Autonomous Sanctions Act 2011: Breaches and implications
In this article, Partner Ian Hughes and Special Counsel Hui Ling Dean in HopgoodGanim's Dispute Resolution and Litigation practice discuss the Autonomous Sanctions Act 2011 (Cth) and liability for criminal offences to be committed, using Russia as a case study. Our team at HopgoodGanim delivers exceptional outcomes for financial crime and corporate investigations, with Hui Ling and Ian advising on corporate anti-money laundering and proceeds of crime litigation.
Sanction laws form a part of Australia’s AML legislative framework.
The Autonomous Sanctions Act 2011 (Cth) ( Sanctions Act ) is used by Australia to enforce the United Nations’ Security Council sanctions. Sanctions restrict or prohibit making a supply, import, providing a service or engaging in commercial activity and dealing with a designated person or entity.
The Sanctions Act creates strict liability for a serious criminal offence, with penalties of up to 10 years imprisonment and substantial fines.1
Before its invasion of Ukraine, Russia was already subject to sanctions by Australia 2 and further economic sanctions against Russia took effect from 28 March 2022, including additional restrictions on the trade of certain goods and services with Russia, Crimea, Sevastopol and the (separatist) Donetsk and Luhansk regions of Ukraine.
The current sanctions now prohibit activities involving direct or indirect export to Russia of the following:
There are now sanctions on the imports, purchase, or transport of:
There are also sanctions on certain commercial activities, such as a prohibition on dealing with any financial instrument issued by, or to provide loans or credit to:
To complement these sanctions, certain services are also now prohibited:
Companies and individuals trading with parties potentially involved in any sanctioned activities or assets or entities now need to be confident they are not unwittingly being used as part of an affected supply chain. 4
Where breaches of the Sanctions Act and, in turn, the Code, amount to ‘serious offences,’ a Proceeds of Crime Authority may commence civil proceedings under the Proceeds of Crime Act 2002 (Cth) ( POCA ), which specifically targets the proceeds of money laundering. POCA to seek forfeiture orders for the entire value of assets involved in the transaction.
Another aspect of sanctions involves assets owned or controlled by ‘sanctioned’ persons and entities.
The Consolidated List5 ( List ) maintained by the Australian Sanctions Office identifies all persons and entities who are subject to targeted sanctions in Australia. The List can include foreigners in Australia as well as Australian citizens and residents here and abroad. For instance, Russian oligarchs on the List include, Alisher Usmanov, Gennady Timchenko, Vagit Alekperov and Arkady Lisin.
A party dealing with an asset that is owned or controlled by a Listed person or entity must freeze it and inform the AFP as soon as possible pursuant to regulation 23 and 24 of the Autonomous Sanctions Regulations 2011( Sanctions Regulations ). ‘Asset’ is broadly defined in section 4 of the Sanctions Act and includes funds that have been deposited into Australia to purchase real estate on by, or on behalf of, the person or entity on the List.
Making an asset available to the person or entity on the List is a contravention of regulation 15 of the Sanctions Regulations, which attracts the penalties in section 16 of the Sanctions Act and, in turn the Code and because the contravention constitutes a ‘serious offence’ - the POCA may also be enlivened.
Find out more about HopgoodGanim's Dispute Resolution and Litigation practice. Our dispute resolution team includes both general commercial litigation practitioners as well as industry expert practitioners in the areas of banking and finance, intellectual property, technology, digital assets, resources and energy, construction, hospitality, environment and planning, taxation, employment law and property.
The team covers financial crime and corporate investigations, with Hui Ling and Ian advising on corporate anti-money laundering and proceeds of crime litigation. All of our practitioners are focused on helping clients achieve exceptional outcomes.
This article is part of our content series, 'The money laundering deck: AML and counter-terrorism financing laws'. The series uses Russia as a case study to provide an analogy for how businesses can be impacted by AML and counter-terrorism financing laws while operating in Australia. Read the related articles in the series here:
1. A maximum fine of $555,000 for an individual, or a fine of $2.2 million or 3 times the value of the transaction for a body corporate in breach of the sanction laws, whichever is greater and/or up to 10 years imprisonment pursuant to section 16 of the Sanctions Act.
2. They were first imposed in 2014, because Russia invade Crimea in 2014, and extended in 2015 and 2022.
5. https://www.dfat.gov.au/sites/default/files/regulation8_consolidated.xls. The Australian Sanctions Office (ASO) maintains the list and updates it regularly. You can subscribe to their mailing list to ensure you are reviewing the current List.