The name of a Russian tax auditor can now strike fear into the hearts of murderers, kleptocrats and human rights abusers all over the world. Sergei Magnitsky died in a Russian prison cell when he was just 37 after uncovering a $230 million tax fraud – perpetrated by officials in his own government. Some of those involved in his death were given awards and honours.

Today a growing list of nations are adopting laws in his name to make those guilty of human rights abuses and corruption overseas pay – even if they, as with Magnitsky’s persecutors, never face justice in their home countries.

Among those regularly featured on sanctions lists are the assassins who lured Saudi journalist Jamal Khashoggi to a consulate to kill him, the generals of Myanmar who ordered genocide and, of course, the people who locked up and tortured Magnitsky.

As Australia and the European Union move to follow countries such as the United States in adopting their own Magnitsky Act, the spotlight is falling on officials in China involved in everything from the crackdown on protesters in Hong Kong to the detention of more than 1 million Uighur Muslims in “re-education” camps.

The man behind the global Magnitsky push, US financier Bill Browder, says the beauty of the penalties is that they target individual wrongdoers rather than putting whole nations under punishing economic sanctions. But, with Australian and Chinese relations at a historic low point, he says “the diplomacy can still get messy”.

And the path to bring the laws to the world in the name of Browder’s lawyer, Magnitsky, has itself been paved with danger. Five people including Magnitsky have met suspicious ends. Browder has been the target of kidnapping plots and death threats and the subject of back-room Russian lobbying – from a mooted “swap” deal considered by Donald Trump and Vladimir Putin to a now-infamous visit by Russian lawyer Natalia Veselnitskaya to Trump Tower.

The Russian embassy was still reviewing the proposed Australian sanctions as they were presented to Parliament on December 7, but a spokesman said any laws modelled on those overseas would be illegal, “absolutely futile” and very harmful to international relations. “So far, Russia has always reacted appropriately to any unfriendly acts,” he said when asked if the Kremlin planned to respond.

So what exactly are Magnitsky sanctions and how are other countries using them? What is being proposed in Australia? And who might be on the list?

Where did the Magnitsky laws come from?

It was 2007 and Browder needed a Russian lawyer fast. He had once been the biggest foreign investor in Russia. But that was before he was deported by authorities for calling out corruption. Now, 18 months on, the old office of his company Hermitage Capital was being raided by Moscow police.

“I found a young guy called Sergei Magnitsky, one of the smartest lawyers [and auditors] in the city, to figure out what was going on,” Browder says.

The Russian officials, Magnitsky found, had failed in their apparent attempt to steal Hermitage funds. The accounts were already empty. But on Browder’s way out, his firm paid $230 million in tax to the Russian government. Officials used company documents and seals seized in the raid to fraudulently re-register Hermitage in the name of a local criminal. They then claimed the $230 million tax was paid in error and should be refunded in full, which it was (to them and key members of Russian organised crime) the very next day in the biggest tax refund in Russia’s history, Browder says.

“They weren’t stealing from us, they were stealing from their own government,” he says.

So Browder and Magnitsky filed criminal complaints, expecting “the good guys would catch the bad guys”. Instead, Magnitsky was arrested by the same authorities he’d testified against and thrown into pre-trial detention for 358 days.

Cut off from his family but refusing to recant his testimony, Magnitsky became seriously unwell. He was denied medical care and, in November 2009, he was beaten in a cell by prison guards and died.

“He had a wife and two children,” Browder says. “I was just heartbroken. If he hadn’t worked for me, he wouldn’t have died.”

When attempts by Magnitsky’s family to push the case through Russian courts failed, Browder tracked the stolen $230 million to the West – in investments, mansions and other laundered funds – and asked US lawmakers to target the people who had benefited from the raid. In 2012 they passed the world’s first Magnitsky Act to penalise people who had been involved in or profited from the lawyer’s death – from bureaucrats and prison guards to Russia’s top prosecutor (and Putin ally) Alexander Bastrykin. In 2016 the US law was expanded. Anyone who has committed human rights abuses and gross corruption anywhere in the world can now find themselves on the list.

How do Magnitsky sanctions work?

