Presentation on theme: "Autonomous Sanctions Reform of Australia’s Legislative Framework"— Presentation transcript:
1 Autonomous Sanctions Reform of Australia’s Legislative Framework Sanctions and Transnational CrimeDepartment of Foreign Affairs and Trade
2 What are sanctions?coercive measures not involving the use of armed force;imposed in response to situations of international concern (eg, threat to / breach of international peace and security, including WMD proliferation and terrorism, or widespread human rights abuses);either by the United Nations Security Council (and binding on all UN Members);or autonomously by one or more states acting in concert (“autonomous sanctions”).Sanctions are a key tool in international diplomacy. They are coercive measures not involving the use of armed force which are imposed in response to situations of international concern. Such situations include the grave repression of the human rights or democratic freedoms of a population by a government, or the proliferation of weapons of mass destruction (WMD) or their means of delivery, or internal or international armed conflict, or terrorism.Examples include Iran’s failure to cooperate fully with the International Atomic Energy Agency (IAEA) to enable it to confirm Iran’s nuclear program is exclusively for peaceful purposes; North Korea’s missile and nuclear tests; the Mugabe regime in Zimbabwe; the December 2006 military coup in Fiji, that robbed the population of Fiji of their constitutional rights and has seen the sustained abuse of basic freedoms, including the suppression of press freedom; the September 2007 violent crackdown on pro-democracy protestors by the military regime in Burma, and the ongoing disrespect for the human rights and democratic aspirations of the Burmese people.
3 What are the objectives of sanctions? limit adverse consequences of the situation (eg, deny access to arms, or WMD dual use goods);seek to influence those responsible for creating the situation of international concern to modify their behaviour to remove the concern; andpenalise those responsible (eg, deny access to international travel or to the international financial system).Sanctions measures are intended to achieve three objectives:(a) to limit the adverse consequences of the situation of international concern (for example, by denying access to military or paramilitary goods, or to goods, technologies or funding that are enabling the pursuit of programs of proliferation concern);(b) to seek to influence those responsible for giving rise to the situation of international concern to modify their behaviour to remove the concern (by motivating them to adopt different policies); and(c) to penalise those responsible (for example, by denying access to international travel or to the international financial system).Autonomous sanctions are highly targeted measures, applied only to the specific governments, individuals or entities (in the form of targeted financial sanctions and travel bans), or to the specific goods and services (such as military goods or goods with a WMD dual use), that are responsible for, or have a nexus to, the situation of international concern. They are applied so as to minimise, to the extent possible, the impact on the general populations of the affected countries.
4 What is the basis of sanctions? Sanctions can be imposed by the United Nations Security Council (UNSC)in response to threats to or breaches of international peace and securityall UN Member States are obliged to implementSanctions can be imposed by states autonomously of the UNSC (autonomous sanctions)in situations where the UNSC cannot impose sanctionsor to supplement UNSC sanctions measures
5 How are sanctions given effect in Australia? Sanctions imposed by the UNSC are given legal effect in Australia through the Charter of the United Nations Act 1945.provides for declaration of laws as “UN sanction enforcement laws”provides for making of dedicated regulations to apply UNSC sanctionsAustralia’s autonomous sanctions will soon be given legal effect through the Autonomous Sanctions Act 2011.provides for declaration of laws as “sanctions laws”provides for making of dedicated regulations to apply autonomous sanctions
7 Rationaleallow greater flexibility in the range of measures Australia can apply, to ensure Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded countries.assist administration and compliance by removing distinctions between the scope and extent of autonomous sanctions and UN sanction enforcement laws.provide a framework for regulations applying autonomous sanctions allowing the necessary flexibility to respond to international developments in a timely way.Australia has actively applied autonomous sanctions as a foreign policy tool for a number of years, relying on existing instruments, intended for other purposes. Autonomous targeted financial sanctions are applied under the Banking (Foreign Exchange) Regulations 1959, which were originally promulgated for the protection of Australia’s currency and regulation of our foreign currency reserves. Autonomous arms embargoes are applied under the Customs (Prohibited Exports) Regulations 1958, meaning that they can only apply to tangible goods exported from Australia; they do not apply to intangibles – like software – or to military services.To achieve more effectively the objectives underlying imposing autonomous sanctions, including the need to participate in concerted international action involving other, like-minded countries, the types of measures Australia would wish to implement are likely to go beyond the scope of these instruments. The purpose of the Bill is to strengthen Australia’s autonomous sanctions regime by allowing greater flexibility in the range of measures Australia can implement, thus ensuring Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded states. The Bill will also assist the administration of, and compliance with, sanctions measures by removing distinctions between the scope and extent of autonomous sanctions and UN sanction enforcement laws. The Bill is modelled on the legislation with which Australia implements United Nations Security Council sanctions, the Charter of the United Nations Act It is therefore a framework, which includes provision for the establishment of laws imposing autonomous sanctions measures (known as sanctions laws), provision for the enforcement of those laws (including through the imposition of criminal penalties for contravention of sanctions laws) and provision for obtaining, using and sharing information to monitor compliance with sanctions laws.It does not, however, include the specific sanctions measures itself. Instead, it provides for sanctions laws to be primarily applied by regulations made under the Bill. This is critically important for the effectiveness of the Bill, and of Australia’s national interest in the imposition of autonomous sanctions measures. Allowing these measures to be applied by regulations will allow the necessary flexibility for the Government to respond to fluid and rapidly changing international developments in a timely way. By providing for autonomous sanctions measures to be applied by regulation, rather than under the Bill itself, the Bill will allow the necessary flexibility for the Government to respond to international developments in a timely way. It will also enable the Government to harmonise the administration of autonomous sanctions and UN sanction enforcement laws, and simplify compliance arrangements for those entities whose business requires a regular and active engagement with the operation of such laws.
