Sanctions
Australian Sanctions announced in response to Russian invasion of Ukraine
01 March 2022
Update: More Australian Sanctions against Russia
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Legal Development 28 March 2022 28 March 2022
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Asia Pacific
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Crisis-Ukraine-Russia
Key takeaways
- Russian and Belarusian individuals and entities are subject to extensive asset freezes and travel bans under Australian law.
- The export of alumina, aluminium ores, and aluminium hydroxide to Russia is banned
- Australian businesses with ties to Russian energy or telecommunication industries need to assess their exposure to these sectors as specific sectoral sanctions will apply from 28 March 2022.
- Bans on the import of oil and other energy products from Russia will apply from 25 April 2022
- Australian businesses that may be affected by the sanctions should ensure they subscribe to updates from the Australian Sanctions Office and use the most recent Consolidated List of designated persons and entities.
Since our last update, international governments have imposed additional sanctions on Russian interests in response to the war in Ukraine. Joining the European Union, United States, Canada, United Kingdom, and Japan, Australia has introduced more sanctions against Russian oligarchs with links to mining industries and has moved to ban alumina exports to Russia.
Many countries have now moved to prohibit the import of oil and other energy products from Russia, thereby depriving Russia of revenue for its most valuable export commodity. Australia’s oil and energy sanctions will take effect on 25 April 2022.
Given the extensive sanctions already in place, it is critical steps are taken now to assess potential sanctions exposure and mitigate business continuity risks. As these sanctions bite, it is likely that Australian businesses will start seeing a knock-on effect including:
- Supply chain congestion causing delays on delivery;
- Increased transport costs;;
- Delays in financing, issuance/confirmation of letters of credit or insurance; and approval/renewals for any transactions directly or indirectly related to Russian parties.
To assist our clients in examining their risk exposure and to assess the breadth of the sanctions in place, we set out a consolidated summary of the current Australian sanctions below.
Australian sanctions law
Australia’s sanctions regime creates strict liability offences for directly or indirectly making an asset available to a designated person or entity, or for breaching sanctions in respect of trade in goods or services with a sanctioned region, entity or individual.
Therefore, with this expanded Russia and Ukraine sanctions regime, Australian businesses should ensure their screening is up to date to reflect the most recent changes to designated persons and entities.
Consolidation of targeted financial sanctions and travel bans
Currently, the Australian Government has targeted financial sanctions and travel bans against a broad range of individuals and entities in response to Russia’s invasion of Ukraine.
On 24 February 2022, in line with the UK, the Australian Government designated the following individuals and entities to be subject to targeted financial sanctions and travel bans, with an effective date of 25 February:
- Four financial institutions: IS Bank, GenBank, Promsvyazbank, and the Black Sea Bank for Development and Reconstruction; and
- 25 individuals, including members of the Duma, senior Russian governmental and military officials, and four entities involved in the development and sale of military technology and weapons namely Tactical Missiles Corporation, Kronshtadt, Rostec, and Rosoboronexport; and.
- Eight members of the Security Council of the Russian Federation.
On 25 February, in line with the EU, UK, and Canada, Australia imposed targeted financial sanctions and travel bans against another 339 members of the Duma who voted in favour of recognising the Ukrainian regions of Donetsk and Luhansk as independent republics (effective 26 February).
On 26 February, further targeted financial sanctions and travel bans were passed with an effective date of 27 February in respect of:
- Two key figures in charge of Belarusian defence and state policy; and
- Six entities (plus five of their directors) that are either linked to the Belarusian Armed Forces or Russian military, or that provide software for the use of surveillance and facial recognition technology used to persecute protestors for speaking against the Belarusian and Russian governments.
On 27 February, the Australian Government imposed sanctions on:
- The President of the Russian Federatio, Vladimir Putinn, and four of his senior officials including Sergei Lavrov (Foreign Minister), Vladimir Kolokoltsev (Minister for Internal Affairs), Mikhail Mishustin (Prime Minister) and Sergei Shoigu (Defence Minister).
On 13 March, more targeted financial sanctions and travel bans were imposed by the Australian Government on 33 persons including Russian oligarchs, political and economic elites (such as CEOs of large corporations including Gazprom), current and former members of the Russian Government and their immediate family members. The Government based the listing on the individuals’ involvement in state owned entities such as banks, natural resources and transport businesses and investment conglomerates who support the Russian Government’s strategic initiatives.
On 15 March, the Australian Government introduced sanctions targeting Russian companies and military complexes.
On 17 March, an additional two oligarchs were subject to travel bans and targeted financial sanctions. The Government made this listing given the relevant individuals’ key role in the Russian energy sector. In addition to these measures, the Government also listed 11 entities, all Russian financial institutions, for targeted financial sanctions.
On 25 March, the Australian Government listed more persons for targeted financial sanctions and travel bans including:
- 22 people linked to the Russian Government’s propaganda machine, including high ranking employees of state-owned television and radio stations, those receiving state funding for specific projects undermining Ukrainian sovereignty and employees of certain organisations associated with Russia’s Ministry of Foreign Affairs, Armed Forces or Federal Security Service;
- Belarusian President Alexander Lukashenko (including his wife, the First Lady of Belarus, and his son who previously held senior national security roles in the Belarussian Government), for what the Australian Government describes as his “central role in facilitating Russia’s invasion of Ukraine”; and
- A further 20 military and defence personnel within the Belarusian Ministry of Defence and the Belarusian Armed Forces, or who are Russian military commanders.
The Minister for Foreign Affairs and Trade, Senator Marise Payne, said in a media release that Australia would continue to impose sanctions on those "who bear responsibility or hold levers of power". Therefore, we can expect to see new targeted sanctions introduced as Australia and other allies identify more pro-Kremlin figures.
Given the fast moving nature of these sanctions regimes, it is important to subscribe to updates to both the Consolidated List and Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014.
Trade sanctions
In addition to the arms embargo that was already in place against Russia, the Australian Government has introduced further measures to restrict trade with Russia.
On 10 March, in what is likely to be the first of many sanctions targeting Russia’s sources of export revenue, the Australian Government designated a list of import sanctioned goods including oil, refined petroleum products, natural gas and coal. The import ban will come into effect on 25 April 2022 (being 45 days after the legislative instrument was registered).
The strict ban on imports of Russian oil, LNG and coal was done in lockstep with the United States and Canadian governments with the UK Government aiming to phase out Russian oil imports by the end of 2022.
On 19 March, in addition to the existing prohibition on the export of ‘arms or related matériel’ to, or for the benefit of, Russia, the Australian Government designated aluminium ores (e.g. Bauxite), aluminium oxide (e.g. , alumina) and aluminium hydroxide as export sanctioned goods. In practice, this means Australia prohibits the export of goods that are a key component in the manufacturing and development of weapons. The export ban came into effect on 20 March.
Clyde & Co is closely monitoring changes around the world. To keep up to date with the latest sanctions developments and to understand how they may affect your business, please visit our Geopolitical risks and sanctions hub.
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