 I couldn't see a number of familiar faces in the audience when I was down here last May. Let me also introduce Clare O'Leath, Clare is a colleague from the Defence Export Control Organization. If we have people here who are involved in defence exports, you're probably very aware that we have sanctions regimes that look at particular countries, but then we also have a separate regime that regulates the export of defence goods to any country. And naturally enough, those two regimes intersect if you're exporting defence goods to a sanctioned country. So while I'll just talk about sanctions today, if there are any questions about defence goods, then Clare will be very happy to take those as well at the end of my presentation. I'll end to do five things today. Some of these will be a little familiar to those of you who were here last May. Firstly, I'll give a general introduction to the sanctions regimes that Australia implements. Secondly, I'll run through some particular sanctions measures that we implement within the sanctions regime. Thirdly, I'll talk about sanctions permits and how you can get one to authorise an activity that might otherwise contravene sanctions. Fourthly, I'll talk about sanctions offences. It's important to understand the context of sanctions as a straight incremental law. And fifthly and finally, I'll run through what it is that Australia businesses really need to know and do when it comes to sanctions. Please feel free to interrupt me at any point. I'm very happy to take questions as we go along. So to start then with a general introduction to sanctions regimes. What are sanctions? The Charter of the United Nations doesn't actually use the term sanctions anywhere, but Article 41 of the Charter in essence defines what we mean when we talk about sanctions. It prefers to measures not involving the use of armed force, including complete or partial interruption of economic relations. We passed the Autonomous Sanctions Act in 2011. When it was still at the stage of being a bill in 2010, we released an explanatory memorandum outlining what the bill would do. That included a slightly more elongated but nonetheless very consistent definition of sanctions. So what are the aims of sanctions? Again, referring to that explanatory memorandum from the Autonomous Sanctions Bill of 2010. We normally refer to three aims. The first is to limit the adverse consequences of a situation of international concern. The second is to seek to influence those responsible for giving rise to that situation. And the third is to penalise those responsible. In Australia we implement two different types of sanctions regimes. The first is United Nations Security Council or UNSC, sanctions regimes. These are imposed by the UNSC in response to a threat to the peace of reach of the peace or an active aggression. And then once they're imposed by the UNSC, it's incumbent upon all U.S. member states, naturally including Australia, to implement those sanctions as a matter of international law. So we have no room to move when it comes to implementing UNSC sanctions regimes. The second type of sanctions regime that we have in Australia is Australian Autonomous Sanctions regimes. These are both imposed and implemented purely by the Australian government as a matter of our foreign policy. The autonomous sanctions that we implement may supplement UNSC sanctions, so there are a number of instances where the UNSC has been willing to go a certain distance down a road to sanctioning a country. The Australian government has had additional concerns and so it's chosen to go further down that road through our autonomous sanctions. Alternatively, autonomous sanctions might be entirely separate from UNSC sanctions. There are a range of sanctions regimes we've implemented autonomously where the UNSC has had nothing to say about that particular country. I should note that with autonomous sanctions, we typically move in lockstep with like-minded countries around the world. We look in particular to Canada, the EU and the U.S. And you'll see that our autonomous sanctions in many ways mirror the autonomous sanctions of those countries as a nice person. This diagram shows the current sanctions regimes that we implement, a total of 24 regimes at the moment. We put together this slide I think last Thursday. It became out of date on Friday. The UNSC last Friday in New York time adopted a new sanctions regime in relation to Yemen, so that we're in the process of implementing that domestically and we'll need to add it to this diagram very shortly. With your attention to the overlap of the two circles there, we implement both UNSC sanctions and also autonomous sanctions in relation to three countries, North Korea, Iran and Libya. We implement all of these sanctions, UNSC or autonomous, through Australian sanction laws. UNSC sanctions regimes are primarily implemented under the Charter of the United Nations Act 1945 and its various sets of regulations. There's a separate set of regulations for each UNSC sanctions regime. And the Charter of the United Nations Act, or Catoona to its friends, is administered by us in foreign affairs and trade. Australian autonomous sanctions, perhaps unsurprisingly given the name of the act, are primarily implemented under the Autonomous Sanctions Act of 2011 and the Autonomous Sanctions Regulations of the same year. There's only one set of regulations for autonomous sanctions and we use that one set to implement all of our autonomous sanctions regimes. Like