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2010 - 2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
AUTONOMOUS SANCTIONS BILL 2010
REPLACEMENT EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Foreign Affairs,
the Honourable Kevin Rudd MP)
THIS MEMORANDUM TAKES ACCOUNT OF RECOMMENDATIONS MADE
BY THE SENATE FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION
COMMITTEE REPORT TABLED ON 3 MARCH 2011
AUTONOMOUS SANCTIONS BILL 2010
General Outline
The Autonomous Sanctions Bill (the Bill) provides a framework for the
implementation in Australia of autonomous sanctions.
Autonomous sanctions are punitive measures not involving the use of armed force
which a government imposes as a matter of foreign policy - as opposed to an
international obligation under a United Nations Security Council decision - in
situations of international concern. Such situations include the grave repression of the
human rights or democratic freedoms of a population by a government, or the
proliferation of weapons of mass destruction (WMD) or their means of delivery, or
internal or international armed conflict.
Autonomous sanctions measures are intended to achieve three objectives:
(a) to limit the adverse consequences of the situation of international concern (for
example, by denying access to military or paramilitary goods, or to goods,
technologies or funding that are enabling the pursuit of programs of
proliferation concern);
(b) to seek to influence those responsible for giving rise to the situation of
international concern to modify their behaviour to remove the concern (by
motivating them to adopt different policies); and
(c) to penalise those responsible (for example, by denying access to international
travel or to the international financial system).
They are highly targeted measures, applied only to the specific governments,
individuals or entities (in the form of targeted financial sanctions and travel bans), or
to the specific goods and services (such as military goods or goods with a WMD dual
use), that are responsible for, or have a nexus to, the situation of international concern.
They are applied so as to minimise, to the extent possible, the impact on the general
populations of the affected countries.
Such measures - either supplementary to, or independent of, United Nations Security
Council sanctions - are likely to play an increasing part in responses of like-minded
countries to situations of international concern.
Australia has actively applied autonomous sanctions as a foreign policy tool for a
number of years, relying on existing instruments, intended for other purposes. To
achieve more effectively the objectives underlying imposing autonomous sanctions,
including the need to participate in concerted international action involving other,
like-minded countries, the types of measures Australia would wish to implement are
likely to go beyond the scope of these instruments.
The purpose of the Bill is to strengthen Australia's autonomous sanctions regime by
allowing greater flexibility in the range of measures Australia can implement, thus
ensuring Australia's autonomous sanctions match the scope and extent of measures
implemented by like-minded countries. The Bill will also assist the administration of,
and compliance with, sanctions measures by removing distinctions between the scope
and extent of autonomous sanctions and UN sanction enforcement laws.
The Bill is modelled on the legislation with which Australia implements United
Nations Security Council sanctions, the Charter of the United Nations Act 1945. It is
intended to be a framework under which regulations are made, with each set of
regulations containing the specific measures to be imposed in response to a particular
situation of international concern.
By providing for autonomous sanctions measures to be applied by regulation, rather
than under the Bill itself, the Bill will allow the necessary flexibility for the
Government to respond to international developments in a timely way. It will also
enable the Government to harmonise the administration of autonomous sanctions and
UN sanction enforcement laws, and simplify compliance arrangements for those
entities whose business requires a regular and active engagement with the operation of
such laws.
Financial Impact
There is no financial impact.
NOTES ON CLAUSES
Part 1--Preliminary
Clause 1 Short title
This is a formal clause which provides the citation of the Bill.
Clause 2 Commencement
Clause 2 provides that the Bill (once enacted) commences on the day after it receives
the Royal Assent.
Clause 3 Purposes of this Act
This clause provides that the main purposes of the Bill (once enacted) are to provide
for autonomous sanctions; and their enforcement; and to facilitate the collection, flow
and use of information relevant to the administration of autonomous sanctions.
Clause 4 Definitions
This clause defines the following terms as used in the Bill (once enacted): "asset";
"Australia"; "autonomous sanction"; "CEO of a Commonwealth entity";
"Commonwealth entity"; "designated Commonwealth entity"; "foreign government
entity"; "officer of a Commonwealth entity"; "public international organisation";
"sanction law"; "State or Territory entity"; "superior court".
