Report

The Magnitsky Flip-Flop

The Obama administration was against Russia sanctions before it was for them.

In 2009, after the death of an imprisoned Russian lawyer, American hedge fund manager Bill Browder began pushing Congress to sanction Moscow for alleged human rights violations. Lawmakers from both parties quickly signed onto the legislation. But it faced strong opposition from an unexpected source: the Obama administration.

Today, the White House argues that sanctions are the only way of punishing Russia over Ukraine. Two years ago, by contrast, the administration tried to stop the Magnitsky Act -- named after the dead lawyer, Sergei Magnitsky -- in its tracks for fears that it would derail its efforts to "reset" relations with Moscow. The tortured history of the legislation underscores the administration's conflicting impulses when it comes to Russia and its ongoing struggle to decide if Russia is a rival asserting its power or an adversary actively seeking a confrontation with the West.

That debate has taken center stage in recent weeks because of Russia's invasion and annexation of Crimea and its role in stirring up unrest in eastern Ukraine. But this time the Obama administration is heralding the benefits of freezing the assets of people close to Russian President Vladimir Putin as a way of pressuring him to de-escalate the ongoing crisis in Ukraine. So far, the U.S. has sanctioned 45 people and 19 entities, including four banks.

But in 2010, when Maryland Democratic Sen. Ben Cardin introduced the bill that Browder championed, the Obama administration balked. Magnitsky, an auditor with law firm Firestone Duncan, had worked for Browder's firm, Hermitage Capital Management. He was imprisoned in 2008 after alleging that top Russian officials had effectively stolen $230 million from the government. Magnitsky died in prison in 2009 at age 37 after becoming ill and being denied medical care. Russian officials said he suffered a fatal heart attack, though they provided no evidence to support that contention.

Browder wanted the U.S. to go after the Russian officials responsible for Magnitsky's death, but his timing was terrible. The bill began gaining steam in 2011, just as the administration was focused on normalizing trade relations with Russia ahead of its scheduled entrance into the World Trade Organization the following year. Officials from the State Department, Treasury Department, and President Barack Obama's National Security Council fanned out across Capitol Hill to lobby against the bill and argue that the administration already had enough power to impose sanctions on Russia.

"The administration, starting with Hillary Clinton and then John Kerry, did everything they could do to stop the Magnitsky act," Browder said in an interview.

In early 2012, the Magnitsky Act got a surprising boost. The administration wanted to win congressional support for repealing the Jackson-Vanik Amendment, a Soviet-era law that denied Russia normal trade relations with the U.S. If the 1974 law remained on the books, U.S. companies who wanted to sell goods to Russia would face higher tariffs, putting them at a disadvantage to other international companies. Powerful lawmakers signaled they'd only support the repeal if the Magnitsky Act was signed into law. The two provisions were lumped together and approved by the House and the Senate in December 2012. Obama signed them into law almost immediately.

The administration added 18 names, mostly mid-level officials, to the Magnitsky list in April 2013, but supporters of the law want the administration to do more in light of Russia's actions not only at home, but also in Ukraine. Sens. Robert Menendez (D-N.J.), Bob Corker (R-Tenn.), Ben Cardin (D-Md.) and John McCain (R-Ariz.) sent a letter to the administration in January asking the State and Treasury departments to "clarify when we can expect additional names to be added to the Magnitsky list."

Under the law, congressional leaders can suggest names to the administration and it must respond within 120 days. The deadline for the administration to respond to the senators' January 17 letter is this Saturday. It is unclear whether the administration will add more names to the list or wait to see whether Russia tries to interfere with the Ukrainian elections on May 25, a move that U.S. and European officials have said would trigger further sanctions.

"While we can't speak to the timing of any additional designations, we continue to investigate potential targets, and the administration is determined to fully implement the Act by making further designations as appropriate," Laura Lucas Magnuson, a National Security Council spokeswoman, said in an email.

In some ways, the administration has already gone beyond the Magnitsky list with the current Ukraine sanctions. Obama has said that the U.S. is prepared to ban business with whole sectors of the Russian economy if Moscow continues to foment unrest in Ukraine. Still, advocates of the Magnitsky list say it's important because it condemns the Russian government's actions against its own people, not just those of neighboring countries.

"While the world is naturally focused on Ukraine, it's crucial to send the signal that the world has not forgotten about the human rights of Russians," said Vladimir Kara-Murza, a leading member of the People's Freedom Party, a Russian opposition group.

Others worry that adding more names to the list would bring swift and harsh retaliation. After the U.S. passed the law in 2012, Moscow responded by banning the adoption of Russian orphans by American citizens.

"This was a sign of how far the Russian government is willing to go to hurt it's own people to make a political point," said Jeff Goldstein, a senior policy analyst with the Open Society Foundations.

ANDREY SMIRNOV/ AFP/ GETTY

Report

China's Backdraft

As factories burn across Vietnam, Beijing's rivals are ganging up on the oil bully.

For China and Vietnam, it appears to be a nearly literal case of one if by sea, two if by land.

