Last Updated: 12 December 2024

Overview

The Sanctions Risk Assessment tool (SRA) is produced by the Australian Sanctions Office (ASO) within the Department of Foreign Affairs and Trade (DFAT).

The SRA is a structured questionnaire which can be used by regulated entities to inform a preliminary assessment of the sanctions risks associated with a given activity.

The SRA is intended to serve only as a guide to assessing sanctions risks. This document should not be used as a substitute for legal advice. Sanctions compliance is a dynamic, ongoing process rather than a one-time assessment. Sanctions measures and associated risks are constantly evolving, requiring regulated entities to continuously monitor and reassess their compliance strategies. Regulated entities are encouraged to seek independent legal advice tailored to their specific situations and ensure thorough due diligence in all activities. Users are responsible for ensuring compliance with sanctions laws.

Regulated entities can assess any given activity against Australian sanctions prohibitions by following a structured approach to determine if the activity has a connection to any sanctioned person, entity or country.

Parts A and B of the SRA are structured to answer two primary sanctions compliance questions, under which each of the types of sanctions measures are considered.

Given the broad remit of targeted financial sanctions, assessing these risks should be the priority, as any connection between the activity and a designated person or entity raises significant sanctions compliance risks. This assessment includes:

• checking if the activity involves directly or indirectly making assets available to, or for the benefit of, a person or entity identified in the Consolidated List
• checking if the activity involves using or dealing with assets owned or controlled by a person or entity identified in the Consolidated List.

If no such connections can be identified, the focus should then turn to assessing whether the activity has any nexus to a sanctioned country, region, or terrorist group under Australian or UNSC sanctions (as identified in Annexure A). If such a connection can be established a systematic assessment of each of the relevant sanctions prohibitions should be conducted. This assessment includes:

• confirming whether the activity involves the export or import of sanctioned goods or services
• verifying if the activity constitutes a sanctioned commercial activity
• consulting relevant sanctions frameworks for country-specific prohibitions and measures
• assessing if the activity involves prohibited dealings with cultural property, restricted vessels, assets of former regimes (e.g. Saddam Hussein's regime), or the provision of services to a terrorist group (ISIL (Da'esh), Al Qaida, the Taliban and Al-Shabaab).

Information required

To complete the SRA, you will need the following information:

• For all activities:
  • Identity of all persons and entities associated with the proposed activity.
  • Details of the beneficial ownership structures of any entities associated with the proposed activity.
  • Identity of any persons and entities that may derive a benefit from the proposed activity.
• For activities involving providing, selling, or transferring goods:
  • Destination country for any goods being supplied and any countries the goods will transit through.
  • Understanding of what goods are designated as 'export sanctioned goods' for any destination and transit countries involved.
  • Identity of all likely end-users of the goods.
  • Likely end-uses for the goods, including any potential dual-use or military applications.
• For activities involving importing, purchasing, or transporting goods:
  • Country of origin for the goods and any countries the goods will transit through.
  • Understanding of what goods are designated as 'import sanctioned goods' for the origin country and any transit countries involved.
• For activities involving providing services or engaging in commercial activities with a nexus to a sanctioned country:
  • Understanding of what goods are designated as 'export sanctioned goods' for the sanctioned country.
  • Understanding of what goods are designated as 'import sanctioned goods' for the origin country and any transit countries involved.
  • Understanding of the relevant restrictions on services and commercial activities which apply to the sanctioned country.
• For activities involving providing services to a maritime vessel:
  • Identity of any maritime vessels involved in the activity.

Sanctions risk Assessment

Part A: Is the proposed activity associated with a designated person or entity?

Targeted Financial Sanctions

Targeted financial sanctions generally prohibit:

• directly or indirectly making an asset available to (or for the benefit of) a designated person or entity
• an asset-holder using or dealing (or allowing or facilitating the use or dealing) with an asset that is owned or controlled by a designated person or entity. As these assets cannot be used or dealt with, they are referred to by the ASO as 'frozen'.

Unlike trade restrictions which usually apply to specific goods and services, targeted financial sanctions prohibit the supply of any asset whatsoever to designated persons or entities. An 'asset' includes an asset or property of any kind, whether tangible or intangible, movable or immovable.

The designated persons and entities on which targeted financial sanctions have been imposed are identified on the Consolidated List.

If 'yes' to questions 1, 2, 3 or 4 the activity may be prohibited.

Part B: Is the proposed activity associated with a sanctioned country, region or terrorist group?

Sanctioned supply

A person generally makes a sanctioned supply if they supply, sell, or transfer goods to another person, and those goods are designated as 'export sanctioned goods' for a specific country, region or terrorist group. If, as a direct or indirect result of the supply, sale or transfer, the goods are transferred to that country, region or terrorist group, for use there or by, or for the benefit of that country, region or terrorist group, the supply is likely to be considered sanctioned.

