AI is everywhere. It is a common conversation topic at dinner parties and conferences; it is being crammed into apps without regard to reason or utility and it appears to be the driving force in the world’s largest economy. Even, on LinkedIn, of all places, AI is unavoidable in these late days of 2025.
And so, too it is with sanctions compliance. The Australian Sanctions Office recently released a bevy of Advisory Notes regarding Australian sanctions laws, including one entitled “Sanctions risks from misuse of AI and new technologies ”(“the AI Advisory Note”).
The AI Advisory Note focusses on the risk that AI could be used to set up synthetic entities with distinct “digital characteristics and accompanying documentation”. Following on from that is the concern that AI could be used to produce fraudulent documents, “such as bills of lading, certificates of origin and packing lists” to evade sanctions.
Australian sanction laws work by prohibiting those subject to Australian jurisdiction – including, but not limited to, Australian citizens, residents and bodies corporate, no matter where in the world they operate – from engaging in certain conduct. Contravention of a sanctions law can result in significant penalties and imprisonment. These risks are acute for a body corporate where the offence for non-compliance is strict liability, meaning the contravention need not be intentional for the offence to be made out.
To balance that risk the Autonomous Sanctions Act 2011 gives a body corporate the opportunity to prove that they “took reasonable precautions, and exercised due diligence” to avoid contravention of a sanctions law, they may mitigate the risk of arising from inadvertent non-compliance.
No matter your view on future of the AI frenzy - whether it is a revolution or a glut, the emergent birth of a computer god or just a fancy text-predictor, Judgement Day or April fool’s - the risks highlighted in the AI Advisory Note are real and present. Are your compliance practices keeping step? Moulis Legal’s competition and regulatory compliance group is ready to assist.
