19–010 

Calendar No. 461 

112TH CONGRESS REPORT " ! SENATE 2d Session 112–226 

RUSSIA AND MOLDOVA JACKSON-VANIK REPEAL AND 

MAGNITSKY RULE OF LAW ACCOUNTABILITY ACT 

SEPTEMBER 20, 2012.—Ordered to be printed 

Mr. BAUCUS, from the Committee on Finance, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany S. 3406] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Finance, having considered an original bill (S. 

3406) to authorize the extension of nondiscriminatory treatment 

(normal trade relations treatment) to the products of the Russian 

Federation and Moldova, to require reports on the compliance of 

the Russian Federation with its obligations as a member of the 

World Trade Organization, and to impose sanctions on persons responsible for gross violations of human rights, and for other purposes, reports favorably thereon without amendment and recommends that the bill do pass. 

CONTENTS 

Page 

I. Report and Other Materials of the Committee ........................................... 2 

A. Report of the Committee on Finance ...................................................... 2 

B. Summary of Committee Consideration of the Agreement .................... 2 

1. Background ........................................................................................ 2 

2. Committee Consideration ................................................................. 4 

C. Trade Relations with Russia ................................................................... 5 

1. United States-Russia Economic Relations ....................................... 5 

2. United States-Russia Trade Data .................................................... 6 

D. Trade Relations with Moldova ................................................................ 7 

1. United States-Moldova Economic Relations .................................... 7 

2. United States-Moldova Trade Data ................................................. 7 


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E. General Description of the Bill ............................................................... 9 

Title I—Permanent Normal Trade Relations for the Russian Federation ............................................................................................. 9 

Title II—Trade Enforcement Measures Relating to the Russian 

Federation ....................................................................................... 9 

Title III—Sanctions With Respect to Persons Responsible for Gross 

Violations of Human Rights .......................................................... 11 

Title IV—Permanent Normal Trade Relations for Moldova .............. 13 

F. Vote of the Committee in Reporting the Bill ......................................... 13 

II. Budgetary Impact of the Bill ........................................................................ 13 

III. Regulatory Impact of the Bill and Other Matters ...................................... 15 

IV. Additional Views of Senator Debbie Stabenow ........................................... 16 

V. Changes in Existing Law Made by the Bill, as Reported ........................... 17 

I. REPORT AND OTHER MATERIALS OF THE COMMITTEE 

A. REPORT OF THE COMMITTEE ON FINANCE

The Committee on Finance, having considered an original bill (S. 

3406) to authorize the extension of nondiscriminatory treatment 

(normal trade relations treatment) to the products of Russia and 

Moldova, to require reports on the compliance of the Russian Federation with its obligations as a member of the World Trade Organization (WTO), and to impose sanctions on persons responsible for 

gross violations of human rights, and for other purposes, reports favorably thereon and recommends that the bill do pass. 

B. SUMMARY OF COMMITTEE CONSIDERATION OF THE AGREEMENT

1. Background 

THE JACKSON-VANIK AMENDMENT

Section 401 of Title IV of the Trade Act of 1974 requires the 

President to continue to deny nondiscriminatory treatment (normal 

trade relations treatment) to any country not receiving such treatment at the time of the law’s enactment on January 3, 1975. Section 402 of Title IV, also referred to as the Jackson-Vanik amendment, provides that the President may extend normal trade relations treatment on a conditional basis to a country that is in full 

compliance with certain specified freedom-of-emigration conditions. 

Section 402 also authorizes the President to waive full compliance 

with the freedom-of-emigration requirements if the President determines that such a waiver would encourage freedom of emigration. 

Before the President may extend conditional normal trade relations 

to a country subject to Title IV, that country must first conclude 

a bilateral commercial agreement with the United States pursuant 

to section 405 of Title IV. The Russian Federation received conditional normal trade relations status in 1992 under a presidential 

waiver after concluding a bilateral commercial agreement. In 1994, 

the President determined that Russia was in full compliance with 

Title IV. That determination has been continuously confirmed in 

semiannual reviews since 1994. Likewise, Moldova received conditional normal trade relations status in 1992 under a presidential 

waiver after concluding a bilateral commercial agreement. In 1997, 

the President determined that Moldova was in full compliance with 

Title IV. That determination has been continuously confirmed in 

semiannual reviews since 1997. Moldova acceded to the WTO on 

July 26, 2001. 


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THE WTO AND NORMAL TRADE RELATIONS

WTO rules require that WTO member countries provide each 

other with unconditional or permanent normal trade relations. Because countries subject to the Jackson-Vanik provision are only 

provided annual normal trade relations, and only if they meet the 

conditions of Jackson-Vanik, the United States has had to pass legislation revoking the application of the Jackson-Vanik amendment 

and providing permanent normal trade relations (PNTR) status to 

countries subject to Jackson-Vanik when those countries joined the 

WTO. 

The Russian Federation applied to join the WTO in June 1993, 

and the WTO Working Party on Russia’s accession was established 

on January 16–17, 1993. On May 31, 2006, U.S. and Russian negotiators signed a bilateral agreement on the conditions for Russia’s 

accession into the WTO. The Working Party agreed to Russia’s accession package on November 10, 2011. The WTO Ministerial Conference invited Russia to join the WTO on December 16, 2011. Due 

to the application of Jackson-Vanik, the United States was unable 

to grant unconditional normal trade relations status to Russia. As 

a result, the United States invoked the ‘‘non-application’’ provision 

of Article XIII of the WTO Agreement. This means that, absent the 

extension of PNTR, when Russia joins the WTO on August 22, 

2012, neither Russia nor the United States will be bound by the 

WTO Agreement with respect to each other. Therefore, Russia will 

not be required to extend to the United States the full benefits of 

its WTO accession commitments. 