What constitutes an 'export sanctioned good' varies by sanctions framework, as each sanctions framework has specific regulations that define which goods are prohibited from being supplied to that particular country, region or terrorist group.

To identify which sanctions frameworks have 'export sanctioned goods' go to Annexure A.

It is important to understand that supplying, selling, or transferring 'export sanctioned goods' to the relevant country, region or terrorist group is still prohibited, even if those goods were not manufactured in or did not otherwise originate from Australia. Furthermore, the prohibition on making a sanctioned supply applies even when no payment or other financial gain is derived from the provision or transfer of the goods.

If 'yes' to question 5C, the activity may be prohibited.

Sanctioned import

A person generally makes a sanctioned import if they import or purchase goods from another person, or transport goods that are designated as 'import sanctioned goods' for a specific country, region or terrorist group, and these goods have been exported from, or originate in or from, the relevant sanctioned country, region or terrorist group. What constitutes an 'import sanctioned good' varies between frameworks.

To identify which sanctions frameworks have 'import sanctioned goods' go to Annexure A.

It is important to understand that the prohibition on making a 'sanctioned import' can apply to the import or purchase, or transport of 'import sanctioned goods' in jurisdictions outside of Australia. Hence, the prohibition does not only apply to the physical import of 'import sanctioned goods' into Australia. 

If 'yes' to question 6C, the activity may be prohibited.

Sanctioned commercial activity

Restrictions are imposed on certain commercial activities involving a sanctioned country or region. There is no general definition of a sanctioned commercial activity. Instead, sanctioned commercial activities tend to be bespoke and context-dependent, relating to specific activities described in the regulations for the relevant sanctions framework. For example, a sanctioned commercial activity for the Democratic Republic of Korea (DPRK) includes a person concluding an agreement on behalf of a DPRK domiciled financial institution related to that entity opening an office, branch or subsidiary in Australia.

To identify which sanctions frameworks have sanctioned commercial activities go to Annexure A.

If 'yes' to question 7B, the activity may be prohibited.

Sanctioned service

A person generally provides a sanctioned service if they provide technical, financial, or other services in connection with a sanctioned supply, import, commercial activity, or certain country-specific activities.

It is generally prohibited to provide:

• technical advice, assistance or training, financial assistance, financial services, or another service if it assists with or is provided in relation to a sanctioned supply or certain country-specific services
• financial assistance or a financial service if it assists with or is provided in relation to a sanctioned import
• an investment service if it assists with or is provided in relation to a sanctioned commercial activity
• a sanctioned service to a designated terrorist group (ISIL (Da'esh), Al Qaida, the Taliban and Al-Shabaab).

Just like sanctioned commercial activities, some sanctioned services can be bespoke and context-dependent, relating to specific activities described in the regulations for the relevant sanctions framework. For example, a sanctioned service for the DPRK includes engaging in sanctioned scientific or technical cooperation with persons sponsored by or representing the DPRK.

To identify which sanctions frameworks have 'sanctioned services' go to Annexure A.

If 'yes' to question 8C, the activity may be prohibited.

If 'yes' to question 9, the activity may be prohibited.

If 'yes' to question 10C, the activity may be prohibited.

If 'yes' to question 11B, the activity may be prohibited.

Other sanctions measures

Restrictions regarding vessels

Australia imposes sanctions against vessels under the DPRK and Libya sanctions frameworks. The prohibitions restrict a range of services and activities involving certain designated vessels.

Using or dealing with assets of Saddam Hussein's regime

The Iraq sanctions framework imposes restrictions on using or dealing with assets that were formerly owned by Saddam Hussein's regime, or assets that were acquired, or removed from Iraq, by persons or entities that have been designated by the UNSC.

Restrictions on dealing with cultural property illegally removed from Iraq and Syria

Australia's sanctions regimes for Iraq and Syria aim to protect cultural property illegally removed from these countries. Under the Iraq sanctions, items removed on or after 6 August 1990 that are Iraqi cultural property or of archaeological, historical, cultural, rare scientific, or religious importance are protected. Similarly, under the Syria sanctions, items removed on or after 15 March 2011 with the same criteria are protected. It is prohibited to trade, transfer, or give such items to another person.

If 'yes' to question 12, the activity may be prohibited.

I've completed the SRA questionnaire. What do I do now?

Review the results

Carefully examine your answers. If any responses indicate potential sanctions risks (e.g. answering 'yes' to any questions that results in a prohibited activity), or your answers are uncertain or ambiguous, further investigation is needed before progressing with the activity.

