On 29 March 2022, the Australian Government announced the first set of ‘thematic sanctions’. The listings are effective from 30 March 2022.
The creation of the thematic sanctions framework was inspired by the ‘Magnitsky’ sanctions regimes adopted by the US, EU and Canada. So, it is fitting that the first tranche of designations imposes targeted sanctions against dozens of Russian individuals identified as responsible for the serious corruption and serious human rights violations uncovered by Sergei Magnitsky, the Ukrainian-born Russian lawyer and tax advisor who uncovered widespread corruption by Russian tax and law enforcement officials.
(For a detailed discussion of the thematic sanctions framework, please refer to our previous article 'Australia goes Magnitsky - foreign money never more dangerous').
However, Australia’s thematic sanctions can be viewed as something of a ‘Magnitsky Plus’ set of prohibitions. While they can be imposed in relation to serious corruption and serious human rights abuses, they are broader, allowing for the imposition of targeted financial sanctions on individuals and entities whose conduct relates to the ‘proliferation of weapons of mass destruction’ and ‘significant cyber incidents’.
The effect of designation is broadly to freeze the designated individual’s or entity’s assets. This is done by generally prohibiting those of us that fall within Australia’s jurisdiction from providing assets – a term which the legislation gives the broadest possible interpretation to – to the designated individual or entity, or dealing with assets owned or controlled by those designated parties. Designated individuals may also be subject to travel bans.
While these are the first thematic sanctions to be imposed, it has occurred against the backdrop of an unprecedented growth in the scale, scope, and complexity of Australia’s broader autonomous sanctions regimes. The Russian-facing sanctions regimes alone are updated on an almost daily basis.
The purpose of these laws is laudable. They are targeted at redressing situations of international concern which have implications for Australia’s national interest. This is achieved by proscribing, via the promise of significant fines and imprisonment, certain behaviour of Australian individuals and corporations, as well as that of individuals and entities with a connection to Australia. Given the increased focus on Australian sanctions, we can expect there to be increased enforcement activity. The impacts are real. Make sure you know exactly who your overseas customers are and remember that anything from an email to an invoice could cross the line.
This memo presents an overview and commentary of the subject matter. It is not provided in the context of a solicitor-client relationship and no duty of care is assumed or accepted. It does not constitute legal advice.
© Moulis Legal 2022