On December 20, 2017, President Trump issued Executive Order 13818 (the “E.O.”) implementing provisions of the Global Magnitsky Human Rights Accountability Act (“Global Magnitsky Act”) (enacted into law in December 2016), which provided for sanctions relating to gross human rights violations or government officials linked to corruption. The E.O. authorizes the imposition of sanctions on non-U.S. persons determined to be responsible for, complicit in, or have engaged in (directly or indirectly) “serious human rights abuse,” corruption, or “the transfer or the facilitation of the transfer of the proceeds of corruption,” or to have attempted to engage in or materially support such acts.
The E.O. applied sanctions designations to 13 persons and, separately, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) imposed sanctions on 39 additional individuals and entities around the world. This includes individuals and entities from 13 countries and territories spanning the continents of Asia, Africa, Europe, and North America.
The E.O. and Global Magnitsky Act are independent from the similarly named Sergei Magnitsky Rule of Law Accountability Act of 2012, which authorized sanctions for individuals determined to have engaged in gross human rights violations in the Russian Federation or in connection with the detention and death of Russian lawyer, Sergei Magnitsky. It also is separate from the recent Countering America’s Adversaries through Sanctions Act (“CAATSA”), which also provides for certain sanctions relating to human rights violations or acts of corruption.
Key takeaways from the E.O. and the recent sanctions designations include:
- The E.O. marks the first time the United States has launched a sanctions program that targets human rights abusers or corrupt actors on a global basis. Previous sanctions programs have targeted specified countries, non-state groups or categories of activities.
- The U.S. is now able to impose sanctions without the need to undertake the process of implementing a country-specific program. For example, the E.O. was used to address human rights abuses against Rohingya civilians in Myanmar’s Rakhine State, designating the former chief of the Burmese Army’s Western command, Maung Soe. This avoided the delicate issue of imposing a new sanctions regime for Myanmar. Moving forward, U.S. Presidents will be able to impose sanctions on persons engaged in human rights or corruption-related conduct more expeditiously and to sidestep the political debates and diplomatic appeals that can arise in connection with imposing country-specific sanctions.
- Companies and investors from Western nations and U.S. allies can be targeted under the E.O. The sanctions designations included Dan Gertler, a businessman from U.S. ally Israeli, for corrupt actions in connection with mining and oil deals in the Democratic Republic of Congo.
- The E.O. provides an anti-corruption tool that covers activity beyond the scope of the U.S. Foreign Corrupt Practices Act (“FCPA”). The E.O. does not require corrupt activity to have a nexus to U.S. jurisdiction and authorizes the imposition of sanctions on government officials that are responsible for, complicit in, or have engaged in or been the recipient of bribery. The FCPA generally applies to persons that engage in corrupt activity, but not the government official that receives the bribe (although such officials sometimes can be prosecuted under the FCPA as part of the bribery conspiracy).
The E.O. and accompanying designations demonstrate the reach of the Global Magnitsky Act, and will bear watching in 2018.