For more than half a century, the United Nations Universal Declaration of Human Rights and other widely endorsed conventions have established a global framework for promoting respect for human rights.

Despite these worthy initiatives, the ability to deter human rights violations and enforce international accountability for those responsible for such abuses, have proven to be significant and ongoing problems.

Measures employed by fair-thinking countries to deter bad behaviour include restrictions on diplomatic and other contacts, boycotts of official and other significant events, arms embargoes, trade and financial sanctions.1

The United States has led the charge on a number of these initiatives and in 2012, the US Congress passed the Sergei Magnitsky Accountability Act in an attempt to limit the benefits to corrupt government officials who ‘would never want to keep their ill-gotten gains in their own country’.

The Act was named after Sergei Magnitsky who, after uncovering a $230m fraud committed by Russian government officials, testified against them and was arrested, tortured and died in jail.

The 2012 Act, originally limited to Russia, was supplemented in 2016 by the Global Human Rights Accountability Act, which applies worldwide to dictators, human rights abusers and perpetrators of large-scale corruption. Based on this global Act, the US government has already imposed sanctions on 94 individuals and 102 entities from 24 countries, including South Sudan, Uganda, Iraq and Cambodia.

Improved versions have since been passed in Canada and several European countries and the UK, where targeted sanctions have been authorised. These include visa bans and asset freezes against individuals implicated in serious human right violations.

An Australian perspective

For its own part, Australia currently applies sanctions in two ways:

  • Sanctions as a result of United Nations Security Council Resolutions, that Australia is obligated to implement as a member state of the UN.
  • An autonomous sanctions regime which can cover actions outside Australia that are contrary to Australian Government policy.

Advocates for an Australian Act argue however, that current international legislation doesn’t clearly enable the Government to seize the assets of human rights offenders and ban them from entering our country.

This led to a report from the Joint Standing Committee on Foreign Affairs, Defence and Trade in Australia in December 2020: Criminality, corruption and impunity: Should Australia join the Global Magnitsky movement?.

The report recommends enacting legislation to authorise the Government to impose sanctions against foreign individuals who are responsible for human rights violations, and those ‘who have materially assisted, sponsored or resourced significant corruption2‘.

This recommendation came after eight months of hearings and contributions from many notable individuals, including human rights lawyer Amal Clooney and pre-eminent lawyer Geoffrey Robertson AO QC, who warned that failure to adopt a new human-rights-specific sanctioning regime would risk Australia becoming a haven for ‘dirty money’ and ‘despots’.

Just recently, the Australian Government has tabled its response to the Committee and committed to introducing amendments to the Autonomous Sanctions Act 2011 by the end of 2021. These amendments allow for the adoption of ‘thematic’ sanctions programs targeting transnational issues.

These changes will refocus compliance efforts from being country oriented to being company and individual oriented, with an increased focus on your supply chain.

Five things you need to think about…

  • The sanctions risk profile of the companies you deal with may change.
    Companies, boards and senior management undertaking business in Australia should prepare for the fact that the sanctions risk profile of various Australian businesses in Australia will be affected by the new regime.
  • As a consequence, your risk exposure will change.
    You will need to reassess your risk exposure and ensure your compliance program covers anti-corruption, anti-money laundering and human rights, as well as sanctions and other compliance issues.
  • Know your customers and suppliers.
    You will need to embrace a comprehensive vision and understanding of your customers’ portfolios and supply chains. This brings with it a responsibility to be aware (in a timely manner) of any negative news which is likely to have an impact on your business and reputation.
  • Take a step back – regularly.
    Undertake regular risk assessments and ongoing monitoring of any dealings with foreign governments, state-owned enterprises and private companies at risk of exploitation. These are just some of the measures necessary to prevent serious penalties, loss of business and reputational damage under the proposed new scheme.
  • Consider how illion can help.
    Measure your risk at all times with a comprehensive database of Politically Exposed Persons (PEP), sanctions, law enforcements, and adverse media.

When it comes to watchlists screening, saving time and quickly identifying high-risk customers or third parties is key.
With major changes to Australia’s sanctions laws on the horizon, there will be significant impacts on the compliance landscape and you will need a robust sanctions screening solution to deal with all possibilities. illion has partnered with global experts in this space. Click here to find out more.

illion’s complete suite of solutions can help you reduce manual processes at onboarding and be informed of any changes in time.
We can help preserve your company against reputational damage and screen your customers and third parties against adverse media to detect risk of corruption, modern slavery or other ethical issues.

Key features include:

  • Extensive watchlists
  • Low false positive rates
  • Adverse media monitoring
  • A complete suite of solutions, Cloud and Hosted
  • An intuitive web portal and API
  • Seamless integration with decision-making software.

Don’t get caught out. There are significant consequences as contravening an Australian sanction law may be a serious criminal offence. Penalties currently include up to ten years in prison and substantial fines. Australian sanction laws apply broadly, including to activities in Australia, and to activities by Australian citizens and Australian-registered bodies corporate overseas.

Please contact Richard Atkinson at Richard.Atkinson@illion.com.au to find out how we can help you ensure that you don’t become the next victim.

1 Department of Foreign Affairs and Trade, Submission 63, p. 5; Law Council of Australia, Submission 99, p. 8; ‘Sanctions: International Peace and Security,’ Government of the Netherlands’ viewed 10 October 2020.
2 https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Foreign_Affairs_Defence_and_Trade/MagnitskyAct/Report