A Guide to Anti-Money Laundering for Crypto Firms
Australia’s federal government has announced an expansion of its sanctions laws, enabling the country to target individuals who are “perpetrators of egregious acts of international concern”.
The changes will be introduced via an amendment to the Autonomous Sanctions Act 2011, and are set to come into force by the end of the year. Once enacted, the government will be able to impose financial sanctions and travel bans on individuals across a wide range of areas. Among the categories listed are the proliferation of weapons of mass destruction, human rights violations, malicious cyber activity, and corruption.
So-called Magnitsky-style laws, named after the original Magnitsky Act passed by the US Congress in 2012, authorize governments to use sanctions to target human rights abuses. Such laws have now been introduced in Canada, the United Kingdom (UK), and the European Union (EU).
While it had been expected that Australia would join this group in 2021, opposition politicians have criticized the government for being slow to react. The delay could reflect Australia’s sensitive geopolitical position. The country is caught between a desire to strengthen its security partnership with Western countries without undermining trade with China, its biggest trading partner.
Ongoing disputes between Australia and China came to the fore at the G7 in Cornwall, UK earlier this year. Australia’s Prime Minister framed ongoing tensions with China in terms of human rights, stating: “There was…a very strong level of support for what has been a very consistent and clear stand that Australia has taken, consistent with our liberal democratic values…” Human rights abuses in Hong Kong and Xinjiang Uyghur Autonomous Region, alongside the use of forced labor in sectors such as agriculture, were among the specific examples highlighted. The Australian government recently suspended its extradition treaty with Hong Kong and eased immigration rules for Hong Kong residents.
In March the US, UK, Canada, and EU imposed sanctions on Chinese officials over human rights abuses in Xinjiang. Australia was unable to join at the time due to its lack of a Magnitsky legislative framework but is almost certain to play a pivotal role in future sanctions discussions.
Reforms to Australia’s sanctions regime follow the passing of the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Act 2020. The legislation implemented recommendations from the Financial Action Task Force (FATF), including changes to customer identification procedures, correspondent banking relationships, and the cross-border movement of money.
Australia is also already a signatory to seven major United Nations (UN) global human rights treaties. To meet its obligations under those treaties, Australia implemented economic sanctions against persons and countries listed on the UN Security Council Consolidated List, as well as its own autonomous sanctions list. North Korea, Iran, Libya, and Syria are on both lists. Australia also has its own economic sanctions list, which is implemented and enforced by the Department of Foreign Affairs and Trade (DFAT).
As human rights-based sanctions on individuals become more common, it becomes harder for firms to ensure they’re up-to-date on the latest developments. For example, individuals could be sanctioned in countries not designated by FATF as non-cooperative. In order to manage the vast amounts of data needed for effective sanctions screening, firms should seek to implement a suitable smart technology solution to provide automated speed and accuracy and to adapt quickly to changes in regulation, such as Australia’s proposed Magnitsky-style regime.
Learn more about global sanctions trends in our new report.
Originally published August 12, 2021, updated May 6, 2022
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