Allens has published guidance to support Australian businesses following the passage of amendments to Australia’s autonomous sanctions framework. The amendments could result in the proliferation of Australian sanctions and more dispersed sanctions compliance risk for Australian businesses.
These sanction – which will be applied as economic, financial and trade restrictions – will target serious corruption, serious human rights violations, serious violations of international humanitarian law, malicious cyber activity, the proliferation of weapons of mass destruction, and other threats to international peace and security.
Corruption, is identified as:
“the promising, offering, giving, solicitation or acceptance of public-sector bribes, or the misappropriation or other diversion of state property, where such conduct is ‘serious’ having regard to the status or position of the persons or entities involved, the nature, extent and impact of the conduct, and the circumstances in which the conduct occurred. The Explanatory Memorandum identifies as examples of sanctions conduct ‘serious corruption which results in a country’s population being deprived of vital public resources’ and ‘the misappropriation of state property of significant value as part of a systemic fraudulent scheme’.”Rachel Nicolson and Andrew Wilcock, ‘Long-awaited sanctions reform may result in more dispersed sanctions risk’, Allens Insight, 8 December 2021.
The implications of these reforms for Australian businesses will depend upon the extent to which the Federal Government imposes thematic sanctions. It is likely that compliance risks will become more dispersed as thematic sanctions will distribute risk beyond individual countries.
“businesses that have not adopted sanctions compliance systems on the basis that they do not operate in sanctioned jurisdictions should now consider doing so, and organisations that only screen counterparties and transactions with connections to sanctioned jurisdictions should consider applying screening measures in a broader set of circumstances.”Rachel Nicolson and Andrew Wilcock, ‘Long-awaited sanctions reform may result in more dispersed sanctions risk’, Allens Insight, 8 December 2021.
Learn more about the reforms and the likely consequences of the reform for Australian businesses here.