In a tightening global security environment, the Australian government has increased its focus on sanctions, including ushering in new Magnitsky-style reforms to Australia’s sanctions laws at the end of last year. Given the limited enforcement in this area in Australia to date and the likely varying standards of compliance across industries and sectors, we see this area as ripe for further regulatory scrutiny. As such, companies and organizations will be best placed to defend any future regulatory action or class action exposure by reviewing and uplifting their policies, processes, and procedures for identifying and addressing sanctions risk now.
The Australian Government
Australia implements United Nations Security Counsel (UNSC) sanctions regimes as a member of the UN, primarily under the Charter of the United Nations Act 1945, and its regulations, and the Australian autonomous sanctions regime, primarily under the Autonomous Sanctions Act 2011 and Autonomous Sanctions Regulations 2011. Australian sanction-related laws implement the United Nations Security Council (UNSC) sanctions regimes and Australian autonomous sanctions regimes.
The Australian Sanctions Regime, seeks to address situations of international concern by imposing measures, including the following:
- Restrictions on the trade in goods and services
- Restrictions on engaging in commercial activities
- Targeted financial sanctions on the designated entities and persons
- Travel bans imposed on certain persons.
The Minister for Foreign Affairs delegate may be able to grant a sanctions permit authorizing an activity that would otherwise contravene the sanction laws of Australia.
Sanctions regimes impose different criteria to be satisfied before the Minister or the Minister delegate may grant a permit of sanctions. Conditions to sanctions permit to be attached. Contravening Australian sanctions-related laws can be a serious criminal offense. Penalties include prison and fines for individuals, and bodies corporate. Australian sanctions laws apply broadly, including to activities in Australia, and overseas by Australian citizens, and Australian-registered bodies corporate.
Sanctions are punitive or coercive measures imposed on other states or international organizations by states or international organizations. Sanctions restrict activities related to specific countries or organizations, goods and services, themes of conduct, or individuals and entities. They may consist of diplomatic or economic measures though generally do not involve the direct use of armed force. Australia imposes two types of sanctions: sanctions imposed as a result of Australia’s UN membership and sanctions imposed autonomously by the Australian Government.