Clause 5 Specifying a Commonwealth entity as a designated Commonwealth
entity
This clause provides that the Minister for Foreign Affairs may by legislative
instrument specify a Commonwealth entity as a designated Commonwealth entity.
A designated Commonwealth entity is an entity involved in the administration of
sanctions laws. Designation of an entity under the Bill (once enacted) confers on the
CEO of that entity certain powers provided for in Part 4 of the Bill in relation to
obtaining and sharing information for a purposes related to the administration of
sanctions laws.
Clause 6 Specifying a provision as a sanction law
This clause provides that the Minister may by legislative instrument specify a
provision of a law of the Commonwealth (including in relation to particular
circumstances) as a sanction law for a purpose stated in clause 3.
Once a law is specified as a "sanction law", the provisions of Parts 3 (offences
relating to sanctions) and 4 (information relating to sanctions) of the Bill (once
enacted) will apply to that law.
Clause 7 Extension to external Territories
This clause provides that the Bill (once enacted) extend to every external Territory.
Clause 8 Act binds the Crown
This clause provides that the Bill (once enacted) binds the Crown in each of its
capacities, but does not make the Crown liable to be prosecuted for an offence.
Clause 9 Relationship with other laws
This clause provides that the Bill (once enacted) does not limit the operation of other
laws of the Commonwealth so far as they operate to provide for autonomous sanctions
or operate in relation to autonomous sanctions.
Part 2--Regulations to provide for sanctions
Division 1--Making and effect of regulations
Clause 10 Regulations may apply sanctions
This clause provides that regulations made under the Bill (once enacted) may make
provision relating, amongst other things, to proscription of persons or entities;
restriction or prevention of uses of, dealings with, and making available of, assets; as
well as restriction or prevention of the supply, sale, transfer or procurement of goods
or services. Before the Governor-General makes such regulations, the Minister for
Foreign Affairs must be satisfied that the proposed regulations will facilitate the
conduct of Australia's relations with other countries or with entities or persons outside
Australia or will otherwise deal with matters, things or relationships outside
Australia.Despite subsection 14(2) of the Legislative Instruments Act 2003,
regulations made under the Bill (once enacted) may make provision in relation to a
matter by applying, adopting or incorporating any matter contained in an instrument
or other writing as in force or existing from time to time.
The purpose of subclause 10(3) is to enable the regulations to incorporate decisions of
public international and national institutions, through publicly available documents,
relevant to the administration and enforcement of Australian autonomous sanctions.
Examples of types of `other writing' that could be incorporated by reference in
regulations under subclause 10(3) include documents listing goods of particular
sensitivity in the context of the proliferation of weapons of mass destruction, as
prepared by international export control regimes in which Australia is an active
participant, such as the Nuclear Suppliers Group, the Missile Technology Control
Regime, the Australia Group or the Wassenaar Arrangement. The `reference' would
in all cases be to documents publicly and readily available on the Internet.
Clause 10 allows the Government the necessary flexibility to apply new, or amend
existing, autonomous sanctions measures in response to international developments,
which can change rapidly. Such flexibility and responsiveness would not be possible
if the specific measures were to be implemented under the Bill itself.
Clause 11 Regulations may have extraterritorial effect
This clause provides that the regulations may have extraterritorial effect.
Clause 12 Effect of regulations on earlier Commonwealth Acts and on State and
Territory laws
Clause 12 provides that the regulations have effect despite an Act enacted before the
commencement of this clause; or an instrument made under such an Act (including
such an instrument made at or after that commencement); or a law of a State or
Territory; or an instrument made under such a law.
This clause ensures that the fact that autonomous sanctions measures are applied
under regulations (for the reasons set out in relation to clause 10 above) will not
prevent them having effect if pre-existing Commonwealth, State or Territory
legislation or legislative instruments would otherwise conflict with those measures.
Clause 12 substantially corresponds to section 9 of the Charter of the United Nations
Act 1945, which was introduced by an amendment to that Act in 1993 and further
amended in 2001.
