Sanctions Tracker – Australian Update on Sanctions Responses to the situation in Ukraine

This post provides an update regarding recent Ukraine-related sanctions measures in Australia. Our previous posts discuss various sanctions measures adopted by the US, EU, UK and Australia on 4 February, 11 February, 23 February and 24 February.

On 24 February 2022, the Australian Government introduced a number of amendments to the Autonomous Sanctions Regulations 2011 (Cth)[1] imposing sanctions against “Russian individuals, organisations and banks as part of the international effort to impose a sharp cost on Russia for its unprovoked and unacceptable aggression against Ukraine.”[2]

Sanctions imposed on individuals and entities

Under the first phase of sanctions announced on 23 February 2022, Australia has imposed travel bans and targeted financial sanctions on eight members of the Security Council of the Russian Federation.[3] These individuals were described as being “responsible for providing policy approval for Russia’s recognition of the so-called Donetsk People’s Republic and the Luhansk People’s Republic on 21 February 2022.”[4]

The second phase of sanctions, announced on 24 February 2022, include financial sanctions against four financial institutions,[5] an additional 25 persons and four entities who have been responsible “for formulating and executing security-related policies and providing weapons and strategic advice.”[6] The persons include “army commanders, deputy defence ministers and Russian mercenaries” and entities which are “involved in the development and sale of military technology and weapons”.[7] The targeted financial institutions include IS Bank, Genbank, Black Sea Bank for Development and Reconstructions, and Promsvyazbank (which are all also subject to sanctions by the UK).[8]

The sanctions have immediate effect from today, 25 February 2022.

As a result of these sanctions, the consolidated Ukraine List now includes 60 entities and 204 individuals.

The targeted sanctions: [9]

• prohibit assets being made available, either directly or indirectly, to, or for the benefit of, a designated person or entity;
• require persons holding assets that are owned or controlled by a designated person or entity to freeze that asset;
• prohibit designated persons from travelling to or entering Australia.

Sanctions extended to Luhansk and Donetsk

In addition, the Autonomous Sanctions Amendment (Ukraine Regions) Regulations 2022 extends the existing Crimea and Sevastopol autonomous sanctions regime  to apply to the Luhansk and Donetsk regions from 28 March 2022.[10] Under the Regulations, Luhansk and Donetsk will also be subject to the restrictions currently imposed on Crimea and Sevastopol, including:

• the export or supply of certain goods relating to the creation, acquisition or development of infrastructure for the transport, telecommunications or energy sectors, the exploitation of oil, gas or mineral reserves;
• the import, purchase or transport of certain goods including arms related material;
• certain commercial activities including the grant of loans or credit or establishing a joint venture relating to the creation, acquisition or development of infrastructure in transport, telecommunications or energy sectors or the exploitation of oil or gas, or of specified mineral resources;
• the provision of certain services including, for example, financial assistance or financial services which relate to goods originating in or exported from the region;
• providing assets to designated persons or entities; and
• dealing with the assets of designated persons or entities.

The restrictions to Luhansk and Donetsk target the “transport, energy, telecommunications, oil, gas and minerals sectors”. They will take effect from 28 March 2022 to give Australian businesses and individuals an opportunity to incorporate these sanctions, either by ceasing activities or applying to the Minister for Foreign Affairs for a sanctions permit.[11]  

Australia also further amended the Autonomous Sanctions Regulations 2011 (Cth) under the Autonomous Sanctions Amendment (Russia) Regulations 2022.[12] This creates new listing criteria under the autonomous sanctions regime, which expands the scope for persons and entities to be given targeted financial sanctions and travel bans, including to capture persons and entities of “strategic and economic significance to Russia”.

Further Sanctions expected

On 25 February 2022, the Prime Minister announced that further sanctions would be imposed against the “300 members of Russia’s parliament” and “Russian oligarchs…whose economic weight is of strategic significance.”

Further developments in line with the US, UK and EU are expected. The Prime Minister also foreshadowed at the press conference on 25 February 2022 that Australia was working with the US to coordinate sanctions against “key Belarusian individuals and entities complicit in the aggression, so we are extending those sanctions to Belarus.”

We will continue to monitor developments in this area and encourage you to subscribe to be kept informed of latest developments. Please contact the authors or your usual Herbert Smith Freehills contacts for more information.

[1] Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 1) Instrument 2022; Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 2) Instrument 2022; Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 3) Instrument 2022.

[2] Scott Morrison and Marise Payne, ‘Australia’s response to Russia’s aggression against Ukraine’ (Joint media statement, 23 February 2022) available at <https://www.foreignminister.gov.au/minister/marise-payne/media-release/australias-response-russias-aggression-against-ukraine>.

[3] Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 1) Instrument 2022.

[4] Ibid, Explanatory Statement.

[5] Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 3) Instrument 2022.

[6] Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 2) Instrument 2022, Explanatory Statement.

[7] Scott Morrison, ‘Press Conference Sydney, Transcript’ (Press Release, 24 February 2022) available at <https://www.pm.gov.au/media/press-conference-sydney-nsw-11>.

[8] The Foreign Minister’s announcement on 23 February 2022 indicated that sanctions would also be applied to Rossiya Bank, however it was not listed in the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 3) Instrument 2022.

[9] See, Autonomous Sanctions Regulations 2011 (Cth), Part 3; Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Ukraine) Amendment (No. 1) Instrument 2022, Explanatory Statement.

[10] Autonomous Sanctions Amendment (Ukraine Regions) Regulations 2022 (Cth).

[11] Department of Foreign Affairs and Trade, ‘Russia sanctions regime’ (Web Page, accessed 25 February 2022), available at <https://www.dfat.gov.au/international-relations/security/sanctions/sanctions-regimes/russia-sanctions-regime>.

[12] Autonomous Sanctions Amendment (Russia) Regulations 2022 (Cth).