limitation, or fear of harassment, to repeal criminal laws which impose prison sentences for alleged defamation of the state or public officials, and to provide access to state media on an equal basis during election campaigns to independent and opposition parties and candidates;
(5) reminds the leaders of Central Asian states that elections cannot be free and fair unless all citizens can take part in the political process on an equal basis, without intimidation or fear of reprisal, and with confidence that their human rights and fundamental freedoms will be fully respected;
(6) calls on Central Asian governments that have begun roundtable discussions with opposition and independent forces to engage in a serious and comprehensive national dialogue, on an equal footing, on institutionalizing measures to hold free and fair elections, and urges those governments which have not launched such roundtables to do so;
(7) calls on the leaders of Turkmenistan and Uzbekistan to condemn and take effective steps to cease the systematic use of torture and other inhuman treatment by authorities against political opponents and others, to permit the registration of independent and opposition parties and candidates, and to register independent human rights monitoring organizations;
(8) urges the governments of Central Asia which are engaged in military campaigns against violent insurgents to observe international law regulating such actions, to keep civilians and other noncombatants from harm, and not to use such campaigns to justify further crackdowns on political opposition or violations of human rights commitments under OSCE;
(9) encourages the Administration to raise with the governments of other OSCE participating states the possible implications for OSCE participation of any participating state in the region that engages in clear, gross, and uncorrected violations of its OSCE commitments on human rights, democracy, and the rule of law;
and (10) urges the Voice of America and Radio Liberty to expand broadcasting to Central Asia, as needed, with a focus on assuring that the peoples of the region have access to unbiased news and programs that support respect for human rights and the establishment of democracy and the rule of law.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Nebraska (Mr. Bereuter) and the gentlewoman from California (Ms. Lee) each will control 20 minutes. The Chair recognizes the gentleman from Nebraska (Mr. Bereuter).
Mr. BEREUTER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this measure.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Nebraska? There was no objection.
Mr. BEREUTER. Mr. Speaker, I yield such time as he may consume to the gentleman from New Jersey (Mr. Smith), the author of this resolution with whom I have worked. I appreciate his great effort.
Mr. SMITH of New Jersey. Mr. Speaker, I thank the gentleman from Nebraska (Mr. Bereuter) for yielding me this time, and I want to thank him for his work in shepherding this resolution through his Subcommittee on Asia and the Pacific, and for all of those Members who have co-signed and cosponsored this resolution.
Mr. Speaker, this resolution expresses the sense of Congress that the state of democratization and human rights in the countries of Central Asia, Kazahkstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, is a source of very, very serious concern.
In 1992, these States freely pledged to observe the provisions of the 1975 Helsinki Final Act and subsequent OSCE documents. The provisions contained in the 1990 Copenhagen Document commit the participating states to foster democratization through, among other things, the holding of free and fair elections, to promote freedom of the media, and to observe the human rights of their citizens.
Mr. Speaker, 8 years have passed since then, but in much of Central Asia the commitments they promised to observe remain a dead letter. In fact, in some countries the situation has deteriorated substantially. For instance, opposition political activity was permitted in Uzbekistan in the late 1980s. An opposition leader even ran for president in the December 1991 election.
In mid-1992, however, President Karimov decided to ban any manifestation of dissidence. Since then, no opposition movements have been allowed to function openly and the state controls the society as tightly as during the Soviet era.
An even more disappointing example is Kyrgyzstan. Once one of the most democratic Central Asian states, Kyrgyzstan has gone the way of neighboring dictatorships. President Akaev has followed his regional counterparts in manipulating the legal, judicial, and law enforcement apparatus in a way to stay in office, despite domestic protest and international censure. On October 29, he will run for a third term; and he will win it, in a pseudo-election from which all serious candidates have been excluded.
Throughout the region, authoritarian leaders have contrived to remain in office by whatever means necessary and give every sign of intending to remain in office as long as they live. Indeed, Turkmenistan's President Niyazov has made himself President for Life last December, and Kazakhstan's President Nazarbaev, who has extended his tenure in office through referenda, canceling elections, and staging deeply flawed elections, this summer arranged to have lifelong privileges and perks go his way. It may sound bizarre, but it may not be out of the realm of possibility that some of these leaders who already head what are, for all intents and purposes, royal families, are planning to establish what can only be described as family dynasties.
Certainly the worst offender is Turkmenistan. Under the tyrannical misrule of Niyazov, President Niyazov, his country is the only one-party state in the entire OSCE region. Niyazov's cult of personality has reached such proportions that state media refer to him as a sort of divine being, while anyone who whispers a word of opposition or protest is dragged off to jail and tortured.
Corruption is also rampant in Central Asia. Rulers enrich themselves and their families and a favored few, while the rest of the population struggles to eke out a miserable existence and drifts towards desperation. We are, indeed, already witnessing the consequences. For the second consecutive year, armed insurgents of the Islamic Movement of Uzbekistan invaded Uzbekistan and Kyrgyzstan. While they have been less successful than last year in seizing territory, they will not go away. Impoverishment of the populace fills their ranks with people, threatening to create a chronic problem.
While the most radical groups in Central Asia might have sought to create theocracies regardless of the domestic policies pursued by Central Asian leaders, the latter's marriage of corruption and repression has created an explosive brew. Mr. Speaker, finally let me say the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan seem to believe that U.S. strategic interest in the region, and the fear of Islamic fundamentalism, will keep the West and Washington from pressing them too hard on human rights while they consolidate power. Let us show them that they are wrong. America's long-term and short-term interests lie with democracy, the rule of law, and respect for human rights. So I hope that my friends and colleagues on both sides of the aisle will join in backing this important resolution.
Mr. BEREUTER. Mr. Speaker, I reserve the balance of my time.
Ms. LEE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of this resolution. The post-Soviet independence of the Central Asian states has not panned out in the way that benefited the population of these countries. Instead, it created wealthy and often corrupt elites and impoverished the population. Although all of these newly-independent states have joined the OSCE and appear, at least on paper, to be committed to OSCE principles, in reality the leaders of these countries have consistently fallen back on their OSCE commitments.
The political development reinforced the Office of the President at the expense other branches of government. Parliaments are weak and the courts are not free. Presidents of some countries, such as Turkmenistan, have pushed laws through their rubber-stamp legislatures that extend their presidential powers for life. Other governments, like the government of Uzbekistan, have been using the justification of fighting terrorism and insurgency as a means to imprison and/or exile the opposition, censor the press, and control civic and religious activities.
On the other hand, some countries such as Kyrgyzstan and Kazakhstan have demonstrated varying degrees of progress. Until recently, opposition parties could function freely in Kyrgyzstan, while the OSCE agreed to Kazakhstan's 1999 parliamentary election, which they found falling short of international standards but, nevertheless, an improvement over the past. The stability of Central Asia is key to the stability of this region which borders on Afghanistan, Iran, China, and Pakistan. The governments of Central Asia cite the destabilizing influence of drugs and arms-trafficking from outside of their borders and the need to fight Islamic fundamentalism as justifications for their authoritarian regimes.