At a glance: trade sanctions in Australia

Trade sanctions

What restrictions apply in relation to the trade of goods, technology and services?

There are a number of trade sanctions imposed in Australia that prohibit the export and/or import of certain goods and the provision of certain services. The sanctions typically apply to the provision of goods or services to a particular country but, in some cases, may also apply to specific persons or entities.

In addition to restrictions imposed by sanctions, the Department of Defence (through Defence Export Controls) administers and regulates the ‘supply, export, publication, and brokering’ of military and dual-use goods and technology (listed on the Defence and Strategic Goods List. Activities in relation to these goods are generally prohibited but may be permissible by permit.

Do any exemptions apply to the general trade restrictions?

Yes, different sanctions regimes impose different criteria for the grant of a permit, which will allow a person to undertake an activity that would otherwise not be permitted by an Australian sanctions law. Permits are granted by the Minister for Foreign Affairs.

In respect of sanctions implemented in Australia under the Charter of the United Nations Act 1945 (Cth), Australia also applies any general exemptions under the relevant sanctions regime. For example, the United Nations Security Council (UNSC) adopted Resolution 2615 on 22 December 2021 establishing a humanitarian exemption to the UNSC sanctions regime in relation to the Taliban. Pending amendment of the Charter of the United Nations (Sanctions – the Taliban) Regulation 2013 (Cth) to reflect the humanitarian exemption, Australia is implementing the exemption immediately relying on section 2B of the Charter of the United Nations Act 1945 (Cth).

In addition to the exemptions that apply to goods subject to sanctions, the Defence and Strategic Goods List allows for the transfer of military and dual-use goods in certain circumstances.

Have the authorities in your jurisdiction imposed any trade sanctions against dealing with any particular individuals or entities?

Yes, the Australian government has applied trade sanctions against specific individuals and entities both under the United Nations Security Council and autonomous sanctions regimes. These targeted sanctions are set out in a consolidated list maintained by the Australian Sanctions Office (ASO) (part of the Department of Foreign Affairs and Trade) called the ‘Consolidated List’. For example, under the Syria sanctions regime, various commercial activities are prohibited with entities in the petrochemical, oil and gas industries and to the financial sector.

See Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Syria) List 2017 (Cth).

In what circumstances may the competent sanctions authorities in your jurisdiction issue a licence to trade in goods, technology and products that are subject to restrictions?

Australia’s different sanctions regimes have different criteria for the licensing and permit of trade in goods and services that are subject to sanctions. For activities that would otherwise be subject to sanctions, the Minister for Foreign Affairs may grant a ‘permit’ authorising the activity.

Pursuant to Australia’s autonomous sanctions regime, permits can be issued in relation to ‘authorised imports’ and ‘authorised supplies’ (see Regulation 18 Autonomous Sanctions Regulations 2011 (Cth)).

A permit will not be granted unless it can be established to the satisfaction of the Minister of Foreign Affairs that it would be in the national interest to grant the permit. The term ‘national interest’ is not defined in the legislation and is intended to be broad. The ASO guidance provides that relevant factors to consider when assessing ‘national interest’ include the objectives of the sanctions regime (eg, to prevent continued human rights abuses), whether the activity is in the interests of Australia as a whole (eg, economic, security or other foreign policy considerations) and any effect on Australia’s international reputation.  

In respect of sanctions implemented pursuant to United Nations Security Council resolutions, permits can only be issued where specific criteria, unique to the sanctions regime, have been met. Additionally, the Minister for Foreign Affairs may have to obtain UN approval prior to granting the permit.

Permits, including indicative assessments for permits, can be applied for online using Pax.

In respect of controlled goods and technology listed on the Defence and Strategic Goods List (DSGL), additional permits and licences may be required to be provided by the Department of Defence (Defence Export Controls).

DEC permit

If a company’s goods, services or technologies are controlled under the DSGL, a permit can be applied for to export, supply or publish military or dual-use goods or technology. In summary, these can be for the following:

• export, supply or publication of military or dual-use goods or technology (including for transshipment through Australia and for repair or return purposes); and
• multi-party (project) permits and permits aligned with contracts.

A permit may be granted provided the Minister is satisfied that it will not prejudice the ‘security, defence or international relations of Australia’ (see section 11 Defence Trade Controls Act 2012 (Cth)).

AUSGEL

The Department of Defence also issues Australian General Export Licences (AUSGELs) for specific pre-approved activities (ie, trade or transfer of DSGL goods and technology). These include:

• export and supply of certain dual use and DSGL software and technology to specified destinations;
• export of certain military and dual use goods to specified destinations for repair or return;
• export of certain military and dual use goods to the Australian government;
• the temporary export of certain goods for the purpose of marketing demonstration; and
• export of certain military goods for return after marketing demonstration.

These AUSGELs, as described by the Department of Defence, permit the licence holder to supply goods to specific destinations and purposes for five years’ duration, or longer if required. They are a broader type of licence compared to a DEC Permit. However, they are generally not available for export or supply of ‘sensitive goods or technologies’ (see Category 1 DSGL).

What is the application process for a licence? What is the typical timeline for a licence to be granted?

The application process for a sanctions permit is online via a dedicated portal called ‘Pax’ that is operated by the ASO. To obtain a permit, the applicant must detail all information about the proposed trade activity. This includes:

• details and specifications of the goods;
• information on the end use of the goods; and
• details on the consignee, third-party transport providers, intermediaries, brokers and, of course, the end user. End user certification may also be required.

The ASO endeavours to process the permit applications as quickly as possible however, they advise allowing three months for processing. This is especially so if the trade is complicated or if it involves high risk countries or regions. Generally speaking, the ASO expects it will take six to eight weeks to process a Pax application.

Finally, permits are usually issued for a period of 180 days, but they can be issued for up to two years, depending on the nature of the trade activity and risk profile.

To what extent is it possible to engage with the competent sanctions authorities to discuss licence applications or queries on trade sanctions compliance?

The ASO welcomes questions about sanctions compliance, and feedback on the ASO guidance. Additionally, to determine whether or not you may be affected by sanctions law, you can request an ‘Indicative Assessment’. The ASO also provides free presentations on Australian sanctions law and provides speakers to present at seminars hosted by industry groups, professional associations and peak bodies. Everything from asking questions, to requesting an indicative assessment can be done via the online portal Pax.

The Department of Defence also has a dedicated telephone hotline and email address for questions on the permits and licences issued by Defence Export Controls. Additionally, it is possible to obtain a preliminary assessment and an ‘in principle’ approval for the export of controlled goods and technology.