Matt Atlas

Czechia is drafting its own version of the US Magnitsky Act

ANO, Czechia, Magnitsky Act

Czechia may soon have its own version of the 2012 US Magnitsky Act, which would allow the country to impose national sanctions on individuals and legal entities who are not on the EU sanctions list for egregious violations of international law. The government may, for example, deny them admission into the nation or seize their assets.

Denis Katsyv is a Russian businessman who is being investigated in the United States for large-scale money laundering. According to American authorities, he carried out his illicit activities through phony firms and Czech banks. His name is not on the EU’s list of sanctioned Russian people, but the Czech government may soon be able to impose national penalties against him under the Czech Magnitsky Act.

The government-proposed bill passed its first reading in the lower chamber on Wednesday and is now being examined by the Chamber of Deputies’ foreign affairs and constitutional law committees.

On Wednesday, Czech Foreign Minister Jan Lipavsky defended the need for such legislation in the lower house:

“This is a perfectly legitimate legal tool which will give the authorities the possibility to respond to such cases quickly –not just to point them out, but to take unilateral action against such people and companies.”

Denis Katsyv is not an outlier. Only a few Russian entrepreneurs engaged in this country are on the EU sanctions list. Despite this, figures show that over 12,000 Russian-owned firms operate on Czech soil, many of which are not physically present and instead conduct financial operations from third countries.

Czechia will be able to “impose sanctions against individuals in the interest of national security, protection of fundamental human rights, and combating terrorism” under the proposed bill. The measure should also lay the groundwork for the Czech Republic’s initiative to include firms on the EU sanctions list.

The government had hoped to pass such legislation by the end of next year, but Russian intervention in Ukraine has highlighted the urgency of action. However, due to the international situation, its effort to have the law adopted in a fast-track mechanism was blocked by the opposing parties.

“We are ready to support this bill, but we want to have a part in it. We want to table our own proposals and help make it better.”

Alena Schillerová, deputy chair of the opposition ANO party, emphasized that the veto was not a political protest.

Similar legislation is already in place in France, the Netherlands, Latvia, and Estonia, and its passage in these countries appears to be a question of time.