8 Providing for autonomous sanctions (Part 2) the Minister may specify a provision of a law of the Commonwealth as a “sanction law” by legislative instrument (s. 6).such provisions may either be:purpose made in regulations made under the Act (s. 10, 28) ; oran existing law that can be used for autonomous sanctions purposesany permit under sanctions regulations obtained using false or misleading information is deemed null and void ab initio (s.15)The Bill will continue to allow other Commonwealth laws to be used to apply autonomous sanctions where this is necessary. It will, however, require the Minister for Foreign Affairs to specify, in a legislative instrument, any law – including those in regulations made under the Bill – that is to be applied as a sanction law. This will ensure greater certainty and transparency in terms of compliance with Australia’s sanctions laws.
9 Enforcing autonomous sanctions (Part 3) offence to contravene a sanction law or a condition in a permit granted under a sanction law (s.16)for individuals: maximum 10 years imprisonment and a fine the greater of $275,000 or three times the transaction valuefor bodies corporate: a fine the greater of $1.1 million or three times the transaction value (strict liability offence)offence to provide false or misleading information in connection with the administration of sanctions laws, including permit applications (s.17)In terms of enforcement of autonomous sanctions, the Bill applies measures for contravening, or for providing false and misleading information in relation to, sanctions laws specified under the Bill. These are identical to those that apply to UN sanction enforcement laws specified under the Charter of the United Nations Act 1945.
10 Collection and use of information (Part 4) allow sanctions enforcement agencies to compel the production of written information and documents, including under oath (s.19, 20)12 months imprisonment for failure to comply (s.21)overrides any inconsistent Commonwealth, State or Territory law and the privilege against self incriminationcannot be used in evidence (except for alleged breaches of s.17 – false and misleading information – or s.21 – failure to comply with notice) (s.22)allow Commonwealth agencies to provide sanctions enforcement agencies with information relevant to sanctions (s.18)allow sanction enforcement agencies to share information with a range of other entities for sanctions-related purposes (s.24)The Bill will facilitate access to information for purposes associated with the administration of sanction laws by removing impediments for the sharing of such information within the Commonwealth, and allowing specially designated Commonwealth entities, responsible for the administration and enforcement of sanction laws, to require, by written notice, the production of documents and written information – including under oath – from persons outside of government in order to determine whether a sanction law is being complied with.
14 Export sanctioned goods for Burma, Fiji, Syria, Zimbabwearms or related matériel (including weapons, ammunition, military vehicles and equipment, spare parts and accessories for these, paramilitary equipment)for Iranarms or related matérielgoods mentioned in the Australia Group Common Control Lists (of chemical weapons precursors, dual-use chemical / biological manufacturing facilities and equipment and related technology and software, biological agents, and plant and animal pathogens)The Minister may, by legislative instrument, designate goods as export sanctioned goods for a country mentioned in the designation
15 Sanctioned supply A person makes a sanctioned supply if: (a) the person supplies, sells or transfers goods to another person; and(b) the goods are export sanctioned goods in relation to a country; and(c) as a direct or indirect result of the supply, sale or transfer the goods are transferred:(i) to that country; or(ii) for use in that country; or(iii) for the benefit of that country.
16 Sanctioned serviceA sanctioned service, for Burma, Fiji, Iran, Syria and Zimbabwe, is the provision to a person of:(a) technical advice, assistance or training; or(b) financial assistance; or(c) a financial service; or(d) another service;if it assists with, or is provided in relation to:An activity involving the supply, sale, transfer, manufacture, maintenance or use of an export sanctioned good; orA military activity.
17 Designation of persons or entities The Minister may, by legislative instrument:designate a person or entity mentioned in an item of the table.designate a person or entity if the Minister is satisfied that the person or entity is contributing to the proliferation of weapons of mass destruction.designate an asset that is owned or controlled by a designated person or entity as a designated asset.In designating a person or entity, the Minister may specify the purpose :to prevent the designated person from travelling to Australiato restrict dealings in listed assets for the designated person or entity.
18 Sanctioned vesselsDesignation of vessels The Minister may, by legislative instrument, designate a vessel, or each vessel in a class of vessels, as a sanctioned vessel for a country mentioned in the designation. Directions to sanctioned vessels The Minister, having regard to Australia’s obligations at international law, may direct a sanctioned vessel to: (a) leave Australia, including by a particular route; or (b) not enter a particular port or place, or any port or place, in Australia.
