Autonomous Sanctions Amendment (Sanctioned Commercial Activity—Russia) Regulation 2015

Overview

The Autonomous Sanctions Amendment (Sanctioned Commercial Activity – Russia) Regulation 2015 was issued under the authority of the Minister for Foreign Affairs, pursuant to Section 28 of the Autonomous Sanctions Act 2011. This legislation was enacted to enable Australia to impose autonomous sanctions on specific entities or persons, thereby facilitating the conduct of Australia's relations with certain countries. The primary purpose of the 2015 Amendment Regulation is to refine the definition of "sanctioned commercial activity" in the context of sanctions against Russia. By clarifying that such activity includes making, or being part of any arrangement to make, loans or credit to entities specified in the regulations, the Amendment aims to provide greater precision and enforceability in the application of autonomous sanctions. The Autonomous Sanctions Amendment (Sanctioned Commercial Activity – Russia) Regulation 2015 does not require public consultation as it merely addresses a drafting clarification in the Autonomous Sanctions Amendment (Russia, Crimea and Sevastopol) Regulation 2015, which had undergone a public consultation process. This regulation ensures compatibility with human rights as it does not engage with, and is therefore compatible with, the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Autonomous Sanctions Amendment (Sanctioned Commercial Activity – Russia) Regulation 2015 applies to any person or entity within Australia or Australian territory, as well as to any Australian citizen or Australian permanent resident, regardless of their location. The Regulation extends to conduct and transactions that involve making loans or credit to entities specified in subregulation 5B(6) of the Principal Regulation, which are linked to the autonomous sanctions measures concerning Russia. The scope of the Act is national, affecting all individuals and entities subject to Australian jurisdiction. There are no exclusions or exemptions specified within the Regulation itself, but the Principal Regulations may provide for certain exclusions or exemptions based on specific criteria. The application of the Act may be further extended or restricted through subordinate instruments as deemed necessary or convenient for carrying out or giving effect to the Act. The Act does not engage with human rights as declared in relevant international instruments, thus maintaining compatibility with these standards.

Key Provisions

The Autonomous Sanctions Amendment (Sanctioned Commercial Activity – Russia) Regulation 2015 (the Regulation) amends the Autonomous Sanctions Regulations 2011 (the Principal Regulations) by clarifying the definition of ‘sanctioned commercial activity’ under subregulation 5B(3) of the Principal Regulations (section 1). Specifically, it adds that making loans or credit to entities specified in subregulation 5B(6) with a specified maturity period is also considered sanctioned commercial activity (section 1). The Regulation ensures that these activities, when directed towards sanctioned entities in Russia, are explicitly covered by the existing sanctions framework. The Regulation imposes obligations on entities and individuals within Australia to refrain from engaging in any commercial activities, including the provision of loans or credit, with entities specified under the sanctions regime against Russia. This includes ensuring that any business arrangements do not facilitate sanctioned commercial activity as defined under the amended subregulation 5B(3) (section 1). Entities must conduct due diligence to verify that their transactions do not contravene the specified sanctions, particularly in relation to financial services provided to entities listed under subregulation 5B(6). Breaches of the sanctions provisions can result in significant penalties. Under section 13 of the Autonomous Sanctions Act 2011, the maximum penalty for contravening the Act includes substantial fines and potential imprisonment. The exact penalties depend on the nature and severity of the breach, but they are designed to enforce compliance and deter non-compliance with the autonomous sanctions measures. Additionally, civil penalties may be imposed by the Australian Transaction Reports and Analysis Centre (AUSTRAC) for breaches related to financial sanctions, which can include significant monetary fines. The Regulation is made under the authority granted by section 28 of the Autonomous Sanctions Act, which allows the Governor-General to prescribe regulations necessary for the implementation of the Act (section 3). The Regulation commences on the day after its registration, as stated in section 2. The purpose of the Regulation is to ensure clarity and comprehensiveness in the application of sanctions against specified Russian entities, thereby aligning with Australia’s foreign policy objectives and international obligations.