Know who you're dealing with - Australia's autonomous sanctions laws

Background

Autonomous sanctions are punitive measures imposed by the Australian Government as a matter of foreign policy on designated countries, entities and individuals.  Sanctioned countries include, but are not limited to, Iran, Syria, Zimbabwe, Libya, Fiji and North Korea.

Australian businesses wishing to do particular types of business in sanctioned countries, or with sanctioned entities or individuals, should be aware that restrictions may apply and unless such dealings are authorised by the Department of Foreign Affairs and Trade, they will be considered a serious criminal offence carrying serious penalties.

Sanctioned dealings

There are a range of dealings that, without authorisation, are prohibited.  These include:

• exporting and importing particular goods to and from sanctioned countries;

• providing services to a sanctioned country or to particular entities or individuals that assists with particular activities;

• engaging in particular types of business and engaging in investment dealings with designated entities and individuals;

• dealing with or making any assets available either directly or indirectly to designated entities or individuals (a labour hire arrangement or the supply of software through a reseller are likely to be caught under the broad definition of “asset”); and

• use of or dealing with a controlled asset (being an asset owned or controlled by a designated entity or individual).

Further information about sanctioned dealings with respect to each sanctioned country is available on the Australian Department of Foreign Affairs and Trade website.

Authorisation process

Australian entities or persons that wish to engage in a sanctioned dealing must obtain authorisation from the Department of Foreign Affairs and Trade.  This can be done using its Online Sanctions Administration Process (OSAP).  Care should be taken in lodging an application through the OSAP because there are penalties for providing false or misleading information.

Penalties

An unauthorised breach of the controls on trade in sanctioned goods and services, or dealings with designated individuals and entities, are serious criminal offences and upon conviction, the penalty for:

• individuals – is a maximum of 10 years’ imprisonment or a maximum fine of the greater of 3 times the value of the transaction in breach of sanctions (if this can be calculated) or $275,000. 

• bodies corporate – is a maximum fine of the greater of 3 times the value of the transaction in breach of sanctions (if this can be calculated) or $1.1million.

What this means for you

If you are a business or individual in Australia and you currently do, or you intend to do, business internationally, there are several things that you should do to protect you and your business, including:

• Check that there are no restrictions with respect to the country, entity or individual you intend dealing with.

• Review your arrangements regularly to confirm that new restrictions have not been added such that your dealings now require authorisation.

• Ensure that any contractual arrangement put in place includes appropriate termination rights in the event the arrangement subsequently becomes prohibited under Australia’s autonomous sanctions laws.

We can assist you with reviewing your current arrangements and advising you about your legal obligations.