US Enforces Magnitsky Act Against Brazil: What to Expect Now?
- Antonio Carlos Faustino
- Jul 30
- 2 min read
Did you know that a US law can freeze Brazilian assets and bar their entry into the US? Last week, the United States activated the Magnitsky Act against influential Brazilian figures. This seismic move reconfigures bilateral relations and directly affects investors. Here, we uncover the underlying principles of the sanctions and their practical impacts.
What is the Magnitsky Act?
Created in 2012 after the death of Russian auditor Sergei Magnitsky, the law allows the US to punish individuals involved in:
- Serious human rights violations
- Transnational corruption
- Antidemocratic activities
According to the State Department, it aims to "promote accountability" (USA, 2016). It's not just about freezing assets: it blocks visas, makes dollar-denominated business impossible, and isolates targets globally.
Why was Brazil targeted?
Wall Street Journal sources point to two key reasons:
1. Systemic corruption in federal public contracts.
2. Environmental violations in the Amazon linked to politicians.
A Human Rights Watch report (2023) cited "structural impunity" as a trigger. The names have not yet been released, but rumors point to:
- Magistrates
- Parliamentarians
- Business leaders
> "It's a clear message: the US will not tolerate predatory elites," analyzes Carla Araújo, professor of International Relations at USP.
Immediate Impacts
⚖️ In Politics
- Diplomatic crisis: Itamaraty has already summoned the American ambassador.
- Internal wear and tear: Targets will have their names publicly exposed via the Federal Register.
- Chain reaction: United Kingdom and Canada may adopt similar sanctions.
💸 In Economics
- Fall in investments: Companies with sanctioned partners lose access to Western markets.
- Devaluation of the real: Financial speculation puts pressure on the currency.
- Sector risk: Commodities (soybeans, ore) may suffer from non-tariff barriers.
Crucial fact : Countries under Magnitsky had an average reduction of 2.3% in GDP in the first year (IMF, 2022).
Long-Term Consequences
- Geopolitical isolation : Brazil could lose space in the G20 and OECD.
- Capital flight: Investors fear "contamination" in joint ventures.
- Demonstration effect: Other leaders under investigation will be pressured.
A leak from the Central Bank reveals: banks already anticipate a 15% increase in the cost of international loans.
What to Expect Now?
1. Official publication of sanctioned names within 30 days.
2. Brazilian counter-sanctions (e.g., taxation of American tech companies).
3. Judicial pressure: STF can annul mandates of punished politicians.
> "It's the biggest threat to sovereignty since Snowden," warns former Foreign Minister Celso Amorim in an interview with Folha.
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