Economic penalties have long been a feature of international diplomacy, but when nations apply such sanctions against regimes and governments, say by restricting trade or charging tariffs, it is often their people who feel the pain. Instead, Magnitsky laws seek to target the fallout to the guilty parties by freezing individual bank accounts, seizing property and cancelling visas. They are designed to punish gross human rights abuses and often corruption too where the local rule of law has failed.

In practice, Browder explains, the sanctions render anyone on the list a financial persona non grata. “Banks around the world monitor these sanctions lists and they’ll stop doing business with them,” he says. “There are penalties if they do, and they’re scared of being shut down by the regulators.”

Hong Kong leader Carrie Lam was sanctioned by the US earlier in 2020 for supporting China’s restrictive national security laws on the island, and has since revealed she must now be paid her salary in cash because she can no longer access a bank account. “I have piles of cash at home,” she said.

Experts say such penalties do more than just disrupt the wealth structures of wrongdoers. They also cast a chill over those considering joining in – sometimes called the “Magnitsky effect”. Prison guards in Russia have spoken of not wanting to be “Magnitskied”; in the Philippines, the violent regime of President Rodrigo Duterte went into panic mode when the sanctions passed parliaments.

Speaking to an Australian inquiry in support of proposed Magnitsky laws, human rights barrister Amal Clooney cited the case of president Mohamed Nasheed of the Maldives, who was imprisoned on bogus charges but released (and eventually won office) following the threat of Magnitsky sanctions.

“It’s creating a new culture all around the world,” Browder argues. “A general in Belarus might think twice when they’re given orders to commit atrocities. And it will only get stronger the more countries use these sanctions [on wrongdoers].

“People say that there is no justice, I get that, but there can be. This is a way to get a little. It’s not enough but it’s something.”

Russia maintains, meanwhile, that the sanctions amount to interference in their justice system, and fail in their goals of deterrence. A spokesman at Russia’s embassy in Australia said the Magnitsky concept was based on “a flawed presumption that certain nations possess an inherent exclusive right to lecture, judge and punish others on human rights”.

“There are no such things as ‘shining cities on the hill’," he said. "Exercising a bit more humility and self-criticism might be a good idea.”

What countries have Magnitsky laws?

The story of Magnitsky has since inspired a raft of laws overseas (and even a musical co-created by British actor Johnny Flynn). After the US, Canada followed with near-identical laws. But the UK, when introducing its own version this year, narrowed its focus to human rights abuses rather than sanctioning gross corruption too. Some countries, such as Latvia, passed laws to target only Magnitsky’s particular persecutors. Others, such as Ireland, backed down after threats from Russia to unleash retaliatory legislation.

The European Union has just passed its own global Magnitsky laws,, but it is considered fairly weak, again targeting just human rights instead of corruption as well. And Magnitsky’s name has been taken off – in deference to Russia.

The poisoning of Putin critic Alexei Navalny with a nerve agent in August helped galvanise a reluctant European Parliament, Browder says, just as the Sergei Skripal poisoning in 2018 helped accelerate UK legislation.

While some experts hold doubts about how effectively the sanctions will be applied, Browder says it’s still a big win in a part of the world particularly popular with kleptocrats – officials who have stolen their country’s resources – burying dirty money into villas and mansions.

“The EU has been the toughest nut to crack but [once it] signs up, we go from seven countries with Magnitsky acts to 34.”

Navalny, now recovered from the attack, has told European leaders to follow the money and target Putin's personal circle of oligarchs rather than the Russian secret police who poisoned him.

Japan is also considering introducing Magnitsky sanctions, with a particular view to hitting those involved in civil liberty violations in Hong Kong.

What type of Magnitsky law is Australia considering?

On December 7, after months of deliberation, a bipartisan parliamentary inquiry recommended Australia adopt its own stand-alone Magnitsky Act. Going further than UK and EU lawmakers, it recommends banning travel and freezing assets of foreign individuals and corporations who commit serious human rights abuses and corruption, as well as immediate members of their family benefiting from such crimes.

Attached to the inquiry’s report is draft legislation developed by human rights lawyer Geoffrey Robertson as an example of the kind of tough “world-leading” bill the government could enact. Action intended to limit press freedom should also be considered a human rights abuse or “Magnitsky conduct” under the new act.

The Morrison government is expected to adopt the proposal into legislation in the new year, although senior sources stress it will consider the report in full first.

