Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019

Administered by Department of Foreign Affairs and Trade

Legislation au F2019L00975 Not in force Legislative Instrument

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Explanatory Statement

 

Issued by the Authority of the Minister for Trade, Tourism and Investment

 

Export Market Development Grants Act 1997

 

Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019

 

 

The Export Market Development Grants Act 1997 (the Act) establishes a scheme of assistance grants to encourage Australian exporters in the creation, development and

expansion of export markets for Australian goods, services, intellectual property and

know-how. Section 44 of the Act provides that the expenses of an applicant are excluded if they were incurred in respect of an eligible promotional activity related to

trade with a country that the Minister declares, by legislative instrument, for the purposes of section 44, to be subject to trade sanctions.

 

This Instrument remakes the Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009 (the Previous Instrument), which is due to sunset in October 2019.

 

The United Nations Security Council (UNSC) adopted resolution 1718 (2006) on
14 October 2006 imposing sanctions on the Democratic People’s Republic of Korea (DPRK). The sanctions have been amended and extended by UNSC resolution 1874 (2009), resolution 2087 (2013), resolution 2094 (2013), resolution 2270 (2016), resolution 2321 (2016), resolution 2356 (2017), resolution 2371 (2017), resolution 2375 (2017) and resolution 2397 (2017).

 

Paragraph 20 of Resolution 1874 in particular calls upon Member States of UNSC not to provide public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear-related or ballistic missile-related or other weapons of mass destruction related programs or activities.

 

In light of the imposition by the UNSC of trade sanctions on the DPRK, and the UNSC’s call for vigilance in relation to public provided financial support for trade with the DPRK, the Minister for Trade, Tourism and Investment has declared, by this instrument, the DPRK to be subject to trade sanctions for the purposes of section 44 of the Act.

 

Consultation

A notification of the proposal to remake the Previous Instrument was published on the Australian Trade and Investment Commission’s webpage for the Export Market Development Grants Scheme in January 2019. No comments were received in relation to the notification.

 

The Office of Best Practice Regulation has confirmed that no Regulatory Impact Statement is required for this Instrument.

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights

(Parliamentary Scrutiny) Act 2011

 

Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019

 

The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019 (the DPRK 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.

 

Overview of the Legislative Instrument

The DPRK Instrument declares, for the purposes of section 44 of the Export Market Development Grants Act 1997 (the Act), that the Democratic People’s Republic of Korea (the DPRK) is subject to trade sanctions. The Export Market Development Grants Scheme established by the Act is a financial assistance programme for small to medium aspiring and growing export-ready businesses. The effect of the DPRK Instrument is that expenses of an applicant are excluded if they were incurred in respect of an eligible promotional activity related to trade with DPRK.

 

The United Nations Security Council (UNSC) adopted resolution 1718 (2006) on 14 October 2006 imposing sanctions on the DPRK. The sanctions have been amended and extended by UNSC resolution 1874 (2009), resolution 2087 (2013), resolution 2094 (2013), resolution 2270 (2016), resolution 2321 (2016), resolution 2356 (2017), resolution 2371 (2017), resolution 2375 (2017) and resolution 2397 (2017).

 

Under Chapter VII of the Charter of the United Nations and Article 25 of the Charter, Australia is required to carry out any decision of the UNSC as a Member State of the United Nations.

 

The DPRK Instrument supports Australia’s international obligations by not providing any financial assistance to Australian businesses that may seek to develop an export market in DPRK.

 

Human rights implications

This DPRK Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

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

 

 

Overview

The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019 was enacted to ensure that Australian businesses do not receive financial assistance for developing export markets in the Democratic People’s Republic of Korea (DPRK) in light of international sanctions. This instrument, issued under the authority of the Minister for Trade, Tourism and Investment, amends the Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009, which was due to sunset. The Export Market Development Grants Act 1997 established a financial assistance scheme for Australian exporters, and section 44 of this Act excludes expenses incurred in relation to trade with countries subject to trade sanctions. Given the United Nations Security Council’s imposition of sanctions on the DPRK and its call for vigilance against financial support for trade with the DPRK, this declaration aligns with Australia’s international obligations by excluding expenses related to promotional activities with the DPRK from the scheme.

Scope and Application

The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019 applies to the activities of Australian businesses that seek financial assistance under the Export Market Development Grants Scheme established by the Export Market Development Grants Act 1997. Specifically, it targets expenses incurred by applicants in relation to promotional activities for trade with the Democratic People’s Republic of Korea (DPRK). The geographic reach of this legislation is national, as it applies across Australia to all entities and individuals involved in export activities governed by the Act. The Act is designed to prevent Australian businesses from engaging in trade with a country subjected to international sanctions by the United Nations Security Council, particularly in relation to activities that could support the DPRK's nuclear or ballistic missile programs. This declaration aligns with the broader international obligations of Australia by ensuring compliance with UNSC resolutions and preventing public financial support that could inadvertently contribute to prohibited programs. The exclusion of expenses related to trade with the DPRK ensures that the grants do not indirectly support activities that are subject to sanctions.

Key Provisions

The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2019 (the DPRK Instrument) establishes that the Democratic People’s Republic of Korea (DPRK) is subject to trade sanctions under section 44 of the Export Market Development Grants Act 1997 (the Act). This means that any expenses incurred by an applicant for eligible promotional activities related to trade with the DPRK will be excluded from consideration for grants under the Export Market Development Grants Scheme. The Act (section 44) already provides that expenses related to trade with a country subject to trade sanctions cannot be considered for grants, and the DPRK Instrument now specifically includes the DPRK as a sanctioned country. The obligations imposed by the DPRK Instrument are primarily on applicants seeking grants under the Export Market Development Grants Scheme. These applicants must ensure that any promotional activities related to trade with the DPRK are not funded through the scheme. This includes avoiding any financial support that could contribute to the DPRK’s nuclear-related, ballistic missile-related, or other weapons of mass destruction related programs or activities, as mandated by the United Nations Security Council (UNSC) Resolution 1874 (2009). By declaring the DPRK as subject to trade sanctions, the Minister for Trade, Tourism and Investment ensures compliance with international obligations under the Charter of the United Nations and Article 25 of the Charter. There are no explicit offences, penalties, or civil/criminal consequences detailed in the text for breach of the provisions in the DPRK Instrument. However, any breach of the Act’s requirements, including those stipulated by the DPRK Instrument, may result in civil or criminal penalties as outlined elsewhere in the Act. The primary consequence of non-compliance would be the exclusion of expenses related to sanctioned activities from grant consideration, thereby denying financial assistance that could indirectly support activities prohibited by the UNSC resolutions.

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