Autonomous SanctionsReform of Australia’s Legislative Framework

Sanctions and Transnational CrimeDepartment of Foreign Affairs and Trade

sanctions@dfat.gov.auhttp://www.dfat.gov.au/un/unsc_sanctions/index.html

What are sanctions?

•coercive measures not involving the use of armed force;

•imposed in response to situations of international concern (eg, threat to / breach of international peace and security, including WMD proliferation and terrorism, or widespread human rights abuses);

•either by the United Nations Security Council (and binding on all UN Members);

•or autonomously by one or more states acting in concert (“autonomous sanctions”).

What are the objectives of sanctions?

•limit adverse consequences of the situation (eg, deny access to arms, or WMD dual use goods);

•seek to influence those responsible for creating the situation of international concern to modify their behaviour to remove the concern; and

•penalise those responsible (eg, deny access to international travel or to the international financial system).

What is the basis of sanctions?

• Sanctions can be imposed by the United Nations Security Council (UNSC)

– in response to threats to or breaches of international peace and security

– all UN Member States are obliged to implement

• Sanctions can be imposed by states autonomously of the UNSC (autonomous sanctions)

– in situations where the UNSC cannot impose sanctions– or to supplement UNSC sanctions measures

How are sanctions given effect in Australia?

•Sanctions imposed by the UNSC are given legal effect in Australia through the Charter of the United Nations Act 1945.

• provides for declaration of laws as “UN sanction enforcement laws”• provides for making of dedicated regulations to apply UNSC sanctions

•Australia’s autonomous sanctions will soon be given legal effect through the Autonomous Sanctions Act 2011.

• provides for declaration of laws as “sanctions laws”• provides for making of dedicated regulations to apply autonomous

sanctions

Autonomous Sanctions Act 2011

Rationale

• allow greater flexibility in the range of measures Australia can apply, to ensure Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded countries.

• assist administration and compliance by removing distinctions between the scope and extent of autonomous sanctions and UN sanction enforcement laws.

• provide a framework for regulations applying autonomous sanctions allowing the necessary flexibility to respond to international developments in a timely way.

Providing for autonomous sanctions (Part 2)

• the Minister may specify a provision of a law of the Commonwealth as a “sanction law” by legislative instrument (s. 6).

• such provisions may either be:– purpose made in regulations made under the Act (s. 10, 28) ; or– an existing law that can be used for autonomous sanctions purposes

• any permit under sanctions regulations obtained using false or misleading information is deemed null and void ab initio (s.15)

Enforcing autonomous sanctions (Part 3)

• offence to contravene a sanction law or a condition in a permit granted under a sanction law (s.16)– for individuals: maximum 10 years imprisonment and a fine the

greater of $275,000 or three times the transaction value– for bodies corporate: a fine the greater of $1.1 million or three

times the transaction value (strict liability offence)• offence to provide false or misleading information in connection with

the administration of sanctions laws, including permit applications (s.17)

Collection and use of information (Part 4)

• allow sanctions enforcement agencies to compel the production of written information and documents, including under oath (s.19, 20)– 12 months imprisonment for failure to comply (s.21)– overrides any inconsistent Commonwealth, State or Territory law

and the privilege against self incrimination– cannot be used in evidence (except for alleged breaches of s.17 –

false and misleading information – or s.21 – failure to comply with notice) (s.22)

• allow Commonwealth agencies to provide sanctions enforcement agencies with information relevant to sanctions (s.18)

• allow sanction enforcement agencies to share information with a range of other entities for sanctions-related purposes (s.24)

Autonomous Sanctions Regulations

Autonomous Sanctions Regulations will give effect to Australia’s existing autonomous sanctions regimes:

•Burma: arms embargo / targeted financial sanctions / travel bans•Democratic People’s Republic of Korea: targeted financial sanctions / port bans•Fiji: arms embargo / travel bans•Former Yugoslavia: targeted financial sanctions / travel bans•Iran: arms embargo and chem-bio dual use goods / targeted financial sanctions / travel bans•Libya: targeted financial sanctions / travel bans•Syria: arms embargo / targeted financial sanctions / travel bans•Zimbabwe: arms embargo / targeted financial sanctions / travel bans

Part 2 Autonomous sanctionsAutonomous Sanctions Regulations 2011

Export sanctioned goods

for Burma, Fiji, Syria, Zimbabwe•arms or related matériel (including weapons, ammunition, military vehicles and equipment, spare parts and accessories for these, paramilitary equipment)

for Iran•arms or related matériel•goods mentioned in the Australia Group Common Control Lists (of chemical weapons precursors, dual-use chemical / biological manufacturing facilities and equipment and related technology and software, biological agents, and plant and animal pathogens)

The Minister may, by legislative instrument, designate goods as export sanctioned goods for a country mentioned in the designation

Sanctioned supply

A person makes a sanctioned supply if:

(a) the person supplies, sells or transfers goods to another person; and(b) the goods are export sanctioned goods in relation to a country; and(c) as a direct or indirect result of the supply, sale or transfer the goods are transferred:(i) to that country; or(ii) for use in that country; or(iii) for the benefit of that country.

Sanctioned service

A sanctioned service, for Burma, Fiji, Iran, Syria and Zimbabwe, is the provision to a person of:

(a) technical advice, assistance or training; or(b) financial assistance; or(c) a financial service; or(d) another service;

if it assists with, or is provided in relation to:

•An activity involving the supply, sale, transfer, manufacture, maintenance or use of an export sanctioned good; or

•A military activity.

Designation of persons or entities

The Minister may, by legislative instrument:

•designate a person or entity mentioned in an item of the table.

•designate a person or entity if the Minister is satisfied that the person or entity is contributing to the proliferation of weapons of mass destruction.

