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Recent changes to Australia’s autonomous sanctions regime to counter Russia’s invasion of Ukraine have highlighted two critical recommendations. First, Australian financial services entities and other internationally exposed businesses need to ensure that their monitoring and compliance activities are up-to-date and quickly respond to further developments.


Companies operating or with business dealings linked to Russia, Ukraine or Belarus must immediately reevaluate their operations to ensure they do not violate the strict and extensive financial sanctions imposed in response to Russia’s invasion of Ukraine.

Australia has imposed significant additional sanctions on Russia following the escalating situation in Ukraine. Joining its Western allies, including the US, the UK, Japan and the European Union. The situation is rapidly developing, and additional sanctions are being devised in response, including sanctions against Belarus, key Belarusian individuals and entities complicit in the aggression.

Russia was already subject to various goods, services and commercial activities sanctions, primarily aimed at military and arms dealings, the oil and gas industry, and designated financial institutions.

Australia’s inceptive response has been to sanction individuals and entities with a strategic or economic consequence to Russia, and by doing so restrict Russian access to the global financial system. The amendments to the Autonomous Sanctions Regulations 2011 (Cth) foist travel bans and financial sanctions aimed at those deemed responsible for the violence, including members of Russia’s Security Council, various Russian oligarchs, military personnel, and members of Parliament. Sanctions have also been applied to several entities involved in the development and sale of military technology and weapons and various banks.

The Regulations have also been modified to amplify the current sanctions measures imposed on Crimea and Sevastopol, as well as on the Donetsk and Luhansk regions of Ukraine as of 28 March 2022. Donetsk and Luhansk are separatist Russian-aligned regions that President Putin has officially acknowledged. Those measures limit a range of sanctioned commercial activities, exporting or importing a range of goods and supplies, or providing specified services. Predominantly goods and services related to telecommunications, transport and energy sectors, the exploitation of oil, gas and mineral resources, as specified in the Regulations and the Autonomous Sanctions (Russia, Crimea and Sevastopol) Specification 2015 (Cth).

Additional sanctions ahead

Foreign Minister Marise Payne has declared further sanctions on Russian oligarchs while attending a meeting of NATO leaders in Brussels.

The Foreign Minister said Australia would impose sanctions on 67 Russians in response to Moscow’s “illegal war” on Ukraine.

Those sanctioned include Russia’s Deputy Prime Minister Dmitry Grigorenko, Minister of Economic Development Maxim Reshetnikov, Deputy Chairman of the Russian Duma, Aleksander Babakov, and other senior Russian government officials.

The list also includes prominent Russian military official Colonel-General Mikhail Mizintsev.

This announcement brings the total number of Russian individuals and entities sanctioned by Australia to about 600, at this time.

Australia’s sanctions laws

Australia administers two types of sanctions:

Autonomous sanctions are punitive measures enacted by the Government as a foreign policy tool that does not involve armed force. The Department of Foreign Affairs and Trade indicates that sanctions can resolve a situation of international concern by affecting those responsible, limiting the inauspicious impacts of a situation, or disciplining those responsible.

The sanctions can be applied to a foreign government entity or a member of the entity, or another entity or person outside of Australia.

Sanctions measures include:

  • limitations on trade in goods and services
  • limitations on engaging in commercial activities
  • targeted financial sanctions on designated entities and persons
  • travel bans on specific persons.

Following the passing of the Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021 (the 2021 Act), the Government has the power to impose sanctions to address particular issues known as thematic sanctions. The issues include threats to international peace and security; malicious cyber activity; serious violations or severe abuses of human rights; or activities that subvert good governance or the law. While formerly sanctions imposed by Australia have been country-focused, these reforms allow the Government to impose sanctions to address a broader range of comportment (for example, human rights abuses), regardless of where the conduct occurs.

Preceding sanctions imposed on Russia

Subsequent to Russia’s annexation of the Ukrainian territory of Crimea, on 19 March 2014 then Foreign Minister, Julie Bishop, announced that Australia would exact targeted financial sanctions and travel bans on 12 Russian and Ukrainian individuals. She then announced on 21 May 2014 that the Government would expand these sanctions to cover a supplemental 38 Russian and Ukrainian persons and 11 entities.

The Government amended the Regulations, on 12 June 2014, to permit the Foreign Minister to impose travels band and financial sanctions on a person or entity that the Minister is sufficed is responsible for, or complicit in, the commination to the sovereignty and territorial integrity of Ukraine. The Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014 (the 2014 List) delineates the individuals and entities currently subject to sanctions.