Amal Clooney told the inquiry that such sanctions would have a particularly powerful effect in Australia, given our position of influence in the Asia-Pacific. “You may not be able to solve every problem in the world or respond to every abuse but you can make sure that your country is not a safe haven for despots and war criminals,” she said.

While Australia may seem well beyond the reach of Russian kleptocrats and gangsters, Browder and his team have tracked about $3.5 million of the original $230 million tax fraud uncovered by Magnitsky to Australian bank accounts.

“We don’t know what the money was being used for,” Browder says. “But the trail led all the way here.”

An Australian Federal Police spokesman confirmed officers looked into the money transfers following a report, but the matter had since been finalised and no charges laid.

Inquiry chairman Kevin Andrews said the parliamentary probe had also heard stories of kleptocrats and human rights abusers using our banks, private schools and universities, as well as tales of Australians threatened by wrongdoers overseas. ”This is unacceptable,” he said.

Don't we already have laws to sanction 'baddies'?

Not like this. As a member of the United Nations Security Council, Australia imposes sanctions on nations when the member countries agree. It also has its own sanctions regime through the Department of Foreign Affairs and Trade (DFAT), which can be applied to individuals but under very narrow conditions that depend on which country they're from. Only those from Syria and Zimbabwe, for example, can be sanctioned under human rights considerations and no one’s assets have ever been frozen.

DFAT argued it would be better to beef up these existing sanctions than bring in an external mechanism. But the inquiry agreed with testimony from human rights groups and law experts that this would leave too much discretion for the foreign minister.

Besides, Browder adds, the department has an inherent conflict. “Its job is to keep diplomatic relations smooth, it doesn’t want to rock the boat by sanctioning top officials overseas.

“We’ve seen this in every country [where] Magnitsky comes up – in the US, in Canada, the bureaucrats all argue they can do it with the existing laws. They can’t. They don’t freeze assets and they don’t publicly name the people whose visas they cancel.”

Labor senator Kimberley Kitching, who has been arguing for Magnitsky-style laws for years and sits on the Australian committee, says pushback from the department was unsurprising. “Publicly calling out corrupt officials and human rights abusers … does make the job of a diplomat harder, but that doesn’t mean it’s not the right thing to do.”

To avoid politicising the process, the inquiry recommends establishing an independent oversight committee, made up of experts in the field, to put forward names for sanctions – people on this watch list will get a right of reply and of review. While the foreign minister will still make the final decision under this model, if the government does not impose the committee’s recommended sanctions, it would have to give a reason why.

“If you don’t use it or you only use it on countries where it’s easier [diplomatically], this is all for nothing,” Browder says. “It’s just show.”

Who might be sanctioned?

Hundreds of people and organisations around the world have now been hit with Magnitsky sanctions, but Australia has yet to reveal who is top of its list should the laws pass. If you look past the usual suspects, from those Russian officials who targeted Magnitsky to the Zimbabwean ruling family, the Mugabes, some grim cases emerge: a Pakistani surgeon accused of trafficking human organs; government bureaus in North Korea running secret prison camps; Cambodian tycoons illegally destroying forests as well as the livelihoods of locals; and the socialite and pop-star daughter of a former dictator in Uzbekistan believed to be running a powerful crime syndicate and extortion racket.

More recently, Belarusian autocrat Alexander Lukashenko, accused of rigging his country’s elections and then ordering violent crackdowns on protesters to hold onto power, has been slapped with Magnitsky sanctions by Canada and the UK.

In Australia in 2018, then Labor MP Michael Danby introduced a bill proposing Magnitsky-style sanctions, with an eye to targeting the Russians involved in the downing of the MH17 plane. (The legislation was never voted on, and lapsed when Parliament was dissolved that year ahead of the election.)

But Chinese officials have so far not featured prominently on Magnitsky lists around the world – a testament, Browder says, to the superpower’s influence on the global stage. “But that’s changing, China’s been pushing its luck.”

In the wake of violent crackdowns on protesters in Hong Kong, mounting evidence about its Uighur detention camps and an early cover-up of the COVID-19 outbreak, China is increasingly on the receiving end of less-diplomatic language.

