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The world is seeing rapid changes to sanctions laws in response to Russia’s invasion of Ukraine. Australia is moving in lockstep with other countries imposing targeted financial sanctions and travel bans on Russian business and key individuals involved. This update summarises the Australian sanctions announced in response to the Russian invasion of Ukraine.
It is critical that businesses in Australia who have exposure to Russian trade or investment ensure that their sanctions compliance framework is up to date and they are ready to respond to further sanctions, as and when, they are introduced.
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 that their screening is up to date to reflect the most recent changes to designated persons and entities.
The Australian Government moved quickly to pass targeted financial sanctions and travel bans against a broad range of individuals and entities in response to Russia’s invasion of Ukraine. These sanctions have been described as the first phase of sanctions and the Government has publicly stated that it will continue to work with like-minded countries to impose further economic sanctions on Russia.
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:
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:
On 27 February, the Australian Government imposed sanctions on:
These designations came into effect on Monday, 28 February.
Designating a sitting head of state for targeted financial sanctions and travel bans is not unprecedented for the Australian Government; however, it is rare. This type of action is reserved for use against leaders of military regimes or those who do not have a legitimate claim to democratically elected power. President Putin now joins Australia’s blacklist of leaders who are or were subject to targeted financial sanctions including: Syria’s President, Bashar Al-Assad (still in effect), former President of Myanmar, Thein Sein (as he was then known) of Myanmar, Robert Mugabe of Zimbabwe, and Muammar Gaddafi of Libya.
Given the fast moving nature of this Russia and Ukraine sanctions regime, it is important to subscribe to updates to the Consolidated List and monitor updates to the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014.
The Australian Government has publicly announced its strong support for the further restrictive economic measures against key Russian banks, institutions and individuals enacted by the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States. In respect of the SWIFT measures to be implemented at a global level, the Australian Government is prepared to take complementary steps as required. For further information about the banning of Russian banks from SWIFT, please see update here.
From 28 March 2022, the Autonomous Sanctions Amendment (Ukraine Regions) Regulations 2022 will come into effect thereby extending the following restrictive measures currently applicable to Crimea and Sevastopol to the Donetsk and Luhansk regions:
The legislation includes the broader concept of a ‘specified Ukraine region’, allowing the Government to extend such measures to further regions in Ukraine, if required.
Clyde & Co is closely monitoring changes around the world. For our global update and to keep up to date with the latest sanctions developments that may affect your business, please visit our Geopolitical risks and sanctions hub.