The absolute power of Australia’s new “Magnitsky Act”

Before anyone can be punished for a serious crime under Australian law, proof of guilt must generally be established by a court. That changed last year. On December 2, 2021, Foreign Secretary Marise Payne announced that Parliament had expanded its powers to make rulings against foreign individuals and entities suspected of being complicit in malicious cyber activities, serious human rights violations and serious cases of corruption.

As minister, Payne can punish any suspected offender without going to court. She can impose targeted financial sanctions and travel bans and enforce exclusions from financial services by “recording” them on a register maintained by her department.

The new legislation, called the Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021, replaces a more limited 2011 law whose title did not mention Magnitsky. The new law was well received by all political parties and the media. “Magnitsky” refers to the Magnitsky Act introduced in the United States in 2012 after a long campaign by American hedge fund manager Bill Browder, who claims that one of his Moscow employees, Sergei Magnitsky, was unjustly imprisoned and murdered by the Russian font.

The US law was limited to Russians and allowed the government to freeze assets and prevent Russian officials from entering the country. In 2016, the United States passed a new law, the Global Magnitsky Human Rights Accountability Act, which applies to corruption as well as human rights violations, but not to malicious cyberattacks. This does not apply to the numerous human rights violations committed by the United States around the world, nor to the acts of corruption committed by American companies. The US Treasury Secretary imposes the sanctions in consultation with the Secretary of State and the Attorney General, as well as the chairs of several congressional committees.

Britain, Canada, Estonia, Gibraltar, Jersey, Kosovo, Lithuania, and Latvia have passed Magnitsky-style laws without his name appearing in the title. In 2020, the European Union passed the European Magnitsky Act, which has global application. In general terms, these other versions operate in the same way as the Australian law, except that they do not include malicious cyberattacks in the criminal behavior covered.

Australian parliamentarians pushed strongly for the introduction of a law with Magnitsky in the title, after being swayed by US actions and Browder’s lobbying.

Australia Institute international and security analyst Allan Behm fears that “the identification of Magnitsky in the title of the Act gives quasi-legislative legitimacy to Magnitsky himself, whose provenance and relationship to senior Russian officials were ambiguous to say the least”.

Behm wonders why we are getting into a case involving Russian officials when “crooks of all kinds exist all over the world.”

The Saturday newspaper asked the Foreign Office how it is possible to know the source of a malicious cyberattack, noting that WikiLeaks released an extensive collection of CIA documents in 2017 revealing that it can give the impression that a hack came from from a particular source when the CIA is the real perpetrator. A ministry spokesperson did not address this issue.

The spokesperson said that before listing, the minister must be “satisfied that a person or entity was complicit in a significant cyber incident”. Whether this criterion is met will depend on the circumstances and all available evidence. A suspect cannot present any evidence to the Minister of Foreign Affairs before being sanctioned. In cyber affairs, the minister will mainly rely on secret information, provided by government agencies.

In recent years, the mainstream media has increasingly relied on information that is later revealed to be false. An American journalist, Glenn Greenwald, among others, reported many examples. In 2020, the Parliamentary Joint Committee on Foreign Affairs, Defense and Trade recommended that an independent body advise the Foreign Secretary on who should be sanctioned. The Morrison government rejected this proposal because sanctions are a “foreign policy tool” that the government can use flexibly.

The government has agreed to allow anyone on the list to subsequently apply to the Minister – the same person who listed them – to have the listing revoked or to seek a judicial review of their listing.

Anton Moiseienko, professor of law at the Australian National University, points out that the Joint Parliamentary Committee on Human Rights noted that “the extraordinary power of discretion makes judicial review ineffective because there is no standard for measure the decision of the government”. Tass Liveris, the chairman of the Law Council of Australia, said the council had serious reservations about extending the 2011 stand-alone sanctions regime to cover Magnitsky-style laws which “lack the important safeguards necessary to ensure that penalties are reasonable, necessary and proportionate”.