Obtain independent legal advice

It is highly recommended that you consult with a legal advisor who specialises in sanctions laws. Independent legal advice can be invaluable in accurately identifying sanctions risks. Legal experts can offer tailored guidance that considers the specific circumstances of your organisation, including its industry, geographic scope, and the nature of its activities.

Legal professionals can help interpret complex sanctions regulations and identify potential risks associated with your activities. They can also provide clarity on ambiguous or evolving aspects of sanctions laws.

Moreover, legal advisors can assist in documenting the steps taken to identify sanctions risks. This documentation is essential for demonstrating your organisation's due diligence, which can be crucial if your organisation needs to justify its actions to the ASO or in the context of legal proceedings.

Involve your compliance team

If your organisation has an internal compliance or legal team, share the results of the SRA for further review. They may have additional insights or controls in place to address the risks identified in the assessment.

Take appropriate action based on the results

If your SRA indicates no connection to sanctions risks, you may consider proceeding with the activity, but it is crucial to monitor for changes in sanctions frameworks and legislation that could affect future activities.

If the SRA identifies high-risk areas, such as links to sanctioned persons, entities or countries, you should consider modifying the proposed activity to mitigate those risks, or abandon it altogether to ensure compliance with sanctions laws.

Document the assessment process

Keep detailed records of your assessment, decisions, and any legal advice obtained. This documentation is important for demonstrating that any claim that you have taken reasonable precautions and exercised due diligence to avoid sanctions contraventions if your organisation is ever later questioned by the ASO.

Ongoing monitoring and compliance

Sanctions frameworks and legislation are constantly evolving, and new designations or restrictions can be introduced. It is important to regularly review and update your sanctions risk assessments, especially for long-term projects or ongoing business relationships.

Implement a system to monitor changes in sanctions regulations, including updates to the Consolidated List and relevant country-specific prohibitions. This is particularly important for businesses that operate in multiple jurisdictions or trade in sensitive goods.

Engage with the Australian Sanctions Office

If you are still uncertain about how sanctions laws apply to your activity, further information is available on the Department's website and in ASO guidance notes on specific sanctions topics. If you have any questions, you can make an enquiry through Pax.  The ASO can provide additional clarity, but this input should not replace independent legal advice.

Sanctions permits

In some cases, it may be appropriate to apply for a sanctions permit. A sanctions permit is an authorisation from the Minister for Foreign Affairs (or the Minister's delegate) to undertake an activity that would otherwise be prohibited by an Australian sanctions law.

The ASO advocates for proactive risk management rather than relying on permits. Sanctions permits are generally appropriate only when there is a clear likelihood of a sanctions contravention occurring. For broad or non-specific sanctions risks, it is better to manage compliance through reasonable precautions and due diligence to prevent issues before they arise. To enable due consideration of any permit application, the ASO must be provided sufficient detail of a specific contravention to which the application relates.

Further information on making a sanctions permit application is available on the DFAT website.

Penalties for sanctions offences

Sanctions offences are punishable by:

• For an individual - up to 10 years in prison and/or a fine of 2500 penalty units ($825,000 as of 7 November 2024) or three times the value of the transaction(s) (whichever is the greater).
• For a body corporate – a fine of up to 10,000 penalty units ($3.3 million as of 7 November 2024 or three times the value of the transaction(s) (whichever is the greater).

Australian sanctions laws apply broadly, including to activities in Australia, and to activities by Australian citizens and Australian-registered body corporates overseas.

Further information and resources

Further information is available on the Department's website and in ASO guidance notes on specific sanctions topics. If you have any questions, you can make an enquiry through Pax.

Annexure A – Sanctions measures on countries, regions or terrorist groups

Key:

✖ = Applicable
N/A = Not Applicable

This table does not include sanctions frameworks which only apply restrictions on dealing with designated persons and entities. All persons and entities designated under Australian sanctions laws are listed on the Consolidated List.

Restrictions are also This table does not include sanctions frameworks which only apply restrictions on dealing with designated persons and entities. All persons and entities designated under Australian sanctions laws are listed on the Consolidated List.

Restrictions are also imposed on using or dealing with assets of Sadam Hussein's regime and dealing with cultural property. More information is available on the DFAT website.  

Restrictions are also imposed on dealing with cultural property illegally removed from Syria. More information is available on the DFAT website.

Annexure B – Sanctions frameworks (regulations)

Yemen

The Taliban

Sudan

South Sudan

Lebanon

ISIL and Al-Qaida

Iraq

DRC (Democratic Republic of the Congo)

CAR (Central African Republic)

Syria

Libya

Iran

DPRK

Myanmar

Russia

Zimbabwe

Ukraine

Al-Shabaab (Somalia)