Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022

Administered by Department of Foreign Affairs and Trade

Legislation au F2022L00235 Not in force Legislative Instrument

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Explanatory Statement

 

Issued by the Authority of the Minister for Foreign Affairs

 

Autonomous Sanctions Regulations 2011

 

Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022

 

Autonomous sanctions are measures not involving the use of armed force which a government imposes as a matter of foreign policy in response to situations of international concern, including where there are, or have been, threats to the sovereignty and territorial integrity of a State.

 

The Autonomous Sanctions Regulations 2011 (the Regulations) make provision for, amongst other things, the proscription of persons or entities for autonomous sanctions in relation to Russia. Regulation 6 of the Regulations enables the Minister for Foreign Affairs (the Minister) to designate a person or entity for targeted financial sanctions, including if the Minister is satisfied that the person or entity is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia (paragraph (a) of item 6A of the table at regulation 6 (the Russia listing criteria)).

 

The purpose of a designation is to subject the designated person or entity to targeted financial sanctions. There are two components to targeted financial sanctions under the Regulations:

 

  • a designated person or entity becomes the object of the prohibition in regulation 14 (which prohibits directly or indirectly making an asset available to, or for the benefit of, a designated person or entity, other than as authorised by a permit granted under regulation 18); and/or
  • an asset owned or controlled by a designated person or entity is a ‘controlled asset’, subject to the prohibition in regulation 15 (which requires a person who holds a controlled asset to freeze that asset, by prohibiting that person from either using or dealing with that asset, or allowing it to be used or dealt with, or facilitating the use of or dealing with it, other than as authorised by a permit granted under regulation 18).

 

Designated and declared persons, and designated entities, in relation to Russia and Ukraine are listed in the Autonomous Sanctions (Designated and Declared Persons – Russia and Ukraine) List 2014 (the 2014 List).

 

In accordance with regulation 6, the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 (the Instrument) lists seven entities for targeted financial sanctions under the Russia listing criteria. These entities are Russian banks, investment funds and include the Central Bank of the Russian Federation and an export credit agency. The Minister made the designations being satisfied that each entity is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

 

Under subregulations 9(1) and (2) of the Regulations, designations and declarations that are made under regulation 6 of the Regulations cease to have effect three years after the date on which they took effect, unless the Minister declares they are to continue pursuant to subregulation 9(3).

 

Details of the Instrument which amends the 2014 List are set out at Attachment A.

 

The legal framework for the imposition of autonomous sanctions by Australia, of which the Regulations and the 2014 List are part, was the subject of extensive consultation with governmental and non-governmental stakeholders when introduced. The new sanctions being imposed through the making of the Instrument were subject to targeted consultation within government and with relevant international partners.

 

In order to meet the policy objective of prohibiting unauthorised financial transactions involving the entities designated in the Instrument, the Minister is satisfied that wider consultations beyond those already undertaken would not be appropriate or practicable (subsections 17(1) and (2) of the Legislation Act 2003). Consultation is not appropriate in the circumstances in order to enable Australia to act swiftly in response to threats to the sovereignty and territorial integrity of Ukraine posed by these entities and to strengthen the impact of sanctions on Russia. Additionally, consultation would risk alerting entities to the impending sanctions and enabling capital flight before assets can be frozen.

 

The Office of Best Practice Regulation (OBPR) has advised that a Regulation Impact Statement is not required for listing instruments (OBPR reference: 26252).


Attachment A

 

Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022

Section 1

The title of the instrument is the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 (the Instrument).

 

Section 2

The instrument commences the day after it is registered.

 

Section 3

The instrument is made under paragraph 6(a) of the Autonomous Sanctions Regulations 2011.

 

Section 4

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

 

Schedule 1

 

Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014

 

Item 1 – Part 2 of Schedule 2 (at the end of the table)

 

The entities listed in Part 2 of Schedule 2 are designated by the Minister as a designated person or entity (as defined in Regulation 3 of the Regulations) for Russia for the purposes of paragraph 6(a) of the Regulations. These entities are Russian banks, investment funds and an export credit agency. The Minister made the designations being satisfied that each of the entities are, or have been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

 

 

 


Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022

 

The Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 (the Instrument) is 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.

 

Australia’s autonomous sanctions regimes impose highly targeted measures in response to situations of international concern, including where there are, or have been, threats to the sovereignty and territorial integrity of a State. Given the serious nature of the threats to the sovereignty and territorial integrity of Ukraine, the Government considers that targeted financial sanctions are the most effective and least rights-restrictive way to achieve its legitimate foreign policy objective of signalling Australia’s concerns about the situation in Ukraine. These sanctions allow a targeted response to Australia’s concerns relating to Russia’s unprovoked and completely unjustified attack on Ukraine, by imposing a cost on Russia and seeking to influence the Russian state to de-escalate the situation.