The US has since gone further than even its Magnitsky legislation – passing another act that directly punishes those involved in detaining more than 1 million Uighur Muslims in internment camps. And in Canada a group of MPs is calling on Prime Minister Justin Trudeau to sanction Chinese officials involved not only in the camps but in Hong Kong police brutality and the imprisonment of Canadians Michael Spavor and Michael Kovrig in China. Trudeau has so far been reluctant to publicly criticise Beijing while the two men still face spying charges.

Australia currently has two high-profile citizens, the writer Yang Hengjun and journalist Cheng Lei, in Chinese prisons and a growing trade war with the superpower to negotiate.

Browder notes sanctioning an African warlord will cause much less political fallout than blacklisting a top-ranking Chinese official, but says Australia would not have to apply Magnitsky penalties against China alone. Its safest option would be to invoke them as part of a co-ordinated push with its Five Eyes allies the US, Canada and the UK.

“And China has a huge Achilles heel too, a huge export economy. It would harm China if the West stops trading with them. They are still vulnerable.”

So what happens to the money frozen by sanctions? Browder says it’s unclear – probably “it just sits there into perpetuity”. There is a proposal in Canada to allow funds to go to victims of the crimes that called down the sanctions, but that is not yet law.

What has been the diplomatic fallout?

Since Magnitsky laws began to pass through parliaments around the world, Russia has run an intense lobbying campaign to see them repealed. Natalia Veselnitskaya, the Russian lawyer who famously offered Trump’s campaign dirt on his presidential rival Hillary Clinton in 2016, was angling to have Magnitsky laws squashed in return or, at the very least, the names of key Russian oligarchs and officials taken off the list.

When the laws first passed in the US, Russia banned US couples adopting Russian children – a policy that has proven devastating to many of its own impoverished and unwell orphans and led to protests across the country. Floating the adoption retaliation during his end-of-year address in 2012, Putin lashed the Magnitsky sanctions. “Do you think this is normal? How can it be normal when you are humiliated? Do you like it? Are you a masochist? They shouldn’t humiliate our country.”

Russia threatened the same ban on Ireland days before its parliament was due to vote on Magnitsky sanctions – and the vote was called off.

Everywhere Magnitsky laws are considered, Browder says, Russian lobbying and misinformation follows. In the US, one pro-Russian congressman tried (and failed) to take Magnitsky’s name off the legislation. In the UK, a number of high-profile Britons, including the former attorney-general Lord Goldsmith, were even paid by agents working for the Kremlin to lobby on behalf of Russians under consideration for Magnitsky sanctions. When the first sanctions went through, Russia hit back with 25 bans of its own on UK officials.

Browder, often referred to as Putin’s No.1 enemy, has himself been the target of death threats, kidnap plots and Russian propaganda. In one wild tale that even appeared on billboards in Moscow, he is accused of being a CIA agent who arranged Magnitsky’s death; also cast in the plot is Putin’s biggest opponent, Navalny, though no evidence has been produced to support the claims. The circumstances of Magnitsky’s imprisonment and death have been investigated by several governments and independent organisations, including in Russia, but the Kremlin maintains Browder and Magnitsky are the real villains of the story. After Magnitsky’s death, both men were put on trial for the original $230 million tax fraud and convicted in absentia, making it the first trial of a dead man in Russian history, while the officials responsible were exonerated and in some cases honoured with awards.

The Australian inquiry accepted the testimony of Browder as credible over two independent submissions attempting to debunk the Magnitsky affair, though there was no official response from Russia. A Russian embassy spokesman said that was because it was not approached, “which speaks volumes on the nature of the inquiry”.

Browder warned the inquiry that it is not just Russia with a stake in squashing the laws: “I would imagine, with China, that there will be either a subtle or a not-so-subtle lobbying campaign to try and push this thing off track as the legislation goes through.”

The Chinese embassy in Australia did not respond to requests for comment.

Browder says the Australian laws can’t come soon enough “because the world is on fire right now”. And the inquiry agreed that any final legislation should bear the Magnitsky name.

“At this point in the world of human rights, ‘Magnitsky’ has become a verb. If you want to sanction somebody, you Magnitsky them,” Browder says.

“This is all for him, it has to bear his name. For his idealism, his strength, one day they will make physical monuments to him all over Russia, but in the meantime we’re going to make legal monuments.”