Moldova joined the WTO on July 26, 2001. Due to the application 

of Jackson-Vanik, the United States was unable to grant unconditional normal trade relations status to Moldova. As a result, the 

United States invoked the ‘‘non-application’’ provision of Article 

XIII of the WTO Agreement, meaning that to date, neither Moldova 

nor the United States have been bound by the WTO Agreement 

with respect to each other. Therefore, Moldova has not been required to extend to the United States the full benefits of its WTO 

accession commitments. 

THE MAGNITSKY BILL

Senator Cardin introduced S. 1039, ‘‘The Sergei Magnitsky Rule 

of Law Accountability Act,’’ on May 19, 2011. The purpose of the 

bill is to impose sanctions on persons that were responsible for or 

benefited financially from the detention, abuse, or death of Sergei 

Magnitsky, were involved in the criminal conspiracy uncovered by 

Sergei Magnitsky, or were responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human 

rights committed against individuals seeking to expose illegal activity carried out by officials of the Government of the Russian Federation or to obtain, exercise, defend or promote internationally 

recognized human rights and freedoms anywhere in the world. The 

Senate Committee on Foreign Relations approved the bill by voice 

vote on June 26, 2012. For further information on this bill, see Senate Report 112–191 of July 23, 2012. 


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2. Committee Consideration 

Chairman Baucus convened two hearings of the Committee on 

Finance to consider PNTR with Russia. The first, with private sector and non-governmental organization representatives, was held 

on March 15, 2012. Testifying at the hearing were: Mr. Samuel 

Allen, Chairman and CEO of Deere & Company; Mr. Ronald 

Pollett, President and CEO of GE Russia; Mr. Watty Taylor, President of the Montana Stockgrowers Association; Mr. Paul Williams, 

President and Chairman of the Board of the American Society of 

Composers, Authors and Publishers; and Mr. Al Larson, Chairman 

of the Board of Transparency International USA. 

The second Committee on Finance hearing, on June 21, 2012, 

was with senior Administration officials. Testifying at the hearing 

were: Ambassador Ron Kirk, U.S. Trade Representative; Tom 

Vilsack, Secretary of Agriculture; and Ambassador William J. 

Burns, Deputy Secretary of State. 

The Finance Committee also received numerous statements for 

the record, all of which either supported PNTR with Russia or were 

neutral. For example, the Committee received statements of support for PNTR from Russian democracy activists such as the Moscow-based Helsinki Group, American and Russian Jewish groups 

such as NCSJ and the American Israel Public Affairs Group, six 

former U.S. Trade Representatives, the U.S. Chamber of Commerce, the National Association of Manufacturers, and the American Farm Bureau Federation. 

Senator Baucus, for himself and Senators Thune, Kerry, and 

McCain, introduced S. 3285 on June 12, 2012 to establish PNTR 

with the Russian Federation. Senator Lugar, for himself and Senators Kerry, McCain, Hagan, and Cardin, introduced S. 309 on 

February 8, 2011 to establish PNTR with Moldova. The Moldova 

bill was later cosponsored by Senators Burr, Crapo, Lieberman, 

and Shaheen. 

On July 13, 2012, following consultation with Ranking Member 

Hatch, Chairman Baucus announced his mark of an original bill to 

establish PNTR with Russia and Moldova that combined elements 

of S. 3285 and S. 309, as well as additional elements proposed by 

Senator Hatch, in particular the enforcement, anti-corruption, rule 

of law, and investor protection requirements found in Title II of the 

bill. One such requirement is for USTR to report on Russia’s implementation of its WTO commitments on sanitary and phytosanitary 

(SPS) issues. Members of the Committee understand that this report will, among other issues, cover Russia’s treatment of the feed 

additive ractopamine. 

On July 16, 2012, Senators Cardin, Kyl, Schumer, Snowe, Cantwell, Coburn, Menendez, Thune, Burr, Cornyn, and Grassley proposed an amendment to add the Sergei Magnitsky Rule of Law Accountability Act of 2011, as reported out of the Senate Committee 

on Foreign Relations on June 26, 2012. On July 17, 2012, following 

consultation with Ranking Member Hatch, Chairman Baucus announced a modification of his mark that added Senator Cardin’s 

amendment. While numerous concerns were expressed regarding 

Russia’s foreign policy, these were considered to fall outside of the 

scope of PNTR legislation, which has typically focused on trade and 

human rights concerns. 


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The Committee on Finance met in open executive session on July 

18, 2012 to consider favorably reporting the Chairman’s mark of 

the bill on Russia and Moldova PNTR, as modified. Five amendments were offered. The first amendment, by Senator Cornyn, 

sought to add Magnitsky sanctions for enablers of mass atrocities. 

It was withdrawn. The second amendment, by Senator Cornyn, 

would have delayed the effective date of PNTR until Russia ceased 

arms transfers to Syria. The amendment failed by a roll call vote 

of 8 ayes, 16 nays. Ayes: Grassley (proxy), Snowe (proxy), Kyl, 

Crapo, Roberts, Enzi, Cornyn, Coburn. Nays: Baucus, Rockefeller, 

Conrad, Bingaman (proxy), Kerry, Wyden, Schumer, Stabenow, 

Cantwell, Nelson, Menendez, Carper, Cardin, Hatch, Thune, Burr. 