The decision to impose sanctions is properly one for the Executive as a matter of
foreign policy, with the Parliament setting the framework and parameters for how
such measures will be reflected in Australian law. The measures applied are highly
targeted, applied only to specific foreign governments, individuals and entities or to
specific goods and services where there is a nexus to situations of international
concern.
It is appropriate that measures applied with the intention of limiting the adverse
consequences of a situation of international concern should not be prevented from
taking effect as intended and should not be affected by pre-existing legislation of
legislative instruments of the Commonwealth or a State or Territory.
Clause 13 Later Acts not to be interpreted as overriding this Part or the
regulations
This clause provides that an Act enacted at or after the commencement of this clause
is not to be interpreted as amending or repealing, or otherwise altering the effect or
operation of, a provision of Part 2 of the Bill (once enacted) or of the regulations, or
authorising the making of an instrument that does so, unless that Act provides
expressly that it, or an instrument made under it, has effect despite the Bill (once
enacted), despite the regulations, or despite a specified provision of the Bill (once
enacted) or of the regulations.
Clause 13 substantially corresponds to section 10 of the Charter of the United Nations
Act 1945, introduced by amendment in 1993. Sub-clause 13(2) preserves Parliament's
authority to enact legislation which either directly amends, repeals, or otherwise alters
the effect or operation of, a provision of Part 2 of the Bill or of regulations made
under clause 10, or which authorises the making of an instrument that does so.
Therefore, the provision does not derogate from any power of the Parliament. The
only limitation is that such legislation should expressly provide that that is its purpose.
Given the significance of the Bill and the regulations in the context of seeking to deal
with situations of international concern, including prevention of nuclear proliferation,
it is appropriate that substantive changes to the Bill (once enacted) or regulations
made under it be done deliberately and expressly, rather than through inadvertent or
implied inconsistencies in future legislation or regulations.
Division 2--Enforcing the regulations
Division 2 of Part 2 provides for measures relating to the enforcement of regulations
made under clause 10. The measures in Division 2 of Part 2 are to be distinguished
from measures in the Bill providing for the enforcement of autonomous sanctions, as
referred to in paragraph 3(b) of the Bill. The measures to which paragraph 3(b) apply,
relate to all laws specified by the Minister as `sanction laws' under clause 6, and not
merely those found in regulations made under clause 10. Enforcement of `sanctions
laws', within the meaning of paragraph 3(b), is governed by Parts 3 and 4 of the Bill.
Clause 14 Injunctions
This clause provides for a superior court, on application by the Attorney-General, to
grant an injunction restraining a person from engaging in conduct involving a
contravention of the regulations.
Subclause 14(5) provides that a court is not to require the Attorney-General or anyone
else to give an undertaking as to damages, as a condition of granting an interim
injunction.
The purpose for which the Attorney-General might seek an injunction under the Bill is
to seek to prevent the contravention of a sanctions law, which would be a criminal
offence. It is not appropriate, as a matter of policy, to require an undertaking as to
damages in an injunction which seeks to prevent the commission of a criminal
offence.
It is an established principle of law that liability shall not accrue with respect to a
lawfully made decision of a Minister. Subclause 14(5) is consistent with this
principle.
Clause 15 Invalidation of authorisations
This clause provides that an authorisation (however described) granted under the
regulations is taken never to have been granted if information contained in, or
information or a document accompanying, the application for the authorisation is false
or misleading in a material particular; or omits any matter or thing without which the
information or document is misleading in a material particular.
Part 3--Offences relating to sanctions
Clause 16 Offence--contravening a sanction law
Clause 16 provides that it is an offence to contravene a sanction law, or an
authorisation (however described) under a sanction law. When committed by an
individual, the offence is punishable on conviction by a maximum 10 years'
imprisonment, and / or a maximum fine the greater of 3 times the value of the relevant
transaction or transactions (if this can be calculated) or 2,500 penalty units. When
committed by a body corporate, it is an offence of strict liability. The offence does
not, however, apply to a body corporate if it proves that it took reasonable
precautions, and exercised due diligence, to avoid contravening the sanction law or
authorisation concerned. The offence for a body corporate is punishable on
conviction by a maximum fine the greater of 3 times the value of the relevant
transaction or transactions (if this can be calculated) or 10,000 penalty units.
