December 05, 2012

Legislative Notice: H.R. 6156 – Russia PNTR


Noteworthy

  • Background/Executive Summary: In order to fulfill our obligations under the World Trade Organization, and receive the benefits of both our and Russia’s membership, the United States must repeal the application of the Jackson-Vanik Amendment with respect to Russia. That amendment ties beneficial trade relations to a country’s protection of a certain fundamental human right: the right to emigrate. This legislation authorizes the President to terminate the application of Jackson-Vanik to Russia. Title IV requires the sanctioning of individuals responsible for the gross violation of the human rights of individuals seeking to expose illegal activity and promote human rights in Russia, namely Sergei Magnitsky.
  • Floor Situation: The Senate is considering the motion to proceed to the bill.

Overview/Background

“‘Normal trade relations’ (NTR) or ‘most-favored nation’ (MFN) trade status is used to denote nondiscriminatory treatment of a trading partner compared to that of other countries.”[1] The Jackson-Vanik Amendment places a condition on NTR status, denying eligibility to countries that restrict the rights of its citizens to emigrate.[2] It ties beneficial trade relations to a country’s protection of this fundamental human right. The President is authorized to waive this limitation or determine countries are in compliance with its conditions. One condition on exercising this authority is that the United States must have concluded a bilateral trade agreement providing for reciprocal extension of NTR treatment.

The United States concluded such a bilateral trade agreement with the Soviet Union in 1990, which applies to trade relations with Russia today. The United States waived the Jackson-Vanik restrictions on Russia beginning in June 1992, and determined on an annual basis Russia complied with its provisions beginning in 1994.[3]

The World Trade Organization (WTO) requires its members to extend to all other WTO members nondiscriminatory treatment of their goods and services in international trade on an unconditional basis, i.e., grant NTR to other member countries on a permanent basis (PNTR). Russia acceded to the World Trade Organization on August 22, 2012. Therefore, in order for the United States to receive the benefits of its, and Russia’s, WTO membership, the United States must grant PNTR to Russia, which requires repeal of the Jackson-Vanik Amendment as applied to Russia.

In 2011, Russia was the 31st largest export market for U.S. goods and was the 14th largest source of imports into the United States.[4]

House Action

The House passed the Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012, H.R. 6156, by a vote of 365-43 on November 16, 2012.

Bill Provisions

Titles I & III – Russia and Moldova PNTR

Titles I and III authorize the President to terminate application of the Jackson-Vanik Amendment with respect to Russia and Moldova, respectively.

Title II – Trade Enforcement Measures Related to Russia

Title II requires a collection of reports, such as how Russia is implementing its requirements under the international trade regime and any actions taken to ensure such compliance and otherwise promote the rule of law in Russia.

Title IV – Sergei Magnitsky Rule of Law Accountability Act

Title IV begins with a collection of findings about the systematic abuse of Sergei Magnitsky while in prison on allegations of embezzlement after he exposed corruption in the Russian government. It further lists unsolved murders and mistreatment of Russian citizens seeking to defend human rights in the country. Section 404 directs the President to list within 120 days of enactment people determined to be responsible for the detention and death of Magnitsky or the gross violation of human rights of others seeking to expose illegal activity by Russian officials or promote human rights in the country. Sections 405 and 406 require those listed then be sanctioned, by denying them eligibility for visas to enter the United States, revoking any visa issued to such a person, and freezing any of their assets within U.S. jurisdiction.


Administration Position

A Statement of Administration Policy has said it “strongly supports” the bill. In the past, the Obama Administration opposed linking PNTR and human rights issues in Russia, calling for a “clean” bill repealing the Jackson-Vanik Amendment as applied to Russia.  

Cost

The Congressional Budget Office estimates that implementing the bill would cost $1 million over the 2013-2017 period, assuming appropriations.

Possible Amendments

As of the publication of this notice, there is no unanimous consent agreement limiting the submission of amendments.   


[1] Congressional Research Service, Permanent Normal Trade Relations (PNTR) Status for Russia, CRS Rpt. RS21123, p. 1.

[2] Trade Act of 1974 §402, codified at 19 U.S.C. §2432.

[3] CRS Rpt. RS21123, supra note 1, at p. 2.

[4] Id. at p. 3.