The third amendment, by Senator Schumer, was withdrawn. It 

would have required a new report on Russia’s compliance with the 

WTO Information Technology Agreement. The fourth amendment, 

by Senator Menendez, to ensure effective enforcement of intellectual property rights in Russia, was withdrawn. 

The fifth amendment, by Senator Kyl, sought to clarify that a report by the Secretary of Commerce on a corruption hotline and 

website will include reporting on outreach by Commerce on the 

availability of these resources. The amendment passed by voice 

vote. 

The Committee then favorably reported the bill, as amended, by 

a roll call vote of 24 ayes and 0 nays. Ayes: Baucus, Rockefeller, 

Conrad, Bingaman (proxy), Kerry, Wyden, Schumer, Stabenow, 

Cantwell, Nelson, Menendez, Carper, Cardin, Hatch, Grassley 

(proxy), Snowe (proxy), Kyl, Crapo, Roberts (proxy), Enzi, Cornyn 

(proxy), Coburn (proxy), Thune, Burr. Chairman Baucus filed the 

reported bill, S. 3406, on behalf of the Finance Committee on July 

19, 2012. 

C. TRADE RELATIONS WITH RUSSIA

1. United States-Russia Economic Relations 

Russia has the sixth largest gross domestic product (GDP) in the 

world at $2.2 trillion (compared to $14.6 trillion in the United 

States). Following the collapse of the Soviet Union, Russia implemented broad economic reforms in the 1990s that privatized most 

industry, with notable exceptions in the energy and defense-related 

sectors. Russia is the largest economy outside of the WTO. 

Russia’s economy has relied heavily on oil and gas exports, and 

these account for nearly three quarters of the $33.6 billion of Russia’s exports to the United States in 2011. The 2009 recession and 

the accompanying collapse in oil prices highlighted the problems 

with this approach, and Russian policy-makers have since been 

professing the importance of diversifying and creating an innovation-based economy. 

U.S.-Russia trade grew at an annual rate of 35 percent in 2010 

and 37.9 percent in 2011. Russia is currently our 20th largest 

goods trading partner with $42.9 billion in total (two-way) goods 

trade during 2011. U.S. goods exports to Russia totaled $8.3 billion, 

and goods imports from Russia totaled $33.6 billion. The U.S. goods 

trade deficit with Russia was $26.3 billion in 2011. The top U.S. 

exports to Russia in 2011 were machinery, vehicles, aircraft, meat 

(poultry and pork), and optic and medical instruments. The five 


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largest imports from Russia in 2011 were mineral fuel (oil), iron 

and steel, precious stones (platinum), inorganic chemical (enriched 

uranium), and fertilizers. 

U.S. exports of agricultural products to Russia totaled $1.2 billion in 2011, making Russia the 19th largest U.S. agricultural export market. Leading categories of U.S. agricultural exports to Russia include fresh/chilled/frozen beef and pork, and poultry meat. 

U.S. imports of agricultural products from Russia totaled $34 million in 2011. 

2. United States-Russia Trade Data 

The following tables summarize the top U.S. merchandise exports to Russia and the top U.S. merchandise imports from Russia 

from 2010 through 2012. 

TOP 10 U.S. DOMESTIC EXPORTS AT FAS VALUE TO RUSSIA—BY HARMONIZED TARIFF SCHEDULE 

(HTS) CHAPTERS, RANKED BY 2011 EXPORTS, YTD = YEAR TO DATE (JAN. TO MAY) 

HTS Code—Product 2010 ($ millions) 

2011 ($ millions) 

2011 Percent of 

total 

2011 YTD 

($ millions) 

2012 YTD 

($ millions) 

ALL CATEGORIES ....................................................... 5,968 8,285 100% 3,224 4,290 

84.—NUCLEAR REACTORS, BOILERS, MACHINERY 

AND MECHANICAL APPLIANCES; PARTS THEREOF 1,651 2,168 26.17 904 1,040 

87.—VEHICLES, OTHER THAN RAILWAY OR TRAMWAY ROLLING STOCK, AND PARTS AND ACCESSORIES THEREOF .................................................. 484 1,111 13.41 476 709 

88.—AIRCRAFT, SPACECRAFT, AND PARTS THEREOF 276 741 8.94 265 609 

2.—MEAT AND EDIBLE MEAT OFFAL ........................ 649 697 8.41 197 366 

90.—OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, 

MEASURING, CHECKING, PRECISION, MEDICAL OR 

SURGICAL INSTRUMENTS AND APPARATUS; 

PARTS AND ACCESSORIES THEREOF .................... 382 548 6.61 170 212 

85.—ELECTRICAL MACHINERY AND EQUIPMENT 

AND PARTS THEREOF; SOUND RECORDERS AND 

REPRODUCERS, TELEVISION RECORDERS AND 

REPRODUCERS, PARTS AND ACCESSORIES .......... 395 546 6.59 206 284 

39.—PLASTICS AND ARTICLES THEREOF .................. 285 369 4.45 172 143 

28.—INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUNDS OF PRECIOUS METALS, OF 