Chinese and Vietnamese naval vessels have been clashing with each other since Beijing sent an oil rig to waters claimed by both countries earlier this month, but the unrest has spread to land, with thousands of rioters in southern Vietnam trying to attack Chinese businesses and factories. Because some of the rioters also mistakenly attacked firms from Singapore, Malaysia, and Taiwan, the oil rig crisis has in less than two weeks sharply raised diplomatic tensions across Southeast Asia.

More broadly, aggressive Chinese efforts to assert control over flecks of land and stretches of water across the western Pacific are driving fundamental changes in the security attitude of countries in the region and giving new urgency to the U.S. military and diplomatic rebalancing toward Asia. On Tuesday, the Philippine government said that China has started construction work on Johnson South Reef, located in the disputed Spratly Islands that have sparked years of tensions between the two countries. Manila has already lodged a formal protest with Beijing.

Vietnamese officials said Wednesday nearly 20,000 rioters attacked and ransacked about 15 factories, mostly in the southern part of the country, believing that they were Chinese-owned, Reuters reported. About 400 rioters have been arrested. A spokesperson for the Chinese foreign ministry said China has "serious concerns" about the incidents, and asked Vietnam to safeguard Chinese life and property.

Taiwan also reacted to the violence, which targeted some of its firms operating in Vietnam, apparently by mistake. The Taiwanese foreign ministry said that it has activated plans to evacuate Taiwanese expatriates from Vietnam if need be. Singapore, some of whose businesses were also mistakenly targeted, also expressed outrage, summoning the Vietnamese ambassador and warning that investor confidence could be damaged by the episode.

The showdown over the oil rig has quickly become a matter of concern for the United States, and Washington and Beijing have waged a war of words over the past week. The United States said last week that Chinese actions were destabilizing the region, while Beijing said that the U.S. pivot to Asia is to blame for all the trouble, since it has emboldened countries such as the Philippines and Vietnam to take a tougher line with China.

On Monday, Secretary of State John Kerry described Chinese actions as "aggressive," and reportedly told Chinese Foreign Minister Wang Yi in a telephone call that the dispatch of the oil rig was "provocative."

But on Tuesday, Chinese foreign ministry spokespersons denied that Kerry ever used such language, telling Chinese media that the American message during the phone call was that the United States "does not take sides in the South China Sea dispute."

A State Department spokesman declined to comment on Chinese claims about Kerry's language during the call, but spokespeople earlier this week said he used "provocative." On Wednesday a department spokesperson said, "We are closely following the protests in Vietnam. There are no reports of U.S. citizens being targeted. We support the right of individuals to assemble peacefully to protest. We urge all parties to refrain from violence and exercise restraint."

The protests inside Vietnam come amid ongoing clashes between Vietnamese and Chinese naval vessels in the waters of the South China Sea, where ships from the two countries have been ramming and firing water cannons at each other; several Vietnamese coast guard ships, and at least one fishing ship, have been damaged by Chinese attacks. The skirmish has been raging since the Chinese sent out a massive deepwater rig to drill for oil not far from the Paracels, a group of islands that they claim to own but which are only about 120 nautical miles from the Vietnamese coast.

In recent days, Vietnamese officials said, China has dispatched more naval units to the waters around the oil rig, including a missile frigate. That's unusual: The Chinese navy has grown significantly in recent years, but its civilian coast guard forces have grown even more rapidly and, because they are unarmed, have the ability to enforce questionable maritime claims with less chance of accidentally setting off a violent confrontation. Vietnam, for instance, inked a deal with the United States in December to bolster its coast guard in part to protect sovereignty claims in the South China Sea.

China's determination to deter any Vietnamese efforts to disrupt drilling is made even clearer by the rapid growth of the exclusion zone around the rig, which is the buffer zone protecting the expensive rigs from other ships in the area. The exclusion zone around China's billion-dollar rig has grown to 10 nautical miles from 1 mile when it was first dispatched. That is unusually large for offshore oil and gas operations, even for the crowded South China Sea.

The steps that China has taken in recent months to expand its physical claims to disputed rocks, reefs, islets, and waters ranging from Vietnam to parts of southern Japan have prompted some far-reaching changes in key Asian countries.

The Philippines, for example, has reversed much of the animus toward a U.S. military presence on the islands that culminated more than 20 years ago with the closure of a historic naval base and airfield that had long been an advanced outpost of U.S. military might in the Pacific. On President Barack Obama's recent trip to Asia, the two countries signed defense agreements that would see U.S. forces, including navy ships, return to the Philippines in greater numbers. Closer defense ties make even more sense in light of reports that China may be building an airstrip on one of the disputed islands in the Spratlys.

More striking is the evolution being taken by leaders inside Japan, whose post-World War II constitution enshrined pacifism and forbid the use of its combat forces for any task other than defense of the home islands. Japan's aversion to military force was such that for decades the Japanese navy, known as the Maritime Self-Defense Force, could not build fully flat decks on helicopter-carrying destroyers, because flat tops were too reminiscent of WWII-era aircraft carriers used to attack Pearl Harbor.

Yet on Thursday, advisors to Prime Minister Shinzo Abe will present a new study "urging a loosening of legal limits on Japan's military," Reuters reported. Such a move would open the door to Japanese forces being able to do more than just defend the home islands. If put into place, it would also allow Japan to help defend regional allies facing threats from China.

VNExpress - AFP - Getty