Catoona, the Autonomous Sanctions Act is also administered by DFAT. That was an innovation that we brought in 2011 with the Autonomous Sanctions Act to ensure that all sanctions, UNSC or autonomous, are administered by DFAT. We hope that makes it much easier for business in particular. We are a one-stop shop for sanctions issues now. It also, incidentally, makes life much easier for us so it seems to be a win-win. With that by way of an introduction to the sanctions regimes that we implement in Australia, let me turn to the second part of my presentation and talk a bit about some of the particular sanctions measures that we implement within our sanctions regimes. Importantly, this is another innovation of the Autonomous Sanctions Act of 2011. Catoona and that act use the same terms to describe sanctions measures. Again, we hope this makes it simpler for businesses to comply with sanctions and that we can talk the same language regardless of whether we're discussing UNSC sanctions or we're talking about Australian Autonomous Sanctions. Different sanctions regimes impose different sanctions measures. As you would expect, they are tailored to the particular situation of international concern. So it is important to understand the detail of the particular sanctions regime that you might be dealing with. But the types of sanctions measures that are included may include general prohibitions on, for example, making a sanctioned supply of export sanctioned goods and those terms and quotations are the terms used in our various pieces of legislation. Making a sanctioned import of import sanctioned goods. Providing a sanctioned service. Engaging in a sanctioned commercial activity. Dealing with a designated person or entity. Using or dealing with a controlled asset. Or the entry into or transit through Australia of a designated or declared person. While it's not formally a sanctions measure, I know we have a number of representatives of the financial sector here today. You'll be very familiar with this as an anti-money laundry and counter-terrorism financing measure. There is also a general prohibition on financial transactions of $20,000 or more with Iran. While it's not formally a sanctions measure, if you're exporting goods to Iran that might fall foul of sanctions, there's a very good chance the underlying financial transaction is worth $20,000 or more. So there's crop-up in the same circumstances, hence we cover this prohibition in our sanctions presentations as well. So I'll run through in a little more detail the most common of these sanctions measures about which we receive inquiries. I'll use Iran as a case study for that. Partially because we receive more inquiries about Iran than we do any other country. And partially because, if you remember back to that diagram, three or four slides ago, Iran is one of those countries for which we implement both UNSC and Australian Autonomous Sanctions Regime. So it's a complex media example to draw upon. Looking first then at making a sanctioned supply to Iran, this is a prohibition that exists both in UNSC sanctions and in Australian Autonomous Sanctions in relation to Iran. And a person makes a sanctioned supply if the person supplies, sells or transfers goods to another person. The goods are export sanctioned goods and as a direct or indirect result of the supply sale or transfer, the goods are transferred to Iran. Just note the breadth of the prohibition here. It does extend to the indirect supply of goods to Iran, which means that we're most certainly interested in trades that you may be undertaking involving multiple intermediaries where perhaps the final end user is in Iran. That definition of making a sanctioned supply rather begs the question of what is an export sanctioned good. There are some differences for UNSC sanctions compared to autonomous sanctions. For UNSC sanctions in relation to Iran, export sanctioned goods are defined by reference to various UNSC and International Atomic Energy Agency documents. You can find those listed on our website or of course in our legislation. But in essence what we're talking about are goods related to Iran's nuclear and ballistic missile programs. Importantly, dual use goods are certainly included and that is where things can start to get complicated for Australian exporters. For Australian Autonomous Sanctions to Iran, our definition of export sanctioned goods is a fair bit broader. This is a good example of the UNSC being willing to go so far in imposing sanctions against a particular country, in this case Iran. And the Australian government together with our like-minded is wanting to go a bit further and we've done that through autonomous sanctions. So export sanctioned goods for our autonomous sanctions in relation to Iran include arms or related material which is itself defined broadly. Our goods related to chemical and biological weapons. Specified goods related to the oil, gas and petrochemical industries. Specified graphite raw materials and semi-finished metals. And specified software for integrating industrial processes. Those last two dash points, the graphite at L and the software represent our most recent amendments to autonomous sanctions in relation to Iran. Those measures came into effect on the 24th of January. Once again, dual use goods are included and again it's in that area of dual use goods that Australian exporters may need to consult us and may find it to be complicated. Turning then to another of the sanctions measures that is