 

Thus, the autonomous sanctions designations and declarations made by this Instrument pursue legitimate objectives and have appropriate safeguards in place to ensure that any limitation on human rights engaged by the imposition of sanctions is a reasonable, necessary and proportionate response to the situation of international concern, and do not affect particularly vulnerable groups. The Government keeps its sanctions regimes under regular review, including in relation to whether more effective, less rights‑restrictive means are available to achieve similar foreign policy objectives.

 

The Autonomous Sanctions Regulations 2011 (the Regulations) make provision for, amongst other things, the proscription of persons or entities for autonomous sanctions. The Instrument, made under regulation 6 of the Regulations, designates entities for targeted financial sanctions. The Minister made the designations being satisfied that the entities are, or have been, engaging in an activity or performing a function that is of economic or strategic significance to Russia (paragraph (a) of item 6A of the table at regulation 6).

 

As this Instrument relates to the designation of entities for targeted financial sanctions, humans are only affected insofar as they are prohibited from making an asset available to, or for the benefit of, the designated entity or from making an asset which they own or control to be used with or dealt with by a designated entity. This does not engage any of the applicable rights or freedoms.

 

Conclusion

 

The Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 is a legislative instrument enacted by the Australian government to address the threat to Ukraine's sovereignty and territorial integrity posed by Russia. This instrument was developed under the Autonomous Sanctions Regulations 2011, which provide the framework for imposing targeted financial sanctions in response to international concerns. The Minister for Foreign Affairs made the designations under Regulation 6 of the Regulations, satisfied that the designated entities are, or have been, engaging in activities of economic or strategic significance to Russia. The purpose of these sanctions is to impose a cost on Russia and to signal Australia's concerns about the situation in Ukraine. The Instrument lists seven Russian entities, including banks, investment funds, and an export credit agency, for targeted financial sanctions. These measures prohibit making assets available to or for the benefit of the designated entities and require the freezing of assets owned or controlled by these entities. The sanctions designations aim to achieve the policy objective of prohibiting unauthorised financial transactions involving these entities, which was deemed to be swift and effective in response to the ongoing threats to Ukraine. The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required for this listing instrument. The Government assures that these sanctions are compatible with human rights, as they do not engage any of the applicable rights or freedoms.

Scope and Application

The Autonomous Sanctions Regulations 2011 and the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 pertain to the designation of specific entities for targeted financial sanctions under Australia's autonomous sanctions regime. This regime is implemented in response to international concerns, particularly threats to the sovereignty and territorial integrity of Ukraine. The Regulations empower the Minister for Foreign Affairs to proscribe individuals or entities for targeted financial sanctions if they are deemed to be, or have been, engaging in activities or functions of economic or strategic significance to Russia. The Instrument, made under regulation 6 of the Regulations, lists entities such as Russian banks, investment funds, and an export credit agency for these sanctions. The primary effect of these sanctions is the prohibition of making assets available to, or for the benefit of, the designated entities and the freezing of assets owned or controlled by them. The Instrument applies to entities within Australia and to Australians abroad, effectively imposing a national reach. The sanctions cease to have effect three years after the date of their imposition unless extended by the Minister. The making of the Instrument was subject to targeted consultations within government and with international partners, and the Office of Best Practice Regulation advised that a Regulation Impact Statement was not required. The Statement of Compatibility with Human Rights confirms that the Instrument is compatible with human rights and does not engage any of the applicable rights or freedoms as it targets entities and not individuals directly.

Key Provisions

The main operative sections of the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 3) Instrument 2022 are those that amend the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) List 2014, specifically under Schedule 1, Item 1, Part 2. This amendment adds seven new entities, including Russian banks, investment funds and an export credit agency, to the list of designated persons or entities for Russia, which is subject to targeted financial sanctions. These sanctions include a prohibition on making assets available to or for the benefit of the designated entities and the freezing of any assets they own or control, unless authorised by a permit under regulation 18 of the Autonomous Sanctions Regulations 2011. The obligations imposed by the Instrument on parties and entities include compliance with the prohibitions outlined in the Regulations. Any person found to be in breach of the prohibitions on making assets available to, or for the benefit of, a designated entity, or on using or dealing with a controlled asset, may face civil or criminal consequences. The Regulations also require that the designated entities and their assets are clearly identified and that any transactions involving these entities or their assets are closely monitored to ensure compliance with the sanctions. The Instrument imposes civil and criminal penalties for breaches of the Regulations. Under section 21 of the Autonomous Sanctions Regulations 2011, a person who contravenes a provision of the Regulations is liable to a penalty. The maximum penalty for a corporation is $525,000, and for an individual, it is $105,000 or imprisonment for five years, or both. Additionally, under section 22 of the Regulations, a court may make an order for the forfeiture of any benefit obtained by the person as a result of the contravention. The Instrument's compatibility with human rights is also considered, as it ensures that the sanctions are targeted and proportionate, and do not disproportionately affect vulnerable groups.

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