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“If we really want to bankrupt him, we need to stop buying Russian oil”: Bill Browder on the importance of sanctioning in defunding Putin’s war machine

31 May 2022

“Since the war broke out everyone is invested in what I have to say. But I have accepted this invitation from the NHC; because Helsinki committees have been integral in bringing forth the Magnitsky Act. Hence I moved mountains to be here.”

With those words, Bill Browder opened the event on the evening of 12 May 2022, in the Nutshuis in The Hague. In a lively discussion moderated by NHC’s Executive Director Kirsten Meijer, we reflected on the history of the Magnitsky act in the US and the EU, and debated the best course of action for the EU and the Netherlands to stop Putin’s war machine.

In the words of Kirsten Meijer:

“When we talk about impunity is very important to look in the mirror. It is clear that The Netherlands and the EU we have been assets for Russia and we are contributing to financing human rights violations and war crimes.”

The road to the Magnitsky act

Following this introduction, Browder reflected on the course of events that led him to become one of the world’s foremost anti-corruption activists. Browder is the founder and CEO of Hermitage Capital Management, and leader of Global Magnitsky Justice Campaign. Hermitage Capital Management was the largest foreign investor in Russia until 2005, when Browder was denied entry to the country and declared “a threat to national security” for exposing corruption in Russian state-owned companies.

“We thought that Putin was a nationalist and that he would not have allowed money from his government to be stolen. We were sure that if they knew what was happening then the good guys would get involved and that was that. We were wrong.”

In 2008, Mr. Browder’s lawyer, Sergei Magnitsky, uncovered a massive fraud committed by Russian government officials that involved the theft of US $230 million of state taxes. Sergei testified against state officials involved in this fraud, and was subsequently arrested, imprisoned without trial and systematically tortured. He spent a year in prison under horrific detention conditions, was repeatedly denied medical treatment, and was killed in prison on November 16, 2009, leaving behind a wife and two children.

“They put him in cell with no heat and no window panes in December in Moscow. The objective was to get him to sign a false confession that he had stolen the 200 million dollars on my instructions. He refused. And in retaliation they started to torture him more. He lost 20 kilos and was diagnosed with a pancreatic disease, which needed an urgent operation. Days before the operation he was asked to sign the false confession. He refused. He was moved to Butyrka, the worse prison in Russia, and his health continued to deteriorate. When his condition became critical, he was asked again to sign the false confession, he refused. The Butyrka people did not want to have the responsibility for that so they moved him to isolation and was beaten to death.”

Since then, Mr. Browder has been leading the Global Magnitsky Justice Campaign, which seeks to impose targeted visa bans and the freezing of assets of corrupt officials. Bill Browder just published a new book “Freezing Order: A True Story of Russian Money Laundering, State-Sponsored Murder, and Surviving Vladimir Putin’s Wrath.”

“For the last 12 and a half year I have been seeking justice. I thought that there was a chance to get justice in Russia. They put Magnitsky on trial 3 years after he was dead. There we realized that there was no chance to get justice inside of Russia. How do we get justice outside of Russia? The people that killed Magnitsky did it for money, they put their money in Swiss bank accounts and bought property in the south of France. The idea for stopping them was to prevent them from using the West for their money laundering.”

The idea for the Magnitsky act was born: “After that they told me, you found the Achilles heels of the Putin regime. They commit crimes for money in Russia and keep the money in the west.”

After being passed in the US in 2012, Browder continued to lobby for the Magnitsky act in Europe and beyond:

“When the Act passed, Putin went out if his mind. He banned the adoption of Russian children by US parents in retaliation. If one dictator hates that so much, let’s let other dictators hate it. That how the Global Magnitsky act happened”

On the EU and the Netherlands

Europe was much slower to the bat, only adopting a version of the Magnitsky Act at the end of 2020, unfortunately without using Magnitsky’s name, and without making provisions for targeting corruption.

When reflecting on the role the Netherlands has played in getting the Magnitsky Act passed in Europe, Browder had the following to say:

“The Netherlands is a funny place, a frustrating place and one that has been important for our success. It one of the first countries where I got support for the Magnitsky act. Yet it was one of the most frustrating places to get the resolution passed. The bucket kept getting passed on between the EU and the member states, and I had a strong feeling no member state wanted to upset the Russians – certainly not on their own. Even when it eventually passed, the Dutch introduction of the EU Magnitsky act was halfhearted.”

On the anti-corruption task force in the Netherlands

The conversation with the panel and the audience then shifted to a discussion of current anti-corruption efforts in the Netherlands, with an eye towards stopping Putin’s war machine at its source. Kirsten Meijer reflected on the “rather bleak numbers in the Netherlands” with only around 600 million euro in Russian financial assets being seized in the country by the end of April.

Browder was surprised by these low numbers, referring to the Netherlands as a “major offshore centre”, where up to now oligarchs have been largely free to set up tax free havens. In comparison, over 7 billion US dollars have been captured in Russian assets on the Cayman Islands since the war in Ukraine broke out, leading Browder to question the validity of the low Dutch numbers.

“There is something rotten here [in the Netherlands] when it comes to Russia and what is rotten is that business interest has effected policy. There has been a culture in this country of not wanting to rock the boat.”

The conversation then continued on the topic of sanctioning, as both an effective and workable tool in stopping Putin’s war effort.

Are sanctions a workable tool?

In answer to this question, Browder had the following to say.

“It is like medicine, it is about at what course of the disease you put the medicine. If we had put sanctions after [Putin’s] invasion of Georgia or his annexation Crimea he would have seen that we have the capacity to harm him, but we did not. He would have changed his calculations … Sanctions work for punishment or for deterrence; we can [no longer] deter him. We can starve him. We hit his savings in shore and offshore. But the other story is income, what do we do about that? Right now we give him every day a billion dollars and he spends them on killing Ukrainians… If we really want to bankrupt him, we need to stop buying Russian oil.”

However, there was also hope to be heard, as society seems united in a cause. Meijer noted that “there is a momentum and unity in Europe” while Browder confirmed that while “there’s a lot of people that want to get back to business as usual, society does not.”

Interventions from the panel and the audience

Sangeeta Goswami from the Human Security Collective wondered whether Browder saw any behavioral change in terms of accountability for human rights violations, when it comes to sanctioning as an effective tool. Browder answered:

“Are sanctions effective? How mad did Putin get when the Magnitsky Act passed? How much effort did he put to chase me? I can guarantee that is effective and it is based in a simple principle, should we punish someone for doing something bad?”

Human rights lawyer and defender Sergei Golubok reflected on and applauded Browder’s willingness to name names of politicians who have both helped and thwarted the process of getting the Magnitsky act passed:

“You need to name the names. Structures and organizations do not exist only people exist. Don’t pretend that a person with a different position becomes a different person. Name names and remember names”

Finally, following an intervention from the public on the question on how one stays hopeful after so long, Browder had the following to say.

“I don’t get depressed by any of these things. I kind of like a good fight. Why have we been effective? We want it more than the people who do not want it. We outlast them. Part of it is because I do not look at the end result as the goals, but also the process.”

As Meijer summed up: “We need to stick together. Let’s continue the fight.”