included in both UNSC and Australian Autonomous Sanctions in relation to Iran, the provision of a sanctioned service. A sanctioned service includes provision of technical assistance or training, financial assistance, a financial service or another service if it assists with or is provided in relation to a military activity, a sanctioned supply using the definition that we just talked through. The manufacture or use of export sanctioned goods or gold, precious metals and diamonds. And of course all of those services we're talking about in Iran. Turning to the prohibition on dealing with designated persons and entities, another one that is included both in UNSC sanctions and Australian Autonomous Sanctions. A person is generally prohibited from directly or indirectly making an asset available to or for the benefit of a designated person or entity. A person or entity acting on behalf of or at the direction of a designated person or entity or an entity owned or controlled by a designated person or entity. Importantly, asset for these purposes is defined very broadly. It includes an asset or property of any kind with a tangible, intangible, movable or immovable. So in essence we're talking about any sort of transfer to a designated person or entity. Again, just to note the breadth of this prohibition that extends to indirectly making an asset available to an entity that is merely owned or controlled by a designated person or entity. That rather begs the question of who or what is a designated person or entity. Again, there are some differences for UNSC sanctions and we've gone a bit further with our Autonomous Sanctions. For UNSC sanctions in relation to Iran we're talking about persons or entities designated by the UNSC Iran Sanctions Committee. And for our Autonomous Sanctions, we're talking about persons or entities that the Minister for Foreign Affairs is satisfied and contributed to Iran's nuclear or missile programs or assisted Iran to breach UNSC resolutions. We hopefully make this easier to navigate by providing a consolidated list on our website of all designated persons and entities for the purposes of all UNSC and all Australian Autonomous Sanctions regimes. We also make available on our website a software program called Link Match Lite. It's a data matching program. It can help you if you have a person's name in front of you, for example, to check if that person is included on the list. Turning to another of our common sanctions measures, the prohibition on using a controlled asset. Once again included both in UNSC and Australian Autonomous Sanctions in relation to Iran. A person who holds a controlled asset is prohibited from using or dealing with it or allowing or facilitating it to be used or dealt with. And a controlled asset for these purposes is an asset that is owned or controlled by a designated person or entity or those various persons who are associated with designated persons or entities. As again, I know it's committed to a number of you in the room as prohibition is particularly relevant to the financial sector. The final particular measure that I will discuss is the general prohibition on financial transactions with Iran valued at $20,000 or more. As I mentioned earlier, not formally a sanctions measure. These transactions are prohibited if a party to the transaction is an individual who is physically present in Iran or a corporation incorporated in Iran. We have no measure like this in relation to any country other than Iran. So this is something you only need to be concerned about if you are undertaking financial transactions with an Iranian party. From our perspective in detail, it gives us visibility of a very wide range of financial transactions. And we then not only consider approving the financial transaction valued over $20,000, but we can look at the transaction in its totality from a broader sanctions compliance viewpoint. So it's become quite a valuable sanctions compliance tool for us. Enough of talking about restrictions on business. Let me turn to the third part of my presentation and talking about how you might be able to obtain a sanctions permit to undertake an activity that would otherwise contraven sanctions. The Minister for Foreign Affairs, in some cases, her delegate can issue sanctions permits. She may attach conditions to a sanctions permit. And importantly, we get quite a few questions from business on this point. A permit may cover several identical or similar activities over a period of time. So for example, if you understand in the next, let's say two years, you expect to be undertaking 10 or more transactions with the same party in Iran following the same financial path or maybe a selection of only two or three financial paths, we can give you a permit for those multiple trades over the course of a two-year period. I'm very happy to talk to you about how that works specifically on a case-by-case basis, but please bear that in mind. You don't need to be coming to us for each and every trade. Different sanctions regimes have different criteria, which must be satisfied before the Minister or her delegate can consider granting a permit. As you might expect, those criteria UNSC sanctions regimes are set by the UNSC and we are once again courtesy of international legal obligations obliged to implement those in Australia. And the risk of selling like a broken record is not formally a sanctions measure, but the defense secretary or his delegate may grant a permit authorizing a financial transaction of $20,000 or more with Iran. And if you're looking at a particular trade with Iran that might constitute a sanctioned supply, it might also involve a financial transaction worth $20,000 or more. We'll roll that into the one permit if we're able to grant you a permit. So you'll have one bit of paper that will cover you off for the various measures that you might need covered for. To give you a sense of the sorts of criteria that may need to be satisfied before we can look at granting a sanctions permit, and I'll continue with Iran as a case study. For UNSC sanctions, the minister may issue a permit authorizing a sanctioned supply to Iran, including if the contract includes appropriate end user guarantees. The Iranian government has given particular undertakings to the Australian government, and the trade has been approved by the UNSC Iran sanctions committee. You'll immediately appreciate that that's a pretty high bar to reach, and it probably won't surprise you to hear that we don't grant a huge number of sanctions permits for a sanctioned supply to Iran. It should also add that this is at the absolute upper end of the scale of complexity of the criteria that may need to be satisfied, and it reflects the breadth of UNSC sanctions in relation to Iran, and the particular concerns that the Security Council has about Iran's nuclear and ballistic missile programs. The good news is that for Australian autonomous sanctions in relation to Iran, it is significantly more straightforward for us to grant a sanctions permit for a sanctioned supply. The only criterion that the minister needs to consider is whether she considers it would be in the national interest to grant such a permit. If you remember back to the basis of Australian autonomous sanctions, that they are an instrument of Australian foreign policy, just as we can impose them in a fairly straightforward way, it then makes sense that we can also grant permits in a fairly straightforward way that is consistent with Australian foreign policy. While I'm using Iran as a case study, I'll also note that national interest is generally the only criterion for a permit to be granted under any of our autonomous sanctions regimes. There are one or two exceptions, but it's a good rule of thumb. For a financial transaction permit, the DEFAT Secretary, August Delegate, may authorise a financial transaction of $20,000 or more if it is appropriate to do so, and that's the fundamental criterion that we apply. But the Secretary will have regard to whether the transaction fits under one of these five headings. The one I really draw your attention to is the fourth dot point, which refers to a significant trade transaction that, if not completed, would have an adverse effect on Australia's trade relationship with Iran or the viability of an Australian business and we're pretty liberal in how we interpret those terms. Coming to the fourth part of my presentation then to talk about the serious criminal offences that are established by Australian sanctioned laws, contravening a sanctions measure or a condition of a sanctions permit is a serious criminal offence punishable for individuals by up to 10 years in prison and or a fine the greater of $425,000 or three times the value of the transaction if that can be calculated. These offences are punishable for bodies corporate by a fine the greater of $1.7 million or again three times the value of the transaction where that can be worked out. Importantly, these offences are strict liability offences for bodies corporate. They are not for individuals but they are for bodies corporate, meaning that it's not necessary to prove any fault elements be it intent, knowledge, recklessness or negligence for a body corporate to be found guilty. All that a corporate needs to be satisfied of the body corporate had undertaken the conduct regardless of the body corporate's intent. Giving false or misleading information in connection with the administration of a sanctioned law is also a serious criminal offence. Importantly, a sanctions permit is taken never to have been granted if false or misleading information was contained in the application for it. In other words, it would not only be an offence to have provided false or misleading information but any trades that you may have undertaken thinking you were relying upon a permit enough for the fact that permit was not in place so those trades would very likely constitute offences under themselves as well. And this offence of providing false or misleading information is also punishable by up to 10 years in prison and or a fine of $425,000. These offences apply broadly. They apply as you would expect to any activity in Australia but also to any Australian anywhere in the world. So please do consider your offshore activities and to any person using an Australian flag vessel or aircraft. Again, not formally a sanctions measure but providing services in relation to an unauthorised financial transaction of $20,000 or more with a rand is an offence for a financial institution, a reporting entity in the language of the anti-money laundering and counter-terrorism financing act and regulations. And each transaction that is processed or requested authorization is punishable by a fine of $8,500. We in DFAT do have some investigative powers to determine if a sanctions offence may have been committed. Of course the primary investigative agency for the Commonwealth Government is the Australian Federal Police and we do at a certain point refer matters