RARE-EARTH METALS, OF RADIOACTIVE ELEMENTS OR OF ISOTOPES ....................................... 143 180 2.17 48 61 

38.—MISCELLANEOUS CHEMICAL PRODUCTS .......... 120 136 1.64 39 56 

8.—EDIBLE FRUIT AND NUTS; PEEL OF CITRUS 

FRUIT OR MELONS ................................................ 120 132 1.59 58 60 

ALL CATEGORIES ....................................................... 5,968 8,285 100 3,224 4,290 

TOP 10 U.S. DOMESTIC IMPORTS AT FAS VALUE FROM RUSSIA—BY HARMONIZED TARIFF 

SCHEDULE (HTS) CHAPTERS, RANKED BY 2011 IMPORTS, YTD = YEAR TO DATE (JAN. TO MAY) 

HTS Code—Product 2010 

($ millions) 

2011 

($ millions) 

2011 Percent of 

total 

2011 YTD 

($ millions) 

2012 YTD 

($ millions) 

ALL CATEGORIES ....................................................... 25,199 33,610 100% 13,017 11,921 

27: MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES; MINERAL WAXES ................................... 17,319 23,869 71.02 9,223 8,284 

72: IRON AND STEEL ................................................. 1,369 1,675 4.98 683 1,189 

71: NATURAL OR CULTURED PEARLS, PRECIOUS OR 

SEMIPRECIOUS STONES, PRECIOUS METALS; 

PRECIOUS METAL CLAD METALS, ARTICLES 

THEREOF; IMITATION JEWELRY; COIN ................... 710 1,404 4.18 509 303 


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TOP 10 U.S. DOMESTIC IMPORTS AT FAS VALUE FROM RUSSIA—BY HARMONIZED TARIFF SCHEDULE (HTS) CHAPTERS, RANKED BY 2011 IMPORTS, YTD = YEAR TO DATE (JAN. TO MAY)—Continued 

HTS Code—Product 2010 

($ millions) 

2011 

($ millions) 

2011 Percent of 

total 

2011 YTD 

($ millions) 

2012 YTD 

($ millions) 

28: INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUNDS OF PRECIOUS METALS, OF 

RARE-EARTH METALS, OF RADIOACTIVE ELEMENTS OR OF ISOTOPES ....................................... 1,279 1,380 4.11 285 225 

31: FERTILIZERS ........................................................ 641 1,127 3.35 665 294 

76: ALUMINUM AND ARTICLES THEREOF .................. 523 636 1.89 273 381 

29: ORGANIC CHEMICALS .......................................... 609 584 1.74 284 170 

75: NICKEL AND ARTICLES THEREOF ........................ 731 565 1.68 314 158 

81: BASE METALS NESOI; CERMETS; ARTICLES 

THEREOF ............................................................... 336 275 0.82 124 130 

3: FISH AND CRUSTACEANS, MOLLUSCS AND OTHER 

AQUATIC INVERTEBRATES ..................................... 267 268 0.80 124 100 

ALL CATEGORIES ....................................................... 25,199 33,610 100 13,017 11,921 

Sources: Data has been compiled from tariff and trade data from the U.S. Department of Commerce and the U.S. International Trade Commission. 

D. TRADE RELATIONS WITH MOLDOVA

1. United States-Moldova Economic Relations 

Moldova is Europe’s poorest country, according to the World 

Bank. Living standards are low for many Moldovans, particularly 

in rural areas. Remittances from Moldovans working abroad 

amounted to 22 percent of the country’s GDP in 2010. 

Moldova is currently negotiating an Association Agreement with 

the European Union, which provides for cooperation in a wide variety of spheres and holds out the possibility of an eventual free 

trade agreement and visa-free travel. 

In 2011, services comprised most of Moldova’s GDP, at 63.5 percent, while industry comprised 20.3 percent and agriculture comprised 16.2 percent. Major industries include sugar, vegetable oil, 

food processing, agricultural machinery, foundry equipment, refrigerators and freezers, washing machines, hosiery, shoes, and textiles. 

Bilateral (two-way) goods trade with Moldova totaled $46.5 million during 2011. U.S. goods exports to Moldova totaled $31.4 million, and goods imports from Moldova totaled $16.1 million. The 

U.S. goods trade surplus with Moldova was $15.3 million in 2011. 

The top U.S. exports to Moldova in 2011 were meat and edible 

meat offal, machinery, electrical machinery and equipment, optic 

and medical instruments, and vehicles. The five largest imports 

from Moldova in 2011 were beverages and spirits, apparel, and 

footwear. 

2. United States-Moldova Trade Data 

The following tables summarize the top U.S. merchandise exports to Moldova and the top U.S. merchandise imports from 

Moldova from 2010 through 2012. 


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TOP 10 U.S. DOMESTIC EXPORTS AT FAS VALUE TO MOLDOVA—BY HARMONIZED TARIFF 

SCHEDULE (HTS) CHAPTERS, RANKED BY 2011 EXPORTS, YTD = YEAR TO DATE (JAN. TO MAY) 

HTS Code—Product 2010 ($ millions) 

2011 ($ millions) 

2011 Percent of 

total 

2011 YTD 

($ millions) 

2012 YTD 

($ millions) 

ALL CATEGORIES ....................................................... 34.5 31.4 100% 10.5 12.3 

02.—MEAT AND EDIBLE MEAT OFFAL ...................... 13.3 13.1 41.72 4.3 6.1 

84.—NUCLEAR REACTORS, BOILERS, MACHINERY 

AND MECHANICAL APPLIANCES; PARTS THEREOF 2 4.2 13.38 0.8 1.2 

98.—SPECIAL CLASSIFICATION PROVISIONS, NESOI 5.4 4 12.74 1.1 0.8 

85.—ELECTRICAL MACHINERY AND EQUIPMENT 

AND PARTS THEREOF; SOUND RECORDERS AND 

REPRODUCERS, TELEVISION RECORDERS AND 

REPRODUCERS, PARTS AND ACCESSORIES .......... 0.8 2.8 8.92 0.7 0.6 

90.—OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, 

MEASURING, CHECKING, PRECISION, MEDICAL OR 

SURGICAL INSTRUMENTS AND APPARATUS; 