19 Designation duration and revocation A designation ceases to have effect on: the third anniversary of its taking effect, unless the Minister, by legislative instrument, declares that the designation continues to have effect, in which case; the third anniversary of the making of the most recent declaration in relation to the designation.The Minister may, by legislative instrument, revoke a designation on his / her initiative, or on application by the designated person or entity to which the designation relates (or the owner or controller of the sanctioned vessel)An application to revoke a designation must be in writing and set out the circumstances relied upon to justify the application. The Minister is not required to consider an application (the current application) by a person or entity under this regulation if the person or entity has made an application under this regulation within 1 year before the current application.
20 Autonomous Sanctions Regulations 2011 Part 3 Sanctions laws
21 Prohibitions: goods / services Prohibitions relating to a sanctioned supplyA person contravenes the Regulations if the person makes a sanctioned supply that is not authorised.Prohibitions relating to the provision of sanctioned servicesA person contravenes the Regulations if the person provides a sanctioned service that is either:not authorised; ornot provided in relation to an authorised sanctioned supply.
22 Prohibitions: goods / services The Regulations apply to:any person in Australia;any person using an Australian flagged vessel or aircraft;any Australian citizen or body corporate anywhere in the worldany Australian body corporate, in relation to the actions of another body corporate or entity, wherever incorporated or situated, over whose actions it has effective control
23 Targeted financial sanctions Prohibition of dealing with designated persons or entities A person contravenes the Regulations if the person directly or indirectly makes an asset available to, or for the benefit of, a designated person or entity without authorisation. Prohibition of dealing with controlled assets A person who holds a controlled asset contravenes the Regulations if the person uses or deals with it, or allows it to be used or dealt with, or facilitates the use of the asset or dealing with it, without authorisation.
24 Prohibitions: sanctioned vessels A person contravenes the Regulations if he or she contravenes a direction given to a sanctioned vessel unless:the contravening act was necessary to secure the safety of the sanctioned vessel or human life; orthe contravening act was authorised or required under Part IIIAAA of the Defence Act 1903.A sanctioned vessel that contravenes a direction other than under these circumstances is forfeited to the Commonwealth.
25 Autonomous Sanctions Regulations 2011 Part 4 Authorisations
26 Minister may grant permits The Minister, on his or her own initiative, or on application by a person, and subject to specified conditions, may authorise: (a) the making of a sanctioned supply; or (b) the provision of a sanctioned service; or (c) the making available of an asset to a designated person or entity; or (d) a use of, or a dealing with, a controlled asset if satisfied that it would be in the national interest to do so.
27 Permit for assets and controlled assets An application for authorisation to make available an asset to a person or entity, or to use or deal with a controlled asset, must be: (a) for basic expenses (eg food, accommodation, medical, taxes, insurance, utilities, reasonable professional fees, legal expenses); or (b) legally required (judicial, administrative or arbitral lien or judgment made prior to the designation and not for the benefit of a designated person); or (c) a contractual dealing (interest or other earnings due on accounts holding controlled assets; or payments required under contracts made before the designation). The above limitation applies only to applications for authorisation.
28 Part 5 Dealing with assets Autonomous Sanctions Regulations 2011Part 5 Dealing with assets
29 Consolidated listAdvance notice of listing of persons, entities and assetsDFAT may give notice of a designation before it is published to any person who is engaged in the business of holding, dealing in, or facilitating dealing in, assets.Consolidated list of entities, persons and assetsDFAT must maintain, on its website, a document that sets out all designated persons, entities and assets. The document may be consolidated with the consolidated list provided for in the Charter of the United Nations (Dealing with Assets) Regulations 2008.
30 Notice to AFPInforming AFP of opinion about asset A person who holds an asset he or she believes is, or was, a controlled asset, must inform the AFP as soon as practicable. Request to AFP for help A person who suspects he or she holds a controlled asset may request the AFP to help determine whether or not the asset is owned or controlled by a designated person or entity. (This does not limit reporting obligations under the Financial Transaction Reports Act 1988 or the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006.)
31 Who needs to be aware of sanctions laws? persons engaged in trade or other business in a country subject to sanctions, or with individuals in (or close to) government in such a country;persons involved in the trade in armaments or other equipment for armed forces (manufacturers, brokers, freight forwarders, trade financiers);persons involved in the provision of services related to military activities, or to any person on the manufacture of use of military equipment;persons who deal in assets (in particular, the financial services sector)
32 Sanctions due diligence Transactions involving a sanctions-affected countryenhanced precautions are required to ensure the transaction does not involve unauthorised goods, services and persons subject to sanctions for that countryTransactions involving goods or services subject to sanctionssanctions prohibit the direct or indirect provision of prohibited goods / services to the sanctioned countryenhanced precautions are required to mitigate the risk of diversion to the sanctioned countryTransactions involving sanctions-designated persons / entitiesprohibition applies equally to persons acting on behalf or at the direction of, or entities owned or controlled by, such persons / entities