Explanatory Statement

Issued by the Authority of the Minister for Foreign Affairs

Charter of the United Nations Act 1945

Charter of the United Nations (Sanctions – Iran) (Specified Entities) List 2010

The Charter of the United Nations (Sanctions – Iran) Regulations 2008 (the Regulations) commenced on 24 March 2008. The purpose of the Regulations is to implement Australia’s obligations under United Nations Security Council (UNSC) resolutions 1737 (23 December 2006), 1747 (24 March 2007), 1803 (3 March 2008) and 1929 (9 June 2010) to impose sanctions in relation to Iran.

In paragraph 22 of resolution 1929, the UNSC decided that all States shall require their nationals, persons subject to their jurisdiction and firms incorporated in their territory or subject to their jurisdiction to exercise vigilance when doing business with entities incorporated in Iran or subject to Iran’s jurisdiction, including those of the Islamic Revolutionary Guard Corps (IRGC) and the Islamic Republic of Iran Shipping Lines (IRISL), and any individuals or entities acting on their behalf or at their direction, and entities owned or controlled by them, including through illicit means, if they have information that provides reasonable grounds to believe that such business could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems or to violations of resolutions 1737, 1747, 1803 or 1929.

Regulations 17E and 17F of the Regulations give effect to this obligation.  Subregulation 17E (3) provides that the Minister must specify an entity, by legislative instrument, if the Minister has reasonable grounds to believe that the entity is incorporated in Iran or subject to Iran’s jurisdiction and that unauthorised business with the entity may contribute to Iran’s proliferation sensitive nuclear or missile activities or to violations of resolutions 1737, 1747, 1803 and 1929. 

Subregulation 17E (2) of the Regulations provides that a person referred to in subregulation 17E (1) (that is, an Australian national or body corporate, or a person or entity subject to Australia’s jurisdiction) must not conduct business with a specified entity, or an entity acting on behalf of, or at the direction of, or owned or controlled by, the specified entity, other than in accordance with an authorisation granted by the Minister for Foreign Affairs under regulation 17F.  Subregulation 17F (2) provides that the Minister must not authorise such business if the Minister has reasonable grounds to believe the business may in fact contribute to Iran’s proliferation sensitive nuclear or missile activities or to violations of resolutions 1737, 1747, 1803 or 1929.

The Charter of the United Nations (Sanctions – Iran) (Specified Entities) List 2010 (the Specified Entities List) includes entities specified by the Minister pursuant to subregulation 17E (3) of the Regulations.  The specified entities are listed in Schedule 1 of the Specified Entities List and are classified into five categories. These categories are in turn based on classes of entities directly identified in resolution 1929 as requiring vigilance owing to the risk that business with them could contribute to Iran’s proliferation-sensitive nuclear activities, or the development of nuclear weapon delivery systems, or to violations of sanctions. 

The categories are:

(a) Entities linked with Iran’s nuclear and ballistic missile programs;

(b) Islamic Revolutionary Guard Corps entities;

(c) Transportation sector entities;

(d) Financial services entities; and

(e) Energy sector entities.

Section 5 of the Specified Entities List provides that:

“the date on which a listing of a specified entity (“the relevant entity”) takes effect shall be:

(a) for a person referred to in subregulation 17E(1) of the Regulations who is already conducting business with the relevant entity on the date on which the relevant entity was listed (the listing date), the thirtieth day following the listing date; or

(b) in all other circumstances, the listing date.”

This allows a person referred to in subregulation 17E(1) of the Regulations who is already conducting business with a specified entity on the day the entity is specified to have 30 days from the date the entity is specified to either apply for authorisation to carry on that particular business or wind up all dealings with the specified entity.

If the person applies for authorisation to carry on the business, he or she will be issued, immediately upon receipt of the application for authorisation, a provisional permit (to cover the period in which the application is assessed pursuant to regulation 17F of the Regulations) subject to the following minimum conditions:

• nothing in the permit authorises the company to engage in conduct otherwise prohibited by a UN sanction enforcement law;
• the company must not conduct new business with the specified entity.

For the avoidance of doubt, nothing in subparagraph 5 (a) of the Specified Entities List authorises a person referred to in subregulation 17E (1) of the Regulations who is not already conducting business with a specified entity on the day the entity is specified to initiate business with such an entity without first applying for authorisation to do so.