PARTS AND ACCESSORIES THEREOF .................... 0.9 1.3 4.14 0.3 0.8 

87.—VEHICLES, OTHER THAN RAILWAY OR TRAMWAY ROLLING STOCK, AND PARTS AND ACCESSORIES THEREOF .................................................. 1.6 0.9 2.87 0.4 1.5 

38.—MISCELLANEOUS CHEMICAL PRODUCTS .......... 0.1 0.9 2.87 0.5 0.1 

28.—INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUNDS OF PRECIOUS METALS, OF 

RARE-EARTH METALS, OF RADIOACTIVE ELEMENTS OR OF ISOTOPES ....................................... 0 0.7 2.23 0.7 0 

88.—AIRCRAFT, SPACECRAFT, AND PARTS THEREOF 0.4 0.7 2.23 0.4 0.2 

73.—ARTICLES OF IRON OR STEEL .......................... 0 0.7 2.23 0.6 0.2 

ALL CATEGORIES ....................................................... 34.5 31.4 100 10.5 12.3 

TOP 10 U.S. IMPORTS FOR CONSUMPTION AT CUSTOMS VALUE FROM MOLDOVA—BY HARMONIZED 

TARIFF SCHEDULE (HTS) CHAPTERS, RANKED BY 2011 IMPORTS, YTD = YEAR TO DATE (JAN. 

TO MAY) 

HTS Code—Product 2010 ($ millions) 

2011 ($ millions) 

2011 Percent of 

total 

2011 YTD 

($ millions) 

2012 YTD 

($ millions) 

ALL CATEGORIES ....................................................... 12.3 16.1 100% 4.1 7.6 

22.—BEVERAGES, SPIRITS AND VINEGAR ................ 2.7 5.1 31.68 1.7 3.2 

62.—ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT KNITTED OR CROCHETED .......... 3.2 4.3 26.71 0.6 1.1 

63.—MADE-UP TEXTILE ARTICLES NESOI; 

NEEDLECRAFT SETS; WORN CLOTHING AND 

WORN TEXTILE ARTICLES; RAGS ........................... 1.3 1.2 7.45 0.3 0.5 

61.—ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED OR CROCHETED .................. 1.3 1.1 6.83 0.3 0.4 

64.—FOOTWEAR, GAITERS AND THE LIKE; PARTS OF 

SUCH ARTICLES .................................................... 0.6 0.8 4.97 0.3 0.3 

42.—ARTICLES OF LEATHER; SADDLERY AND HARNESS; TRAVEL GOODS, HANDBAGS AND SIMILAR 

CONTAINERS; ARTICLES OF GUT (OTHER THAN 

SILKWORM GUT) .................................................... 1.3 0.7 4.35 0.3 0.2 

19.—PREPARATIONS OF CEREALS, FLOUR, STARCH 

OR MILK; BAKERS’ WARES .................................... 0.4 0.6 3.73 0.1 0.3 

95.—TOYS, GAMES AND SPORTS EQUIPMENT; 

PARTS AND ACCESSORIES THEREOF .................... 0.4 0.5 3.11 0 0.1 

39.—PLASTICS AND ARTICLES THEREOF .................. 0.1 0.5 3.11 0 0.8 

84.—NUCLEAR REACTORS, BOILERS, MACHINERY 

AND MECHANICAL APPLIANCES; PARTS THEREOF 0.1 0.4 2.48 0.1 0 

ALL CATEGORIES ....................................................... 12.3 16.1 100 4.1 7.6 


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E. GENERAL DESCRIPTION OF THE BILL

Section 1. Short title; table of contents 

This section provides that the short title of the act is the ‘‘Russia 

and Moldova Jackson-Vanik Repeal and Magnitsky Rule of Law 

Accountability Act of 2012’’ (the Act). Section 1 also provides the 

table of contents for the Act. 

TITLE I—PERMANENT NORMAL TRADE RELATIONS FOR 

THE RUSSIAN FEDERATION 

Section 101. Findings 

Section 101 sets forth Congressional findings relating to the Russian Federation’s record in meeting the requirements of Title IV of 

the Trade Act of 1974 (Title IV) and to the Russian Federation’s 

imminent accession to the WTO. 

Section 102. Termination of application of Title IV of the Trade Act 

of 1974 to products of the Russian Federation 

Section 102 authorizes the President to determine that Title IV 

should no longer apply to the Russian Federation, and to proclaim 

the extension of normal trade relations treatment to the products 

of the Russian Federation. Section 102 terminates the application 

of Title IV to Russia on the effective date of the President’s proclamation, which shall be no sooner than the date the Russian Federation accedes to the WTO. 

TITLE II—TRADE ENFORCEMENT MEASURES RELATING TO 

THE RUSSIAN FEDERATION 

Section 201. Reports on implementation by the Russian Federation 

of obligations as a member of the World Trade Organization 

and enforcement actions by the United States Trade Representative 

Section 201(a) requires the United States Trade Representative 

(USTR) to report annually to the Senate Finance Committee and 

the House Ways and Means Committee on the Russian Federation’s implementation of its obligations as a member of the WTO, 

in particular with respect to obligations relating to sanitary and 

phytosanitary (SPS) issues and intellectual property protection. 

