US Awaits Possible Russian Retaliation Over Magnitsky Act

US Awaits Possible Russian Retaliation Over Magnitsky Act
# 16 November 2012 04:44 (UTC +04:00)

Baku-APA. The White House has been less than enthusiastic about proposed legislation in the US Congress linking normalized trade relations with Russia to the so-called “Magnitsky Act,” a bill aimed at punishing Russian officials suspected of corruption, APA reports quoting Ria Novosti.

But with the combined bill expected to be passed by the US House of Representatives on Friday—and the US Senate expected to give its stamp of approval after that—President Barack Obama is expected to sign it into law anyway.

The question in Washington now is: What’s Russia going to do about it?

US officials, lawmakers and business lobbies are broadly united in their consensus that enacting permanent normalized trade relations (PNTR) with Russia will provide a boost for American exporters.

But the decision to link PNTR to the Magnitsky Act, named for a whistleblowing lawyer who died in a Moscow jail three years ago, has angered top Russian officials, who accuse the United States of meddling in their country’s internal affairs.

The Russian Foreign Ministry on Thursday vowed to “react toughly” to this “this unfriendly provocative act,” but it remains unclear exactly what this reaction will be and what impact it might have on bilateral ties.

The most “unfortunate outcome” would be a Russian response that “disrupts US-Russian economic relations,” said Cliff Kupchan, head of the Russia and CIS team at Eurasia Group, a political risk consultancy in New York City.

“If Russia responds with some proportionate blacklist of its own, my view is that the issue will be contained,” Kupchan said. “If Russia responds with an extremely expansive bill based on multiple criteria, it would negatively affect relations.”

The bill to go before the House of Representatives on Friday would deny visas to—and freeze the assets of—officials suspected of involvement in Magnitsky’s death and other alleged human rights abuses.

The Obama administration has maintained that the US government already has mechanisms in place to punish such individuals and has tried in vain to keep the Magnitsky bill separate from the PNTR issues.

Russia joined the World Trade Association (WTO) in August, and as a fellow WTO member, the United States must normalize trade relations with Russia in order to allow American businesses to fully capitalize on opportunities in the Russian market.

These advantages could be diminished by punitive bureaucratic measures targeting US companies doing business in Russia as a response to the Magnitsky Act, Carroll Colley, a Washington-based analyst for Eurasia Group, wrote in an essay published Thursday on the Foreign Policy website.

The measures could include “unannounced tax inspections of U.S. companies, delayed or denied licensing or registration procedures, and other bureaucratic complications,” Colley wrote.

Human rights have long been an issue in US relations with the Soviet Union and Russia, and it would be unrealistic for anyone to expect this to change anytime soon, James Collins, a former US ambassador to Russia under President Bill Clinton, told RIA Novosti.

“The real question is whether the two governments can find reasonably effective ways to manage both the places where we agree and where we disagree,” Collins said. “Or they don’t, and instead let this become a disruptive part of the relationship.”