On 1 September 2014, then Prime Minister Tony Abbott declared that Australia would impose supplementary sanctions on Russia in response to the ongoing Russian threat to the sovereignty and territorial integrity of Ukraine. The Government amended the Regulations to embargo (without prior authorisation from the Foreign Minister):

  • the export to Russia of services and goods that are arms-related materiel
  • export to Russia of services and goods for use in oil exploration and production
  • export to Crimea and Sevastopol of services and goods affiliated with infrastructure in the telecommunications,  transport, energy, gas, minerals, and oil sectors
  • the import from Russia of arms and related materiel
  • the import from Crimea and Sevastopol of any goods that Ukrainian authorities have not verified
  • commercial dealings that afford certain entities of Russia access to Australian capital markets and
  • Australian investment in Crimea and Sevastopol is related to infrastructure in the telecommunications, transport, energy, oil, minerals, and gas sectors.

The Autonomous Sanctions (Russia, Crimea and Sevastopol) Specification 2015 details which commercial activities and goods are currently subject to sanctions.

Sanctions imposed in February 2022

All of the recent sanctions announced by the Government are imposed under the existing country-specific sanctions regime concerning Russia/Ukraine that was in place before the passage of the 2021 Act.

On 24 February 2022, the Government enacted the Autonomous Sanctions Amendment (Russia) Regulations 2022, which amended the Regulations to widen the scope of individuals and entities on which Australia can impose targeted financial sanctions or travel bans to include:

  • a person (or their immediate family) or entity that the Minister is sufficed is or has been taking part in an activity or performing a function that is of economic or strategic import to Russia or
  • a current or former Minister or senior official of the Russian Government (or their immediate family members).

The Government has made several amendments to the 2014 List to subject individuals and entities to travel bans and financial sanctions:

These sanctions took effect on the day following the instrument being registered on the Federal Register of Instruments.

On 24 February 2022, the Government additionally amended the Regulations to extend current sanctions applicable to Crimea and Sevastopol (as detailed previously) to the regions of Donetsk and Luhansk. These sanctions took effect on 28 March 2022. The Prime Minister has advised that the delay was to give ‘opportunities for businesses that have had legitimate operations and business interests in Russia and in the affected territories of Ukraine to make changes to their arrangements’.

While the Prime Minister has recognised that the sanctions imposed on trade with Russia are unlikely to have a major impact, given Russia is not a significant trading partner with Australia. He also noted that targeting specific individuals and entities will permit the Australian Government to be more effective in ensuring that those who are financing and profiting from Russia’s actions in Ukraine face the consequences. Although, in the past, Russia has responded to the imposition of sanctions by Western countries by banning imports of particular agricultural products from these countries (the ban concerning Australia was most recently extended to December 2021).

Whether Russia will again extend this ban or take other actions against Australia in response to its decision to impose sanctions, is not yet known. While the Prime Minister has previously voiced that Australia is taking a staged approach concerning sanctions,  it’s unclear what other options remain.

Impact on Australian businesses

New research shows that the tough financial sanctions imposed on Vladimir Putin’s Russia may affect a larger portion of the Australian economy than first thought.

While Australia’s economic relationship with Russia is not significant, equating to merely 0.2% of total trade, new data analytics firm Purpose Bureau says the impact of strict the new trade restrictions could be felt markedly by approximately 1000 small to medium-sized unlisted businesses with close

associations to Russia.

Purpose Bureau utilised natural language processing to scan websites, and administrative and media data for 1.1 million Australian businesses and ascertained 948 unlisted companies with appreciable operational exposure to Russia.

Firms qualified as having ongoing operational vulnerability if they had an operating entity or a physical office or store in Russia.  Alternatively, they also qualify if they have provisioned goods or services to Russian customers.

Purpose Bureau CEO Nick Kamper said the companies identified were predominantly involved with providing support services for Russia’s oil and gas industry and industrial and agricultural production, which is subject to strict sanctions.

Purpose Bureau helps businesses assess suppliers, clients, and rivals’ environmental, social, and governance risks through a variety of data points it tracks.

Almost 37% of the Russian-linked firms are based in either Queensland or Western Australia, despite the resource-rich states making up just 29% of the Australian economy.

Throughout 2021, Australia exported approximately $821 million worth of goods and services to Russia and imported $453 million.

However, Mr Kamper said that even though Russia was only Australia’s 46th largest trading partner, the relationship was more complex than it seemed. The repercussions of sanctions would extend well beyond what could be seen in official statistics.

The firms generally had dozens of staff, with locations across several countries.

After the invasion, a handful removed their advertised Russian locations, while one auto part dealer disabled its website entirely.

The research comes following moves by institutional investors to dump holdings in Russian assets, part of international plans to help isolate President Putin’s regime.

Australia’s most significant super funds have pledged to dump their $2 billion Russian asset portfolio when market conditions allow after facing pressure from the federal government to divest.

Vogue Advisory Group – helping our clients through geopolitical impacts on their business and investments

If you have questions or concerns regarding your financial investments or business regarding the impacts of Australia’s sanctions against Russia, please contact Vogue Advisory Group, and one of our financial advisors can help you.