EXPANSION TO AUSTRALIA’S SANCTIONS REGIME PASSED BY PARLIAMENT

As outlined in our previous update, the amendments expand Australia’s existing autonomous sanctions regime (which enabled Australia to sanction specific countries) to a regime where Australia can directly sanction individuals and entities for engaging in particular types of thematic conduct. The expansion aligns Australia with similar ‘Magnitsky’ style regimes that operate in the United States, United Kingdom, European Union and Canada.

In practice, this means that the Australian Government will be able to impose targeted financial sanctions and travel bans on entities and individuals who are responsible for, or complicit in, egregious conduct identified in the Regulations. This includes malicious cyber activity and corruption.

The amendments will take effect immediately after the Bill receives royal assent (which is typically between 7 to 10 working days). The Government has indicated that it will amend the Regulations once the bill is passed¹ and has released an exposure draft of the amendments (Draft Regulations).

As outlined in our previous update, the thematic sanctions regime creates additional exposure risks which companies should be prepared for including by ensuring sanctions screening processes and compliance programs are reviewed to ensure compliance with the Draft Regulations. Experience from the United Kingdom, European Union and United States affirms a heightened global focus on human rights, which is becoming increasingly important in compliance programs.

KEY CHANGES TO THE AUTONOMOUS SANCTIONS REGIME

The Bill and Draft Regulations implement key aspects of the Government’s response to the report released in December 2020 by the Parliamentary Joint Standing Committee on Foreign Affairs, Defence and Trade (Committee), which we outlined in our previous update.

The Act has been amended to include:

• a non-exhaustive list of matters that the autonomous sanctions regime may address under the Regulations; and
• a decision-making process which requires the Foreign Minister to consult with, and obtain the approval of, the Attorney General prior to imposing any thematic sanctions.

In addition to the existing themes relating to weapons of mass destruction, threats to international peace and security and human rights abuses, the Draft Regulations introduce three new thematic regimes targeting malicious cyber activity; serious violations / abuses of human rights and activities undermining good governance or the rule of law (including serious corruption). Under the Act, additional thematic categories may be included in the Regulations, including in relation to serious violations of international humanitarian law,² if the Government deems them necessary.