15 12월 2021 Rachel Nicolson  -  Christopher Kerrigan  - Andrew Wilcock -  Cindy McNair BusinessCrimeLinks

Magnitsky and beyond: Australia amends its sanctions laws to join the global Magnitsky movement and target other forms of transnational crime

As recently reported by Allens, earlier this month, the Australian Government amended the Autonomous Sanctions Act 2011 (Cth) (“ASA”) to allow it to impose targeted financial sanctions and travel bans on serious human rights abusers and parties associated with them, wherever they are located (also known as 'Magnitsky sanctions').

The amendments also allow the Australian Government to impose targeted sanctions with respect to other transnational issues of concern under a new 'thematic' approach, including:

  • activities undermining good governance or the rule of law, including serious corruption;
  • serious violations of international humanitarian law;
  • malicious cyber activity;
  • the proliferation of weapons of mass destruction; and
  • other threats to international peace and security.

These reforms mark a major shift in Australia's approach to its sanctions programs, which have been predominantly state-focused in scope to date. The Australian amendments also provide for a relatively wide range of thematic sanctions in comparison to other jurisdictions.

Who must comply with Australian sanctions?
  • Australian sanctions laws have extraterritorial application, and can apply in relation to:
  • activities occurring wholly or partly in Australia;
  • conduct by Australian citizens, residents and entities, regardless of where in the world it occurs; and
  • in many circumstances, conduct by overseas subsidiaries of Australian entities.
What will happen next?
  • Development of listing criteria. The Australian Government will shortly adopt regulations setting out the specific criteria pursuant to which the Minister for Foreign Affairs and Trade will be able to designate individuals and entities under the new 'thematic' sanctions programs dealing with cyber, corruption and human rights. Regulations setting out listing criteria for 'international humanitarian law' and 'international peace and security' programs are expected to follow separately. There will be little recourse for an individual or entity to challenge an Australian sanctions designation, beyond applying to the Minister to have their designation revoked or seeking an administrative law remedy.
  • Review of amendments within three years. The operation of the amendments will be reviewed by a parliamentary committee (the Joint Standing Committee on Foreign Affairs, Defence and Trade) within three years of commencement of the legislation.
Comment

It is expected that the Australian Government will make extensive use of this power, following the trend seen in some other jurisdictions.

The reforms will permit greater sanctions policy coordination between Australia and key international allies such as the United Kingdom and United States (the latter having already identified increased multilateral coordination as a key area of focus in a recent review).

We expect that a broader range of companies will need to consider the application of Australia's sanctions laws to their operations, given the wide spectrum of individuals and entities that are likely to be designated under the new regime.