High profile objections against debilitating economic sanctions imposed on Russian citizens have caused Australia’s foreign affairs and trade department, “DFAT”, to rethink the ambiguous and uninformative regulations on which sanctions are based.
Earlier this year the regulations were clarified to allow past conduct or past company or government seniority to be a legitimate reason to impose a sanction, overcoming past tense/present tense confusion in the original wording. It was also made clear that the failure of the Minister to think hard enough about her or his decision (“failure to exercise discretion”) was not fatal to the sanction concerned.
Now, to lock the gate even more tightly, the three-year expiry rule has been removed, meaning that sanctions, including existing ones, will continue until specifically revoked. Such a “set and forget” approach would easily lead to the vocalisation of civil liberty and administrative fairness concerns in any other context. Further changes are expected as a result of public consultations on Australia’s sanction laws, a process kicked off almost two years ago only reported by DFAT last week. With the objective of ensuring that Australia’s laws are “fit for purpose and easier to understand”, these areas of reform have caught DFAT’s attention:
- clarifying what key sanctions terms mean, and adding new definitions such as comingled goods and de minimis
- listing considerations the Minister may think about to decide if a permit (to bypass a sanction) is in the national interest
- introducing general permits not only for lawyers advising on sanctions, as is presently the case, but for other categories of persons, e.g. humanitarian agencies
- introducing civil (court-ordered) and administrative (regulator-imposed) penalties, as regulatory tools for non-compliance.
Alexandra Abramov, Oleg Deripaska, and Dmitriy Mazepin may be the “high profile” complainants against Australian sanctions imposed on them, but there are more than 1,200 others also affected. The sheer numbers, business impatience as time goes by, and the realisation that a court can order fines of up to AUD825k for individuals and AUD3.3m for companies who “get it wrong”, have maintained the demand for sanctions advice from Moulis Legal’s regulatory team at a high level. Everything from caviar to corporate assets – and not only those “in” Russia – are in the firing line. Please reach out to Alistair Bridges, Jessica Giovanelli, or Emily Schilling if you identify a Russian connection in your next cross-border transaction, whether inbound or outbound.
