In brief 5 min read
The Joint Standing Committee on Foreign Affairs, Defence and Trade has announced a parliamentary inquiry into whether Australia should introduce legislation authorising the Government to impose sanctions against gross human rights abusers, irrespective of where in the world their conduct occurs. We report on why this would be an important development in the Australian sanctions compliance landscape.
- Australia currently imposes autonomous sanctions with reference to states' contraventions of their international obligations.
- The Joint Standing Committee will consider the 'advisability of introducing a new thematic regulation within our existing Autonomous Sanctions Regime for human rights abuses'.
- Canada, the United Kingdom and the United States have already passed legislation authorising their Governments to impose sanctions against gross human rights abusers – sometimes referred to as 'Magnitsky laws' – and the European Union is preparing to do so.
- The passage of a Magnitsky law in Australia could necessitate Australian companies reassessing their sanctions risk profiles and refreshing their sanctions compliance programs.
Sanctions are measures that international organisations and states impose against other international actors in situations of international concern. The UN Security Council adopts collective sanctions resolutions that all member states must adopt, and several states – including Australia – impose additional 'autonomous' sanctions in support of their own foreign policies.
Australia's sanctions laws authorise the Government to impose autonomous sanctions to 'facilitate the conduct of Australia’s relations with other countries or with entities or persons outside Australia'.1 Perhaps unsurprisingly, given that international law conventionally regards states as its principal subjects, Australia currently only imposes autonomous sanctions regimes with reference to states' contraventions of their international obligations. For example, the Minister for Foreign Affairs recently imposed sanctions against Russian public officials in relation to illegal interceptions and seizures of Ukrainian naval vessels.
The state-focused nature of Australia's autonomous sanctions framework may soon change. On 4 December 2019, the Joint Standing Committee on Foreign Affairs, Defence and Trade announced a Parliamentary inquiry into whether Australia should adopt legislation authorising the Government to impose targeted financial sanctions and travel bans against gross human rights abusers, irrespective of where in the world their conduct occurs. The Joint Committee's Terms of Reference require it to consider various issues, including the advisability of introducing 'thematic regulation' within Australia's autonomous sanctions framework. Submissions are requested by 31 January 2020.
This is not the first time a worldwide Australian human rights sanctions regime has been proposed in Parliament. In 2018, the Hon Michael Danby MP tabled a private member's Bill, the International Human Rights and Corruption (Magnitsky Sanctions) Bill 2018 (the 2018 Bill); however, it lapsed when Parliament was dissolved in advance of this year's federal election.
The proposal to adopt a worldwide Australian human rights sanctions regime forms part of a global movement, and several other countries, including Canada, the United Kingdom and the United States, have already adopted Magnitsky laws. The European Union last week announced that it is preparing to do the same.
To date, the United States has made the most use of its Magnitsky law (which it adopted in 2012 and expanded in 2016), and has imposed targeted financial sanctions and/or travel bans against several hundred individuals and entities from a wide range of countries, including Kenya, Myanmar, Russia, Saudi Arabia, Serbia and South Africa. In doing so, the United States has targeted a broad range of human rights contraventions, from organ trafficking to the suppression and murder of journalists.
In addition, the United States has targeted grand corruption under its Magnitsky law. For example, last week, it sanctioned foreign public officials and their support networks in the Balkans, Cambodia and Latvia, as part of an ongoing anti-corruption campaign. While the Joint Committee's Terms of Reference do not indicate whether an Australian Magnitsky law would authorise the Government to target grand corruption in addition to gross human rights violations, the 2018 Bill made this provision.
The adoption of an Australian Magnitsky law would be a significant legal development for at least two reasons.
First, it could give the Australian Government more strength and capacity to respond to human rights violations, which could result in it sanctioning individuals in a broader range of countries, in relation to transnational, geographically dispersed human rights issues (like human and organ trafficking), as well as domestic, geographically concentrated human rights issues.
Second, the introduction of one form of thematic regulation into Australia's autonomous sanctions framework could open the door to others. For example, the United States has adopted thematic sanctions regimes in relation to cybercrime, narcotics trafficking and other transnational criminal organisations.
As a result, the sanctions compliance landscape could become more complicated for Australian companies. Presently, many companies assess their sanctions risk profiles primarily with reference to the countries in which they operate. However, if Australia adopts a worldwide human rights sanctions regime, companies may need to refresh their sanctions compliance programs, to account for the fact that sanctions risk may materialise anywhere in the world, including in countries that themselves are not sanctioned.
Furthermore, the possible adoption of a Magnitsky law in Australia demonstrates the interconnectedness of anti-corruption, anti-money laundering, business and human rights, sanctions and other compliance issues, and underlines the importance of businesses integrating the various components of their compliance systems.
- If your company wishes to respond to the inquiry, it has until 31 January 2020 to do so.
- We will keep you updated as the Parliamentary process progresses.
Autonomous Sanctions Act 2011 (Cth) section 10(2).