Having spent a week in Tasmania, I am now back to work, and what better way to emerge from holiday-induced wooziness than by delving into a couple of sanctions-related developments right here, Down Under! (Before I do that, though, can I digress for a moment’s appreciation of an airline. Not only do Link Airways fly to Hobart in quaint, tiny propeller jets, but they also keep to schedule with a mere four passengers on board, who are rightly and appropriately treated to the entire plane’s supply of wine. Other airlines, take note!)
So, on to sanctions. Today the Australian Senate’s Foreign Affairs, Defence and Trade References Committee has published its report on the implications of ongoing violence in Iran. As one might expect, the document traverses a wide and varied terrain, but of particular interest are its observations on Australia’s use of Magnitsky sanctions.
In summary, the Committee recommends expanding Australia’s recourse to Magnitsky-style sanctions, especially against top Iranian officials responsible for human rights abuse. It also criticises the government for sanctioning far fewer Iranian nationals than the US or the UK, as well as for the amount of time it takes Australia to replicate partner countries’ sanctions designations. The Committee highlights that, in some instances, it takes Australia months essentially to copy and paste US and UK sanctions — with DFAT (Australia’s foreign ministry) representatives unable to explain, at least in the format of public hearings, what is achieved by the delay.
It is hardly a coincidence that earlier today the Australian government has announced a new tranche of sanctions in relation to Myanmar and Iran. To my mind, the big question is whether that is a token offering calculated to placate the Senate and public opinion, or a harbinger of Australia coming into its own insofar as sanctions policy is concerned.
This is not simply a matter of whether the government is dovish or hawkish on sanctions, or to what extent it should forge consensus with, say, other Five Eyes countries. The real issue, at least as I see it, is whether Australia’s sanctions decision-making is underpinned by a genuine analysis of the value its designations add, as opposed to ritualistic copying of a handful of US or UK sanctions listings. For instance, an obvious starting point is analysing which potential targets actually have links to Australia. And undertaking that analysis requires proper resourcing — which the DFAT, and specifically its Australian Sanctions Office (ASO), may or may not have!
On which note, the ASO has just announced a review of Australia’s autonomous sanctions framework, with submissions accepted until 26 February 2023. The accompanying issues paper is primarily targeted at eliciting the views of businesses that navigate Australia’s sanctions regimes. For instance, one issue concerns potential consolidation of Australian sanctions legislation and regulations, so as to reduce its complexity. That said, broader policy questions are likewise raised: for example, the operation of humanitarian exemptions and the periodic review of sanctions designations.
The review is relatively light on sanctions enforcement, both from the private sector perspective and in relation to the ASO’s role. On the one hand, it asks whether civil penalties for sanctions violations should be introduced. On the other hand, it is silent on the practicalities of sanctions enforcement. For example, once designations are issued, what challenges do businesses have in identifying assets that may belong to sanctioned persons? How does, or can, the ASO support their efforts in doing so? How can the ASO better identify non-compliant businesses, and where do the highest risks lie?
In all fairness, the terms of reference are couched in a fairly broad fashion, and thus there is no barrier to anyone’s delighting the ASO with all manner of thoughts that are ‘relevant to the efficiency and effectiveness of the autonomous sanctions framework’. So, perhaps this is what all of us with an interest in sanctions should be doing!
Economic Crime Law 