Interdepartmental and industry consultations were undertaken during the preparations of the Regulations. Public consultations on the implementation of regulations made under the Charter of the United Nations Act 1945 are conducted annually. No specific public consultation was undertaken in relation to the Specified Entities List as it implements Australia’s international legal obligations arising from decisions of the United Nations Security Council.

The resolutions were adopted under Article 41 of Chapter VII of the Charter of the United Nations and the measures are binding on Australia pursuant to article 25 of the Charter. The relevant United Nations Security Council Resolutions can be found on the UN website (www.un.org.au).

Details of the Charter of the United Nations (Sanctions – Iran) (Specified Entities) List 2010

Section 1 Name of List

Section 1 of the List provides that the name of the List is the Charter of the United Nations (Sanctions - Iran) (Specified Entities) List 2010.

Section 2 Commencement

Section 2 of the List provides that the List commences on the day after it is registered.

Section 3 Listing of specified entities

Section 3 of the List provides that for subregulation 17E (3) of the Charter of the United Nations (Sanctions – Iran) Regulations 2008 (the Regulations), Schedule 1 of the List lists specified entities.  Section 3 includes a note to the effect that subregulation 17E (2) of the Regulations provides that it is a contravention of subregulation 17E (2) to conduct business with (i) a specified entity, (ii) an individual or entity acting on behalf of, or at the direction of, the specified entity or (iii) an entity owned or controlled, whether or not by illicit means, by the specified entity, other than in accordance with an authorisation granted by the Minister for Foreign Affairs pursuant to regulation 17F.

Section 4 Effective date for listing of a specified entity

Section 4 of the List provides that the date on which a listing of a specified entity (“the relevant entity”) takes effect shall be: (a) for a person referred to in subregulation 17E(1) of the Regulations who is already conducting business with the relevant entity on the date on which the relevant entity was listed (the listing date), the thirtieth day following the listing date; or (b)              in all other circumstances, the listing date.  Section 4 includes a note to the effect that a person referred to in subregulation 17E (1) of the Regulations is a person who is (a) an Australian national, or (b) subject to Australian jurusdiction, or (c) an entity incorporated in Australia, or (d) an entity subject to Australian jurisdiction.

Schedule 1 List of specified entities

Part 1  Entities with links to Iran’s nuclear and ballistic missile programs

Part 1 of Schedule 1 of the List provides the names and relevant identifying information (including alternative names and identifying information) of entities specified by the Minister based on their links to Iran’s nuclear and ballistic missile programs.

Part 2  Islamic Revolutionary Guard Corps Entities

Part 2 of Schedule 1 of the List provides the names and relevant identifying information (including alternative names and identifying information) of the Islamic Revolutionary Guard Corps (IRGC) and of entities specified by the Minister based on their links to the IRGC.

Part 3  Transportation entities

Part 3 of Schedule 1 of the List provides the names and relevant identifying information (including alternative names and identifying information) of the Islamic Republic of Iran Shipping Line (IRISL), of entities specified by the Minister based on their links to the IRISL, transportation entities, and of other entities in Iran’s transportation sector specified by the Minister based on measures contained in resolution 1929 indicating a risk of the involvement of such entities in the transportation of items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737, paragraph 5 of resolution 1747, paragraph 8 of resolution 1803 or paragraphs 8 or 9 of resolution 1929.

Part 4  Financial sector entities

Part 4 of Schedule 1 of the List provides the names and relevant identifying information (including alternative names and identifying information) of financial sector entities, based on measures contained in resolution 1929 indicating a risk that Iranian financial sector entities may contribute to Iran’s proliferation-sensitive nuclear activities, or the development of nuclear weapon delivery systems.

Part 5  Energy sector entities

Part 5 of Schedule 1 of the List provides the names and relevant identifying information (including alternative names and identifying information) of entities specified by the Minister in Iran’s energy sector, based on information in resolution 1929 noting the potential connection between Iran's revenues derived from its energy sector and the funding of its proliferation sensitive activities, as well as the dual-use nature of goods used in the petrochemical sector with those required for certain sensitive nuclear fuel cycle activities.