Australian Sanctions announced in response to Russian invasion of Ukraine
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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:
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.
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.
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:
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:
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:
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.
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.