By no means a new weapon, Australia has once again utilised its sanction regime in view of recent horrific events in Ukraine. Whilst a world away geographically, the practical effects of these rapidly changing sanctions should not be overlooked by Australian businesses. With statutory penalties including significant fines of over $2,000,000, Australian business owners and operators ought to be aware of their potential application.

Statutory Obligations

The Foreign Minister's capacity to implement international sanctions is governed by the Autonomous Sanctions Act 2011 (Cth) (the Act) and the Autonomous Sanctions Regulations 2011 (Cth) (the Regulations). The Regulations formally set out prohibitions in relation to certain dealings with persons or entities named on the Federal Government's 'Consolidated Sanctions List'. Under the Regulations, a person or body corporate must not (amongst other things), engage in a sanctioned commercial activity, service, or supply or import.

A sanctioned commercial activity is taken to include the direct or indirect purchase or sale of bonds, equity, transferable securities and providing loans or credit by an entity specified under the Regulations.1 Additionally, a person who engages in the development of transport, telecommunications, energy or mineral resources in a Ukrainian region as specified under the Regulations, will have engaged in a sanctioned commercial activity. For the purposes of a sanctioned commercial activity, entities include:

  1. a major financial institution incorporated in Russia;
  2. a body corporate incorporated in Russia and predominantly engaged in the transportation or development of crude oil, petroleum products, or military equipment; or
  3. a body corporate incorporated outside of Australia with a 50% ownership by a sanctioned entity.2

A sanctioned service will relate to the provision of technical or financial services (including advice) that assists a party in sanctioned supply (see below).3 The scope of sanctioned services is also taken to include the support of Russian oil exploration either in resources projects or offshore sourcing.4

Lastly, Australian businesses should be cautious of the Regulations' requirement not to engage in sanctioned supply or import. A person is said to have made a sanctioned supply if (amongst other things):

  1. the person supplies, sells or transfers goods to another person; and
  2. the goods are 'export sanctioned goods' in relation to a country; and
  3. as a direct or indirect result of the supply, sale or transfer, the goods are transferred to that country or for their benefit.5

Businesses with shareholdings or connections to a sanctioned entity or person may be stopped from distributing any potential dividends to sanctioned entities, or proceeding with transactions that purport to provide a sanctioned service, sanctioned commercial activity or import and supply.

Keeping up

Since 25 February 2022, there have been numerous Autonomous Sanctions Designations that have varied – and invariably widened – the scope of sanctioned activities.6

Businesses cannot assume that these updates will also be as broadly published in mainstream media as has been the case recently. Given the difficulty keeping up, businesses engaging in activities in relation to critical commodities/industries, or with players resident in, or with known connections to Russia, would be prudent to keep a close eye on the Federal Government's announcements.

Australian businesses concerned about a potential connection to a sanctioned entity or activity should:

  1. consult the Consolidated Sanctions List for any direct relation;
  2. review any of the business' contracts, considering related parties and the scope of the works to be undertaken;
  3. consult their business structure and those of contractual partners;
  4. engage directly with the Department of Foreign Affairs and Trade (DFAT) to demonstrate transparent and cooperative behaviour. Such behaviour will be important should DFAT or the Foreign Minister form a more expansive view of the sanction's regime; and
  5. seek legal advice.


1 Autonomous Sanctions Regulations 2011 (Cth) section 5B.

2 Ibid section 5B(6).

3 Ibid section 5.

4 Ibid section 5(6).

5 Ibid section 4(1).

6 Autonomous Sanctions (Export Sanctioned Goods – Russia) Amendment (No 1) Designation 2022; Autonomous Sanctions (Export Sanctioned Goods – Russia) Designation 2022; Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) Amendment (No 1) Instrument 2022.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.