to the AFP but we can get the ball rolling with some powers that we have. DFAT may issue a notice requiring a person to give information or documents including under oath for the purpose of determining whether a sanctioned law has been or is being complied with. These notices are quite a powerful tool. The person must comply regardless of any other law and regardless of whether the information might tend to self-incriminate him or her. Fated to comply with one of these notices is a self-inoffence punishable by 12 months in prison. Every once in a while we do issue one of these notices and it comes as a bit of a surprise to the person in whose letterbox it arrives but in fact more often than not it would be a good 80% of the time we issue these notices at the request of an Australian business. There's a number of instances where Australian businesses have come across information that they think would be of interest for us but for legal reasons, for commercial reasons, for reputational reasons they're a little reluctant to simply hand it across to the DFAT. In those circumstances, by all means do contact us. If you would like us to issue one of these notices we're always very happy to do so. It provides legal coverage for the business to provide that information to DFAT. We're of course very appreciative of receiving an information that you may have so it's a win-win for all concerned. So please do keep that in mind as a tool that is available. I should note that's really indicative of our broader approach to administering Australian sanctioned laws. Of course we will resort to investigating non-compliance. We will resort to making refer to the AFP and pursuing prosecutions where we have to but we're much more about having these sort of sessions, having dialogue with business, talking things through than we are about wrapping up the prosecutions. So if you do come across something you'd like to talk it through and get in touch. Importantly there are a number of defences to sanctions offences. There are of course the range of regular defences that you find as a matter of general Australian criminal law in the criminal code but there is one defence that is specific to Australian sanctions offences. It's also specific to bodies of corporate. So it's a defence for a body corporate if it proves that it took reasonable precautions and decides due diligence to avoid contravening a sanctions measure or a condition of a sanctions payment. And I often say in these presentations that if you walk away remembering two phrases there'll be two phrases that are very familiar to you in the business context. Make them reasonable precautions and due diligence. What constitutes those two phrases will depend on the circumstances. Again, I imagine it will be familiar to many of you it's very difficult to define those things in a general way. They really are very context-specific and trade-specific. But as a bottom line a body corporate would certainly have to demonstrate that it thoroughly considered sanctions issues before undertaking an activity. And one tool to think about is to consider including terms related to sanctions in any contract related to an activity. So if you are exporting goods overseas, include terms in the contract including the end-user, not to on-sell them in a way that may contraven Australian sanction laws that will go a good way down the road towards satisfying due diligence and reasonable precautions. Naturally, please also inform us immediately of any changes to an activity that may raise sanctions issues that hitherto were not obvious. Finally then to wrap up we run through really the crux of what it is that Australian businesses need to know and do when it comes to sanctions. Firstly, when you are planning an activity please do consider whether it may involve any country, any goods or service or any personal entity subject to sanctions. You can find full details of all UNSC and all Australian Autonomous Sanctions Regimes on our website at the address on this slide. We recently completely rejigged our website incidentally. We hope this is now much easier to use. We certainly think it is and very much welcome any feedback on that front. Please also think about checking the consolidated list again available on our website of all persons and entities who are subject to all UNSC and Australian Autonomous Sanctions Regimes. If you have any concerns that an activity may contraven a sanctioned measure in an Australian sanctioned law please consider seeking legal advice to assess whether the activity may be prohibited without a sanctions permit. Sounds a bit trite to say it but of course the owners to comply with Australian sanctioned laws as with Australian criminal law more generally rests on the community at large. In contentious cases you can submit what we call an informal inquiry to DFAT relating to whether you require a sanctions permit for the activity that you are thinking about. You can do that using the Online Sanctions Administration System or OSIS which is available on our website. I just note here that we the Australian Government are only able to provide advice on Australian sanctioned laws but you may also when engaging in international trade need to think about the sanctioned laws of other countries. One to watch out for in particular is that trades denominated in USD will generally be regulated by US sanctioned laws so you will need to be familiar with those as well. If you assess that an activity would be prohibited by an