Minister Payne says the targeted nature of the new law is better than previous nationwide sanctions. But Australia has a poor record on corruption and human rights. The Morrison government refuses to establish a federal commission on corruption. He conducted a secret trial against Bernard Collaery, who objected to the misuse of Australian secret intelligence services in East Timor.

Speculating who is the source of a cyberattack has a strong pull on the Australian media. In February 2019, the ABC reported that there was a possible “China connection” in a brief cyberattack on the Australian parliament’s computer system. Unlike the highly secure and top secret communication systems used by ministers and their staff, almost nothing of importance goes beyond the ordinary computer system of Parliament. But that didn’t stop the ABC from reporting a cybersecurity expert from the University of Canberra saying that if a nation state was “looking for state secrets”, Parliament was where the “gems” were. of the crown”.

When the Australian Bureau of Statistics’ census website crashed on August 9, 2016, the ABC repeatedly reported that the crash was due to a foreign “denial of service” cyberattack, despite reliable reports according to which no attack had taken place. Director of the Australian Strategic Policy Institute, Peter Jennings, told the ABC 7:30 a.m. program for which the Chinese government was most likely responsible. The following day, then-Prime Minister Malcolm Turnbull said the crash was due to the ABS computer storage failure.

When considering the new laws in 2021, Australian media failed to note that respected overseas publications and courts had serious doubts about some of Bill Browder’s claims about his employee, Sergei Magnitsky, who died in prison in Russia on November 16, 2009. For example, in an article titled “Questions about the cloud story behind US sanctions” in the German weekly The Spiegel, Benjamin Bidder declares that Magnitsky was the victim of a terrible injustice in the “sadistic and ruthless Russian prison system”. But there was more than that.

The Spiegel reported that Browder and a partner set up a company in the mid-1990s called Hermitage Capital Management to make financial investments in Russia while state companies were sold off at bargain prices. Many Russian oligarchs have become billionaires. The Spiegel said, “By its own calculations, Hermitage Capital Management generated a 1500% return on investment in just a few years… Somehow, Browder’s business model was lucrative. Hermitage bought cheap shares in Russian state companies such as Gazprom starting in the late 1990s. Hermitage held many shares through front companies. In 1998, Gazprom was worth $3.5 billion. In seven years, that figure had risen to $160 billion.

The Spiegel says that according to Russian investigators, a company in Browder’s fund structure had underpaid its taxes. Browder denies it. The magazine says investigators came across Magnitsky, who was helping Browder with his tax-saving designs. Browder later claimed that Magnitsky learned of a $230 million tax evasion run by two Moscow police officers and other officials who allegedly demanded payment of $230 million in taxes that Browder’s company had. previously paid.

The Spiegel says Browder accused one of the police investigators, Pavel Karpov, of working with another to have Magnitsky arrested and killed. Karpov filed a libel suit against Browder in London which the UK High Court heard in 2013. The court ruled that Britain had no jurisdiction over the matter. In his written conclusion, Judge Peregrine Simon said Browder did not come close to “advocating facts which, if proven, would come close to justifying the sting of libel”. The judge also said that Karpov had been granted “a measure of vindication of the views I expressed” – that Browder was “unable to substantiate the allegations that Karpov caused or participated in the torture and death of Magnitsky”.

After the Australian law was passed, the ABC speculated that it could be used to punish some “cronies” of Russian President Vladimir Putin. This seems unlikely, as few have assets to freeze here. The reality is that the United States will do most of the sanctions against Russia, perhaps in conjunction with Britain, where some Russian billionaires have assets. The Australian law is likely to target mainly China but not India.

This article first appeared in the print edition of The Saturday Paper on January 22, 2022 under the headline “Bad Reaction”.

A free press is a paid press. In the short term, the economic fallout from the coronavirus has taken about a third of our income. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.

About Leni Loberns

Check Also

Nov 15 live updates: Two killed in Poland near Ukrainian border, zero-Covid curbs Chinese retail sales

Citing the FTX implosion, U.S. lawmakers on Tuesday expressed concern about the risks posed to …