Australian sanctions regime updated to address modern slavery challenges

HollyAnn Walters-Quan of Pinsent Masons in Melbourne was commenting after the Australian parliament passed new sanctions legislation earlier this month. The Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021 (Cth) (9 page / 207KB PDF) updates the existing Autonomous Sanctions Act 2011 (Cth) allowing for sanctions to be imposed based on particular issues and not solely on geography. 

“The introduction of the thematic autonomous sanction is another positive step towards eradicating modern day slavery, following the recent introduction of modern slavery legislation in Australia,” Walters-Quan said.

“The amendments to the legislation will allow Australia to apply sanctions to perpetrators of serious human rights violations, such as modern slavery, without the need for a geographic connection,” Walters-Quan said.

Thematic sanctions are measures which can be imposed in situations of international concern such as modern slavery. They are separate to the sanctions applied under international obligations from the United Nations Security Council (UNSC) and can be used in situations to supplement sanctions imposed by the UNSC or in situations which are not covered by the UNSC.

The amendments to the Australian legislation are broad, applying in addition to country-specific sanctions.

The amendments to the legislation introduce a set of six ‘thematic’ autonomous sanctions regimes addressing: the proliferation of weapons of mass destruction; threats to international peace and security; malicious cyber activity; serious violations or serious abuses of human rights; activities undermining good governance or the rule of law, including serious corruption; and serious violations of international humanitarian law.

The recently released exposure draft of the Autonomous Sanctions Amendment (Thematic Sanctions) Regulations 2021 provides that the foreign affairs minister, currently the Honourable Marise Payne, would have the power to prevent a person from entering or remaining in Australia if they were satisfied that the person had been engaged in, responsible for, or complicit in an act which constitute a serious violation or abuse of human rights, including the right not to be held in slavery or required to perform forced labour.

According to the amendment’s explanatory memorandum, the application of sanctions will be reserved for “the most egregious violations and abuses of human rights”. Violations are more likely to be considered ‘egregious’ and be captured under the regime where they involve sexual violence, violence against minors, or are perpetrated due to the victim’s membership of a particular group.

Australia’s foreign minister Marise Payne said the amendments would help ensure Australia did not become an “isolated, attractive safe haven” for those engaged in modern slavery and other illegal actions. Payne said the government was encouraging continuing public engagement on the issues highlighted by the legislation.

The title of the Australian legislation refers to the US Magnitsky Act, passed in 2012 in order to sanction Russian officials allegedly involved in the death of tax lawyer Sergei Magnitsky while he was imprisoned in Moscow.

The US has since expanded its sanctions legislation, with the 2016 Global Magnitsky Human Rights Accountability Act enabling the country to sanction individuals anywhere in the world suspected of human rights violations.

Other countries are also seeking to tackle modern slavery and human rights violations. In April 2021 the UK imposed its first asset freezes and travel bans under a new sanctions regime targeted at individuals and entities suspected of corruption and bribery overseas.

Meanwhile a private members’ bill seeking to address modern slavery was introduced to the UK parliament in June 2021 and is currently in its second reading before the House of Lords.

Stacy Keen, sanctions expert at Pinsent Masons, said “Australia’s introduction of thematic sanctions regimes follows the approach taken by the UK, US, EU and Canada, all of which permit sanctions designations to be made based on the nefarious actions of individuals and entities regardless of their location. Historically, EU sanctions – which applied in the UK prior to its exit from the EU - in particular were geography focused, while in contrast thematic regimes focus on a particular type of untoward behaviour”.

“The creation of thematic regimes brings a degree of flexibility for sanctions authorities as ‘bad actors’ can be subject to sanctions without the need to introduce a country specific sanctions regime. They also bring an additional compliance challenge for businesses, with Know Your Customer /  Business Partner checks needing to factor in the risk that individuals and companies accused of past or current misconduct that is covered by a particular regime may end up on a sanctions list,” she said.