Australian sanctioned law without a sanctions permit please consider whether the criteria for such a permit are met. If you assess those criteria are met then you can submit a formal application as opposed to an informal inquiry for a sanctions permit to us in DFAT again using the Online Sanctions Administration System. We do ask that you please don't put a formal application for a sanctions permit on our system until you have undertaken these steps that will greatly help us to manage this load which in turn greatly helps us to respond more quickly when an application is put on our system. We would ask that you please submit an application as early as possible. That said we understand that things can happen quickly. A trade may come up that you need to take advantage of in a hurry. We will always in those circumstances use our best endeavours to meet commercial deadlines and nine times out of ten we're able to do that but we will get a little annoyed if every permit can be a grant into a particular business where having 24 hours notice you need to turn it around. And please when you do come to us include as much information as possible. We will come back to you if something is missing from your application but of course we can move faster if everyone is there up front. What does DFAT then do when we receive an application for a sanctions permit? We'll consider it as soon as we possibly can as I say subject to our current case load. We may need to consult some other Australian government agencies. We in DFAT are the regulators. My team and I are lawyers. We are not the technical experts who understand if this particular widget is of concern and might be useful in a nuclear bomb. So we do need to consult our technical experts in other agencies from time to time. In complex cases we may need to consult other countries who might have an interest in how the Canadians, the Europeans, the Americans have dealt with a similar trade. Or we might courtesy of the criteria set by the UNSC need to consult a UNSC sanctions committee. You'll appreciate in those complex cases the timelines will start to drag out a little but we'll always stay in touch with you if that's the case. Importantly we generally require complete information about an activity and that includes the full path for any goods that you might be exporting from you through any intermediaries to the end user and likewise the full path for the payment that you receive in return again from the end user through any intermediaries after you. Finally, and this is the thought I really want to leave you with, it goes about saying that we implement Australian sanctions laws diligently that is our fundamental duty as the sanctions regulator but please rest assured that we also do so in a way that is as trade facilitated as we can possibly manage. In practical terms that really amounts to two things. Firstly we're always happy to discuss innovative and novel conditions to a sanctions permit. If there's a situation that doesn't quite gel neatly with our standard practicable look of novel conditions to get around that and secondly we always seek to avoid putting Australian businesses at a competitive disadvantage vis-a-vis your competitors from similar countries. Again our benchmarks are Canada, the EU, the US. So if for example you hear that Canadian company, European company is getting an easier time from their sanctions regulator than you're getting from us, please do let us know we're happy to talk to our counterparts in those countries and do our utmost to create a level playing field. So for further information please make your first stop our website just to run through what you can find there there are details of all UNSC and all Australian autonomous sanctions regimes You can check that consolidated list of all designated persons and entities You can download the link match live software which will help you to check the consolidated list You can access the online sanctions administration system to make either an informal inquiry or a formal application relating to a sanctions permit You can also subscribe to our sanctions email list We notify subscribers whenever the consolidated list changes are fiddling with sanctions regimes done in New York by the Security Council so that amounts to a couple of emails a week And we also notify our subscribers whenever we make significant changes to autonomous sanctions So for example I referred to the most recent changes to our autonomous sanctions for Iran, implemented on the 24th of January, we certainly informed all of our subscribers about those If our website isn't doing the trick then you can contact us by an email at sanctions.defap.gov.au We do ask that you please use OSIS for anything that relates to a sanctions permit If the contact is via email our responsible very likely be please move this across to the OSIS system The reason for that is that when you sign into OSIS you accept a bunch of legal terms and conditions that information provided before and complete and so on and that then enables us to give more definitive advice when the query comes through OSIS and if it's dealt with less formal firing now So anything to do with a sanctions permit please use OSIS But for any other matter by all means send us an email and in particular where all is when it comes to any information you might have suggesting a possible contravention of Australian sanction laws With that thank you very much again for coming and naturally I'm very happy to take any questions