AUSTRALIA Law and Practice Contributed by: Dennis Miralis, Jack Dennis and Phillip Salakas, Nyman Gibson Miralis
Support for Armed Forces of the Islamic Republic of Iran v International Military Services Ltd (2019) 1 WLR 6409. As a starting point, a permit may be able to be issued under regulation 20 (4) of the Sanctions Regulations for certain dealings required to “satisfy a judicial, administrative or arbitral lien or judgment that was made before the date on which the person or entity became a designated person or entity” where the dealing is not “for the benefit” of that designatee. It remains to be seen how courts will interpret and apply this provision, including whether it extends to foreign judgments. Regardless, the ASO has noted that assets provided to a designated person or entity as a result of a legal proceeding or settlement will be frozen until the designation is removed, an approach that seeks compliance with both pre-designation judgments and sanctions regimes. What is clear is that a permit basis is not expressly available for judgments secured after a designation, even when those proceedings were ongoing at the time of the designation, which further widens the impact of sanctions. 7. Designation, Compliance and Circumvention 7.1 Executive Body The Minister of Foreign Affairs is responsible for mak - ing designation decisions. 7.2 Scope of Designation Strictly speaking, only those who are expressly desig - nated are designated. However, Regulation 14 of the Sanctions Regulations prohibits the indirect facilitation of the provision of sanctioned assets to a designated person. That is to say, it is an offence if one “indirectly makes an asset available to or for the benefit of a per -
son or entity” without a permit. Australian courts have stated that this regulation should be given “the full meaning that is open from the words”, so as to include provision “through interposed corporate entities” and “where the benefit is either the object, effect or likely effect of making the asset available”. There are also additional offences that extend prohi - bitions to entities or bodies “owned or controlled” by or those “acting on behalf of” (and similar language) sanctioned governments, individuals or entities. More definitively, the assets of a designated person may not be easy to identify and may extend beyond those that are obvious, as they encompass assets owned or controlled by the designated person. The ASO’s Guidance Note – dealing with assets owned or controlled by designated persons and entities – advis- es that ownership and control of a given asset are determined according to the “factual circumstances, including the kind of asset and the laws of jurisdiction in which it was created”. 7.3 Circumvention 7.3.1 Prohibiting Provisions Some provisions were designed to ensure compli - ance with Australia’s sanctions regimes by prevent- ing any circumvention. Specifically, Regulation 13 of the Sanctions Regulations prohibits the provision of a “sanctioned service”, which is broadly defined to include essentially any service “if it assists with or is provided in relation to, a sanctioned supply”. This broad scope was reportedly explained by the Austral- ian government as necessary to prevent circumven- tion of the laws through intermediaries or by exploiting loopholes. 7.3.2 Criminal Penalties An activity that breaches Regulation 13 of the Sanc - tions Regulations is a criminal offence and attracts the same penalties as set out in 2.2.2 Breaching Sanc- tions .
20 CHAMBERS.COM
Powered by FlippingBook