The USTR’s report would also cover the Russian Federation’s 

progress on acceding to and implementing the WTO Information 

Technology Agreement and the WTO Agreement on Government 

Procurement. To the extent the USTR believes that the Russian 

Federation is not fully implementing a WTO agreement or making 

adequate progress in acceding to the above agreements, the USTR 

would be required to include in the report its plans for addressing 

those situations. In preparing the report, the USTR must provide 

an opportunity for public comment, including by holding a public 

hearing. 

Section 201(b) requires the USTR to report within 180 days, and 

annually thereafter, to the Senate Finance Committee and the 

House Ways and Means Committee on enforcement actions taken 

by the USTR to ensure full compliance by the Russian Federation 

with its WTO obligations. 


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Section 202. Promotion of the rule of law in the Russian Federation 

to support United States trade and investment 

Section 202(a) requires the USTR and the Secretary of State to 

report annually on measures they have taken and results achieved 

to promote the rule of law in the Russian Federation and to support U.S. trade and investment by strengthening investor protections in Russia, including the negotiation of a new bilateral investment treaty; advocating for U.S. investors in Russia, including by 

promoting the claims of U.S. investors in the Yukos Oil Company; 

encouraging all parties to the Organisation for Economic Co-operation and Development Anti-Bribery Convention, including the 

Russian Federation, to fully implement their commitments; promoting corruption-free customs, tax, and judicial authorities in the 

Russian Federation; and increasing cooperation between the United 

States and the Russian Federation to expand the capacity for civil 

society organizations to monitor, investigate, and report on suspected incidents of corruption. 

Section 202(b) requires the Secretary of Commerce to establish 

and maintain a hotline and secure website to allow U.S. entities to 

report instances of bribery, attempted bribery, and other forms of 

corruption in the Russian Federation that could affect them and to 

request U.S. assistance relating to these issues in the Russian Federation. Section 202(b) also requires the Secretary of Commerce to 

report annually to the Senate Finance Committee and the House 

Ways and Means Committee on the instances of bribery, attempted 

bribery, and other forms of corruption reported through the hotline 

and website, a description of the regions where those instances are 

alleged to have occurred, and a summary of U.S. actions taken in 

response to requests. The identities of those reporting will not be 

included in the report. The report will also describe the efforts undertaken by the Secretary of Commerce to inform U.S. entities 

doing business in Russia of the availability of assistance with corruption problems through the hotline and website. 

Section 203. Reports on laws, policies, and practices of the Russian 

Federation that discriminate against United States digital 

trade 

Section 203 amends section 181 of the Trade Act of 1974 by requiring that the report under section 181 include a description of 

laws, policies, or practices of the Russian Federation that deny fair 

and equitable treatment to U.S. digital trade. 

Section 204. Efforts to reduce barriers to trade imposed by the Russian Federation 

Section 204 requires the USTR to pursue the reduction of Russian barriers to U.S. exports through efforts to negotiate a bilateral 

agreement with the Russian Federation that would recognize U.S. 

SPS measures as equivalent to Russian SPS measures, and 

through efforts to obtain the Russian Federation’s acceptance of an 

action plan to provide greater protections for intellectual property 

rights than those provided under the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights. 


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TITLE III—SANCTIONS WITH RESPECT TO PERSONS 

RESPONSIBLE FOR GROSS VIOLATIONS OF HUMAN RIGHTS 

Section 301. Short title 

Section 301 provides that this title may be cited as the ‘‘Sergei 

Magnitsky Rule of Law Accountability Act of 2012.’’ 

Section 302. Findings 

Section 302 sets forth Congressional findings relating to the 

death of Sergei Magnitsky, as well as human rights and corruption 

issues in Russia more generally. 

Section 303. Definitions 

Section 303 defines the terms ‘‘admitted,’’ ‘‘alien,’’ ‘‘appropriate 

congressional committees,’’ ‘‘financial institution,’’ and ‘‘United 

States Person.’’ 

Section 304. Identification of persons responsible for the detention, 

abuse and death of Sergei Magnitsky and other gross violations 

of human rights 

Section 304(a) requires the Secretary of State, in consultation 

with the Secretary of the Treasury, to submit to the appropriate 

congressional committees a list of each person the Secretary of 

State determines meets one of the following categories of criteria: 

(1) Persons responsible for the detention, abuse, or death of 

Mr. Magnitsky; persons who participated in efforts to conceal 

the legal liability for the detention, abuse, or death of Mr. 

Magnitsky; persons who benefitted financially from the detention, abuse, or death of Mr. Magnitsky; or persons involved in 

the criminal conspiracy uncovered by Mr. Magnitsky; or 

(2) Persons responsible for extrajudicial killings, torture, or 

other gross violations of internationally recognized human 

rights committed against individuals seeking: (A) to expose illegal activity carried out by officials of the Russian Government; or (B) to obtain, exercise, defend, or promote internationally recognized human rights and freedoms, such as the freedoms of religion, expression, association, and assembly, and 

the rights to a fair trial and democratic elections, anywhere in 

the world; or 

(3) Persons who acted as an agent of or on behalf of a person 

in a matter relating to an activity described in paragraphs (1) 

or (2). 

Section 304(b) requires the Secretary of State to update the list 

required by subsection 304(a) as more information becomes available. 

Section 304(c) states that a person shall be removed from the list 

required by section 304(a) if the Secretary of State determines that 

the person did not engage in the activity for which the person was 

added to the list. 