This clause ensures that the consequences for contravening Australia's autonomous
sanctions are identical to a contravention of Australian laws implementing United
Nations Security Council sanctions. As the object and purpose of the Bill is to ensure
identical consequences for a contravention of Australian laws implementing both
autonomous and UNSC sanctions, the Bill must necessarily replicate the offence
provisions of the Charter of the United Nations Act 1945.
The origin of the strict liability offence for bodies corporate in the Charter of the
United Nations Act 1945 is Recommendation 2 of the report, dated 24 November
2006, of the Inquiry into certain Australian companies in relation to the UN Oil-for-
Food Programme conducted by Commissioner the Honourable Terence RH Cole AO
RFD QC (the Cole Inquiry). Commissioner Cole proposed that there be new strict
liability criminal offences with severe penalties - three times the value of the
offending transactions, by way of monetary fine for corporations - for acting contrary
to Australian law implementing UNSC sanctions to ensure both that the penalties
have a sufficient deterrent effect for bodies corporate.
The strict liability offence provisions for bodies corporate are balanced by an absolute
defence for bodies corporate that can prove they took reasonable precautions, and
exercised due diligence, to avoid contravening the sanction law or authorisation
concerned. This in turn is intended to promote a culture of corporate compliance.
The penalties are appropriately severe given the context in which the sanctions laws
will operate. The sanctions laws will restrict the trade in a narrow class of goods and
services, such as military and security goods and services to specific regimes and
financial transactions involving designated members or supporters of those regimes,
that the Australian Government assesses are facilitating the repression of populations
or the commission of regionally or internationally destabilising acts (including the
acquisition or proliferation of weapons of mass destruction). Contravening such
restrictions is thus directly comparable to the contravention of a UN sanction
enforcement law under the Charter of the United Nations Act 1945 and it is therefore
appropriate that such conduct be subject to the same consequences.
Clause 17 Offence--false or misleading information given in connection with a
sanction law
This clause provides that it is an offence to give information or a document which is
false or misleading in a material particular to a Commonwealth entity in connection
with the administration of a sanction law, or to another person reckless as to whether
that information or document will be given to a Commonwealth entity in connection
with the administration of a sanction law. The penalty upon conviction is
imprisonment for 10 years, 2,500 penalty units or both. Section 15.1 of the Criminal
Code (extended geographical jurisdiction--category A) applies to such offences.
This clause ensures, for the same reasons set out in relation to clause 16, that the
consequences for providing false and misleading information in relation to the
administration of sanctions laws are identical to providing false or misleading
information in relation to the administration of UN sanction enforcement laws under
the Charter of the United Nations Act 1945.
Part 4--Information relating to sanctions
Clause 18 CEO of Commonwealth entity may give information or document on
request by CEO of designated Commonwealth entity
Clause 18 provides that the CEO of a Commonwealth entity may, at the request of a
CEO of a designated Commonwealth entity, give that CEO specified information or
documents for a purpose directly related to the administration of a sanction law,
despite any other law of the Commonwealth, a State or a Territory.
Clause 19 Power to require information or documents to be given
This clause provides that the CEO of a designated Commonwealth entity may, for the
purpose of determining whether a sanction law has been or is being complied with,
give a person a written notice requiring the person to give the CEO information or
documents of the kind, by the time and in any manner or form, specified in the notice.
The person must comply with the notice despite any other law of the Commonwealth,
a State or a Territory. This clause does not apply to obtaining information or
documents from the Commonwealth or a Commonwealth entity.
Clause 20 Information may be required to be given on oath
This clause provides that the notice referred to in clause 19 may require the
information to be verified by, or given on, oath or affirmation.
Clause 21 Offence for failure to comply with requirement
Clause 21 provides that it is an offence not to comply with a notice given under clause
19, punishable upon conviction by imprisonment for 12 months. Section 15.1 of the
Criminal Code (extended geographical jurisdiction--category A) applies to this
offence.