•designate an asset that is owned or controlled by a designated person or entity as a designated asset.

In designating a person or entity, the Minister may specify the purpose :•to prevent the designated person from travelling to Australia•to restrict dealings in listed assets for the designated person or entity.

Sanctioned vessels

Designation of vessels The Minister may, by legislative instrument, designate a vessel, or each vessel in a class of vessels, as a sanctioned vessel for a country mentioned in the designation. Directions to sanctioned vessels The Minister, having regard to Australia’s obligations at international law, may direct a sanctioned vessel to: (a) leave Australia, including by a particular route; or(b) not enter a particular port or place, or any port or place, in Australia.

Designation duration and revocation

A designation ceases to have effect on: the third anniversary of its taking effect, unless the Minister, by legislative instrument, declares that the designation continues to have effect, in which case; the third anniversary of the making of the most recent declaration in relation to the designation.

The Minister may, by legislative instrument, revoke a designation on his / her initiative, or on application by the designated person or entity to which the designation relates (or the owner or controller of the sanctioned vessel)

An application to revoke a designation must be in writing and set out the circumstances relied upon to justify the application. The Minister is not required to consider an application (the current application) by a person or entity under this regulation if the person or entity has made an application under this regulation within 1 year before the current application.

Part 3 Sanctions lawsAutonomous Sanctions Regulations 2011

Prohibitions: goods / services

Prohibitions relating to a sanctioned supply

A person contravenes the Regulations if the person makes a sanctioned supply that is not authorised.

Prohibitions relating to the provision of sanctioned services

A person contravenes the Regulations if the person provides a sanctioned service that is either: •not authorised; or •not provided in relation to an authorised sanctioned supply.

Prohibitions: goods / services

The Regulations apply to:

•any person in Australia;•any person using an Australian flagged vessel or aircraft;•any Australian citizen or body corporate anywhere in the world•any Australian body corporate, in relation to the actions of another body corporate or entity, wherever incorporated or situated, over whose actions it has effective control

Targeted financial sanctions

Prohibition of dealing with designated persons or entities A person contravenes the Regulations if the person directly or indirectly makes an asset available to, or for the benefit of, a designated person or entity without authorisation. Prohibition of dealing with controlled assets A person who holds a controlled asset contravenes the Regulations if the person uses or deals with it, or allows it to be used or dealt with, or facilitates the use of the asset or dealing with it, without authorisation.

Prohibitions: sanctioned vessels

A person contravenes the Regulations if he or she contravenes a direction given to a sanctioned vessel unless: •the contravening act was necessary to secure the safety of the sanctioned vessel or human life; or •the contravening act was authorised or required under Part IIIAAA of the Defence Act 1903. A sanctioned vessel that contravenes a direction other than under these circumstances is forfeited to the Commonwealth.

Part 4 AuthorisationsAutonomous Sanctions Regulations 2011

Minister may grant permits

The Minister, on his or her own initiative, or on application by a person, and subject to specified conditions, may authorise: (a) the making of a sanctioned supply; or(b) the provision of a sanctioned service; or(c) the making available of an asset to a designated person or entity; or(d) a use of, or a dealing with, a controlled asset if satisfied that it would be in the national interest to do so.

Permit for assets and controlled assets

An application for authorisation to make available an asset to a person or entity, or to use or deal with a controlled asset, must be:

(a) for basic expenses (eg food, accommodation, medical, taxes, insurance, utilities, reasonable professional fees, legal expenses); or(b) legally required (judicial, administrative or arbitral lien or judgment made prior to the designation and not for the benefit of a designated person); or(c) a contractual dealing (interest or other earnings due on accounts holding controlled assets; or payments required under contracts made before the designation).

The above limitation applies only to applications for authorisation.

Part 5 Dealing with assetsAutonomous Sanctions Regulations 2011

Consolidated list

Advance notice of listing of persons, entities and assets DFAT may give notice of a designation before it is published to any person who is engaged in the business of holding, dealing in, or facilitating dealing in, assets. Consolidated list of entities, persons and assets DFAT must maintain, on its website, a document that sets out all designated persons, entities and assets. The document may be consolidated with the consolidated list provided for in the Charter of the United Nations (Dealing with Assets) Regulations 2008.

Notice to AFP

Informing AFP of opinion about asset A person who holds an asset he or she believes is, or was, a controlled asset, must inform the AFP as soon as practicable. Request to AFP for help A person who suspects he or she holds a controlled asset may request the AFP to help determine whether or not the asset is owned or controlled by a designated person or entity. (This does not limit reporting obligations under the Financial Transaction Reports Act 1988 or the Anti Money Laundering and ‑Counter Terrorism Financing Act 2006‑ .)

Who needs to be aware of sanctions laws?

• persons engaged in trade or other business in a country subject to sanctions, or with individuals in (or close to) government in such a country;

• persons involved in the trade in armaments or other equipment for armed forces (manufacturers, brokers, freight forwarders, trade financiers);

• persons involved in the provision of services related to military activities, or to any person on the manufacture of use of military equipment;

• persons who deal in assets (in particular, the financial services sector)

Sanctions due diligence

Transactions involving a sanctions-affected country

•enhanced precautions are required to ensure the transaction does not involve unauthorised goods, services and persons subject to sanctions for that country

Transactions involving goods or services subject to sanctions

• sanctions prohibit the direct or indirect provision of prohibited goods / services to the sanctioned country

• enhanced precautions are required to mitigate the risk of diversion to the sanctioned country

Transactions involving sanctions-designated persons / entities

• prohibition applies equally to persons acting on behalf or at the direction of, or entities owned or controlled by, such persons / entities