Czechia prepares its own version of the American Magnitsky law

Denis Katsyv is a Russian businessman under investigation in the United States for large-scale money laundering. According to US investigators, he used shell companies and Czech banks for his illegal activities. His name is not on the EU’s list of Russians sanctioned, but the Czech government may soon be able to impose national sanctions on him based on the country’s own version of the US Magnitsky Act.

Jan Lipavsky |  Photo: Kateřina Cibulka, Czech Radio

The bill proposed by the government passed its first reading in the lower house on Wednesday and is currently being debated by the Foreign Affairs and Constitutional Law Committees of the Chamber of Deputies.

Czech Foreign Minister Jan Lipavsky defended the need to pass such legislation in the lower house on Wednesday:

“This is a perfectly legitimate legal tool that will give authorities the ability to react quickly to such cases – not just to report them, but to take unilateral action against these people and companies.”

Denis Katsyv is not an isolated case. Those on the EU sanctions list include only a few Russian entrepreneurs active in that country. Yet, according to statistics, more than 12,000 Russian-owned businesses operate on Czech territory – many of which are not physically present and simply transact financially from third countries.

Under the proposed law, Czechia will be able to “impose sanctions against individuals in the interest of national security, the protection of basic human rights and the fight against terrorism”. The draft law should also create a legal basis for listing entities on the EU sanctions list at the initiative of the Czech Republic.

The government originally aimed to get such a bill approved by the end of next year, but Russian aggression in Ukraine has underscored the need for action. However, his proposal to have the bill approved under an accelerated procedure given the international situation was vetoed by the opposition parties. Vice-president of the opposition ANO party, Alena Schillerová, stressed that the veto was not a political protest.

“We are ready to support this bill, but we want to be part of it. We want to submit our own proposals and contribute to improving it.

France, the Netherlands, Latvia and Estonia have already implemented similar legislation and its approval in this country seems only a matter of time.

Berta D. Wells