Clause 22 Self-incrimination not an excuse
This clause provides that an individual is not excused from giving information or a
document under clause 19 on the ground that the information, or the giving of the
document, might tend to incriminate the individual or otherwise expose the individual
to a penalty or other liability. However, because of this, neither the information given
nor the giving of the document is admissible in evidence against the individual in any
criminal proceedings, or in any proceedings that would expose the individual to a
penalty, other than proceedings for an offence against clause 17 (false or misleading
information given in connection with a sanction law) or clause 21 (failure to comply
with requirement to give information or document).
Clause 22 of the Bill corresponds to section 33 the Charter of the United Nations Act
1945, introduced by amendment in 2007. Section 33 is one of a number of measures
which implemented Recommendation 3 of the Cole Inquiry. Given the
correspondence between autonomous and UNSC sanctions, it is appropriate that the
same authority exists to enable sanctions enforcement agencies to monitor compliance
with both UNSC and autonomous sanctions.
Clause 23 CEO may copy documents
This clause provides that the CEO of a designated Commonwealth entity may take
and keep a copy of a document given by a person under clause 19, but must return the
document to the person within a reasonable time.
Clause 24 Further disclosure and use of information and documents
This clause provides that an officer of a designated Commonwealth entity may, for a
purpose connected with the administration of a sanction law, copy, make a record of
or use any information or document and disclose any information, or give any
document, to another officer of that entity.
A CEO of a designated Commonwealth entity may, for a purpose connected with the
administration of a sanction law, disclose any information or give any document to a
Minister of the Commonwealth, a State or a Territory, or the CEO of another
Commonwealth entity, or a State or Territory entity, or a foreign government entity,
or a public international organisation, or a person or entity specified by the Minister
for Foreign Affairs in an instrument under this clause. The CEO may only do so if he
or she is satisfied that the recipient of the disclosure will not disclose the information
to anyone else without the CEO's consent.
This clause applies despite a law of the Commonwealth (other than this clause) and a
law of a State or a Territory.
Clause 24 correspond to paragraph 35(2)(f) and subsection 35(3) of the Charter of the
United Nations Act 1945, introduced by amendment in 2007.
The inclusion of the category of a person or entity specified by the Minister provides a
limited degree of additional flexibility in the categories of persons or entities with
whom information or documents can be shared. This helps to ensure that enforcement
of sanction laws is not stymied through the incapacity to exchange information with
relevant persons or entities.
Specification by legislative instrument, a disallowable instrument, subjects the
specification to Parliamentary scrutiny.
Clause 25 Protection from liability
Clause 25 provides that a person who, in good faith, gives, discloses, copies, makes a
record of or uses information or a document under clauses 18, 19, 23 or 24 is not
liable to any proceedings for contravening any other law because of that conduct or to
civil proceedings for loss, damage or injury of any kind suffered by another person or
entity because of that conduct. This does not prevent the person from being liable to a
proceeding for conduct of the person that is revealed by the information or document.
Clause 25 corresponds to section 36 of the Charter of the United Nations Act 1945,
introduced by amendment in 2007. The purpose of the immunity in clause 25 is to
protect individuals who act in accordance with the provisions in clauses 18, 19, 23
and 24.
Clause 26 Retention of records and documents
This clause provides that a person who applies for an authorisation under a sanction
law must retain any records or documents relating to that application for a period of 5
years from the day on which the application was made (if the authorisation was not
granted) or the last day on which an action to which the authorisation relates was done
(if the authorisation was granted). Similarly, a person who is granted an authorisation
under a sanction law must retain any records or documents relating to the person's
compliance with any conditions to which the authorisation is subject for the period of
5 years beginning on the last day on which an action to which the authorisation relates
was done.
Clause 27 Delegation
This clause provides that the CEO of a Commonwealth entity may by written
instrument delegate all or any of his or her powers or functions under Part 4 of the Bill
(once enacted) to an employee at the SES or equivalent level. In exercising powers or
performing functions delegated under this clause, the delegate must comply with any
directions of the CEO.
"SES employee" is defined for the purpose of Commonwealth law in section 17AA of
the Acts Interpretation Act 1901.
Part 5--Miscellaneous
Clause 28 Regulations
This clause provides that the Governor-General may make regulations prescribing
matters required or permitted by the Bill (once enacted) to be prescribed, or necessary
or convenient to be prescribed for carrying out or giving effect to the Bill (once
enacted).
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