Section 304(d) describes the form the list will take and the extent 

of its public availability. It requires that, except as permitted by 

subsections 304(d)(2)-(3), the list shall be submitted in unclassified 

form and published in the Federal Register. Section 304(d)(2) permits information to be submitted in a classified annex if the Secretary of State determines that it is necessary for the national seVerDate Mar 15 2010 05:38 Sep 26, 2012 Jkt 019010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\SR226.XXX SR226

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curity interests of the United States to do so, and, prior to submitting a list including a classified annex, provides the appropriate 

congressional committees notice of and a justification for including 

each person in the classified annex. Section 304(d)(3) requires that, 

not later than 300 days after the date of enactment and annually 

thereafter, the Secretary review the classified annex and provide to 

the appropriate congressional committees a justification for continuing to include each person in such an annex. 

Section 304(e) requires the Secretary of State to provide a response not later than 120 days after receiving a written request 

from the chairperson and ranking member of one of the appropriate congressional committees concerning whether a specific person meets the criteria for being added to the list requires by subsection 4(a). The response may be submitted in classified form if 

the Secretary determines that it is necessary for the national security interests of the United States to do so. 

Section 304(f) clarifies that the Secretary of State shall publish 

the list required by subsection 304(a) without regard to the requirements of section 222(f) of the Immigration and Nationality Act (8 

U.S.C. 1202(f)) with respect to confidentiality of records pertaining 

to the issuance or refusal of visas or permits to enter the United 

States. 

Section 305. Inadmissibility of Certain Aliens 

This section provides that an alien is ineligible to receive a visa 

to enter the United States and ineligible to be admitted to the 

United States if the alien is on the list required by section 304(a), 

and that the Secretary of State shall revoke, in accordance with 

section 221(i) of the Immigration and Nationality Act (8 U.S.C. 

1201(i)), the visa or other documentation of any alien who would 

be ineligible to receive such a visa or documentation under this 

title. The application of this section may be waived by the Secretary of State if the Secretary determines that such a waiver is 

necessary to permit the United States to comply with the Agreement between the United Nations and the United States of America regarding the Headquarters of the United Nations, signed June 

26, 1947, and entered into force November 21, 1947, or if the Secretary determines that a waiver is in the national security interests of the United States and provides, prior to granting such a 

waiver, notice of and a justification for the waiver to the appropriate congressional committees. 

Section 306. Financial measures 

This section requires the Secretary of the Treasury to freeze and 

prohibit all transactions in property and interests in property of a 

person that the Secretary, in consultation with the Secretary of 

State, determines has engaged in an activity described in paragraph (1), (2), or (3) of section 304(a) if such property and interests 

in property are in the United States, come within the United 

States, or come within the possession or control of a United States 

person. The Secretary of the Treasury may waive the application 

of this section if the Secretary determines that such a waiver is in 

the national security interests of the United States and, prior to 

granting such a waiver, provides notice of and justification for the 

waiver to the appropriate congressional committees. 


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Section 307. Report to Congress 

This section requires the Secretary of State and Secretary of 

Treasury to submit a report one year after the date of enactment 

(and annually thereafter) to the appropriate congressional committees. The report must describe the actions taken to carry out this 

title, including the number of times and circumstances in which 

persons described in section 304(a) have been added to the list during the year preceding the report and if few or no such persons 

have been added during that year, the reasons for not adding more 

persons to the list. The report must also describe efforts to encourage the governments of other countries to impose sanctions that 

are similar to the sanctions imposed under this title. 

TITLE IV—PERMANENT NORMAL TRADE RELATIONS FOR 

MOLDOVA 

Section 401. Findings 

Section 401 sets forth Congressional findings relating to 

Moldova’s record in meeting the requirements of Title IV and to 

Moldova’s accession to the WTO. 

Section 402. Termination of application of Title IV of the Trade Act 

of 1974 to products of Moldova 

Section 402 authorizes the President to determine that Title IV 

should no longer apply to Moldova, and to proclaim the extension 

of normal trade relations treatment to the products of Moldova. 

Section 402 terminates the application of Title IV to Moldova on 

the date of the President’s proclamation. 

F. VOTE OF THE COMMITTEE IN REPORTING THE BILL

In compliance with section 133 of the Legislative Reorganization 

Act of 1946, the Committee states that on July 18, 2012, S. 3046 

was ordered favorably reported by a roll call vote of 24 ayes and 

0 nays. Ayes: Baucus, Rockefeller, Conrad, Bingaman (proxy), 

Kerry, Wyden, Schumer, Stabenow, Cantwell, Nelson, Menendez, 

Carper, Cardin, Hatch, Grassley (proxy), Snowe (proxy), Kyl, 

Crapo, Roberts (proxy), Enzi, Cornyn (proxy), Coburn (proxy), 

Thune, Burr. 

II. BUDGETARY IMPACT OF THE BILL 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 24, 2012. 

Hon. MAX BAUCUS, 

Chairman, Committee on Finance, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 3406, the Russia and 

Moldova Jackson-Vanik Repeal and Magnitsky Rule of Law Accountability Act of 2012. 


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If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

Director. 

Enclosure. 

S. 3406—Russia and Moldova Jackson-Vanik Repeal and 

Magnitsky Rule of Law Accountability Act of 2012 

CBO estimates that implementing S. 3406 would cost $7 million 

over the 2013–2017 period, assuming appropriation of the necessary amounts. The bill would affect direct spending and revenues; therefore, pay-as-you-go procedures apply, but CBO estimates 

that any such effects would not be significant in any year. S. 3406 

contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect 

the budgets of state, local, or tribal governments. 

