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Publication
Australia’s sanctions regime for Russia and specified Ukraine regions
The sanctions imposed by the Australian Government in response to Russia’s invasion of Ukraine continue to expand.
Australia | Publication | June 2023
The Australian Government is implementing a new round of sanctions against Russia and Russia-controlled areas of Ukraine. The new sanctions include a proposed ban on exports of machinery and related parts; as well as further financial sanctions on specific entities, sectors, and industries. Australian companies are advised to review their global supply chains and practices to ensure they can comply with the new financial sanctions. Companies should also consider contributing a submission to the Department of Foreign Affairs and Trade to inform the design and implementation of the export ban. |
In late May 2023, the Australian Government announced a new round of sanctions on Russia comprising financial sanctions targeting, inter alia, 21 Russian entities as well as certain economic sectors and industries, particularly energy, gold, steel and banking.
The Australian Government also announced a forthcoming ban on the export of machinery and related parts to Russia and areas of Ukraine currently under Russian control.
These sanctions measures represent the latest in a series of sanctions imposed by the Australian Government in response to Russia’s invasion of Ukraine since February 2022. They are stated to be targeted at disrupting Russia’s ability to source key military materials, reducing international reliance on Russian energy resources, closing loopholes used to avoid existing sanctions and undermining Russia’s access to the global financial system.
The Australian Government has imposed new financial sanctions targeting, inter alia, 21 Russian entities as well as certain economic sectors and industries, particularly energy, gold, steel and banking.
Consistent with Australia’s existing sanctions against Russia, this new round of financial sanctions applies to Australian citizens, entities incorporated in Australia, Australian registered body cooperates and Australian flagged vessels both in respect of their activities in Australia and their activities abroad.
It is a serious criminal offence to directly or indirectly provide assets to, or deal with the assets of, a person or entity subject to Australia’s financial sanctions. Penalties include a maximum sentence of up to 10 years’ imprisonment for individuals, and substantial fines for both individuals and bodies corporate.
To ensure they can comply with all operative sanctions including this latest round, Australian companies and individuals should be seeking advice on the following steps:
The export ban will be implemented by the Australian Government following a round of public consultations. The Department of Foreign Affairs and Trade (DFAT) has commenced public consultations on the design and implementation of the export ban.
Companies should be aware that the export ban:
The scope of the export ban may catch some companies by surprise. For example:
The ban may also have an impact on day to day operations. For example:
Companies should also consider the implications of the export ban on their existing contractual arrangements. Further information can be found in our article Australia’s Sanctions Regime for Russia and Specified Ukraine Regions: How to Avoid Being stuck between an Arbitration and a Sanction.
Australian companies should proactively review their supply chains now to assess how their products and operations could be affected. The ban follows similar bans being imposed by other countries, and companies with cross border operations and supply chains should be seeking advice on all export bans imposed by governments within their supply chains and corporate structures.
Companies should consider making a submission to DFAT. Companies have until 19 June to make submissions to DFAT on the export ban. It is anticipated that design of the ban will be finalised in July with implementation to follow shortly afterwards. Once the export ban is in place, exporting goods subject to the ban will be prohibited unless the exporter has a sanctions permit.
If your operations are covered or affected by the ban, you should seek advice and consider proactively applying to the Australian Sanctions Office for a permit. You can refer to our Australian Sanctions Briefing for more detailed guidance.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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