S. 3406 would remove Moldova and the Russian Federation from 

the list of countries specified under title IV of the Trade Act of 

1974 (the Jackson-Vanik amendment), thereby granting them permanent normal trade relations (NTR) with the United States. 

Those countries have had NTR status with the United States for 

about 20 years, and CBO’s baseline reflects the expectation that 

they will maintain that status. Establishing permanent NTR with 

Moldova and the Russian Federation could potentially increase tariff collections by lifting quotas on certain imported goods. CBO estimates, however, that any such effects would be insignificant over 

the 2013–2022 period. 

Title III of S. 3406 would require the Departments of State and 

Treasury to compile, publish, and annually report on a list of persons responsible for the death of Sergei Magnitsky or human rights 

violations in foreign countries. Listed persons would be ineligible 

for entry into the United States, have any existing visas revoked, 

and have their assets frozen. 

Based on information from the Departments of State, Treasury, 

and Commerce, as well as the U.S. Trade Representative (USTR), 

CBO estimates that implementing title III of S. 3406 would cost a 

total of $7 million over the 2013–2017, assuming appropriation of 

the necessary amounts. That amount includes affected agencies’ 

costs to hire additional staff, complete required reports, hold public 

hearings, and establish and maintain a secure phone line and Web 

site related to activities under the bill. CBO also expects that enacting S. 3406 would decrease revenues from visa fees and increase 

revenues from civil and criminal penalties imposed on those who 

violate the regulations. CBO estimates that the provisions would 

affect few people and that revenues deposited in the Treasury 

would not be significant in any year. The legislation also would increase direct spending from criminal penalties, which are deposited 

in the Crime Victims Fund and spent in subsequent years. However, CBO expects that any net effects associated with collecting 

and spending such penalties would not be significant in any year. 

Title III of S. 3406 is similar to two other bills for which CBO 

has prepared cost estimates. On July 5, 2012, CBO transmitted a 

cost estimate for S. 1039, the Sergei Magnitsky Rule of Law Accountability Act of 2012, as reported by the Senate Committee on 


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Foreign Relations on June 26, 2012. That bill is identical to title 

III of S. 3406, and our cost estimates are the same. On June 29, 

2012, CBO transmitted a cost estimate for H.R. 4405, the Sergei 

Magnitsky Rule of Law Accountability Act of 2012, as ordered reported by the House Committee on Foreign Affairs on June 7, 2012. 

Because the provisions of H.R. 4405 would apply only to human 

rights violations in the Russian Federation, our estimate of costs 

under that bill is lower. 

The CBO staff contacts for this estimate are Sunita D’Monte, 

Matthew Pickford, and Susan Willie. This estimate was approved 

by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

III. REGULATORY IMPACT OF THE BILL AND OTHER 

MATTERS 

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee states that S. 

3406 will not significantly regulate any individuals or businesses, 

will not affect the personal privacy of individuals, and will result 

in no significant additional paperwork. 

The following information is provided in accordance with section 

423 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 

L. No. 104–04). The Committee has reviewed the provisions of S. 

3406 as approved by the Committee on July 18, 2012. In accordance with the requirements of UMRA, the Committee has determined that the provisions of S. 3406 contain no intergovernmental 

mandates as defined in UMRA, and impose no costs on state, local, 

or tribal governments. 


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IV. ADDITIONAL VIEWS OF 

SENATOR DEBBIE STABENOW 

Granting Russia PNTR status without strong oversight and accountability would be another failed trade deal for American manufacturers and farmers. While I am pleased with the accountability 

measures added to the bill in Committee, I will continue working 

with my colleagues to further strengthen these provisions as this 

bill is considered on the Senate floor. 

We must be willing to hold Russia, and all of our trade partners, 

accountable to the commitments they made to join the World Trade 

Organization. That includes commitments related to improving 

labor standards, protecting intellectual property rights, and enforcing against human rights violations. We need to stand up for 

American businesses and workers so they have the opportunity 

to compete and win globally on a level playing field. To do this, we 

must be tough with other countries that are violating international 

trade law to give their own companies an anti-competitive advantage. 


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V. CHANGES IN EXISTING LAW MADE BY THE BILL, 

AS REPORTED 

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new matter is printed in italic, and 

existing law in which no change is proposed is shown in roman): 

TRADE ACT OF 1974 

* * * * * * * 

TITLE I—NEGOTIATING AND OTHER 

AUTHORITY 

CHAPTER 8—IDENTIFICATION OF MARKET BARRIERS 

AND CERTAIN UNFAIR TRADE ACTIONS 

* * * * * * * 

SEC. 181. ESTIMATES OF BARRIERS TO MARKET ACCESS. 

(a) NATIONAL TRADE ESTIMATES.— 

(1) * * * 

* * * * * * * 

(3) INCLUSION OF CERTAIN DISCRIMINATORY LAWS, POLICIES, 

AND PRACTICES OF THE RUSSIAN FEDERATION.—For calendar 

year 2012 and each succeeding calendar year, the Trade Representative shall include in the analyses and estimates under 

paragraph (1) an identification and analysis of any laws, policies, or practices of the Russian Federation that deny fair and 

equitable market access to United States digital trade. 

ø(3)¿ (4) Annual revisions and updates * * * 

* * * * * * * 

Æ 


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