Chapter 2 - Background
Sanctions are a foreign policy tool designed to persuade recalcitrant
leaders to change their behaviour—for example, to improve recognition of human
rights, to adopt or restore democratic institutions, and to promote respect for
the rule of law.
Sanctions are punitive measures, not involving the use of armed force.
As noted in chapter 1, sanctions fall into two categories: UN sanctions and
The UN Security Council is the international decision-making body on
peace and security matters. Its aim is to prevent threats to peace and security.
It derives authority from Article 41 of the Charter of the United Nations to
impose sanctions against persons or regimes when their actions threaten or
breach international peace and security.
Actions that may threaten or breach international peace and security
include: systematic oppression; abuses of human rights and democratic freedoms
within a country; internal or international armed conflicts; and proliferation
of weapons of mass destruction.
Sanctions imposed by the UN Security Council are legally binding on all UN member
states. Member states are required to apply sanctions in accordance with
decisions of the Security Council.
According to DFAT, the 'contemporary practice of the Security Council is
to impose highly targeted measures aimed at removing the circumstances that
have led to a particular threat to, or breach of, international peace and
freezing funds, financial assets and economic resources owned or
controlled by persons or entities in the member country;
ensuring that these funds, assets or resources are not made
available to persons or entities subject to sanctions; and
preventing designated persons entering or transiting through
Goods subject to sanctions include military and security goods and
services, including those with potential application to weapons of mass
destruction and missile programs, or 'items that are used to fund conflict'. Food and medical
items have been traditionally exempted, but may be indirectly affected 'when a
ban on exports deprives the target of the means of paying for food and other
Administration in Australia of UN sanctions
As mentioned in chapter 1, Australia implements UN sanctions through the
UN Charter Act. Sanctions are applied by regulations made under the UN
Charter Act, or under other legislation—for example, the Customs Act 1901 and
regulations, the Migration Act 1958 and regulations, and the Banking
(Foreign Exchange) Regulations 1959.
Contraventions of sanctions are criminal offences.
The Department of Foreign Affairs and Trade (DFAT) is the lead
Australian Government agency responsible for the administration of UN
sanctions. Other agencies with administrative responsibilities include the
Department of Defence, Australian Customs and Border Protection Services and
the Reserve Bank of Australia.
UN and autonomous sanctions are distinct but complementary measures.
According to DFAT, autonomous sanctions may be imposed:
when the UN Security Council is unable to act—for example,
because the situation does not fall within its mandate, or because member
states cannot reach agreement; or
to supplement a UN Security Council measure. 
Autonomous sanctions are similar in type to UN sanctions and, in
addition, may be used to suspend non-humanitarian development assistance and
They may be applied by individual countries or groups of like-minded countries.
The European Union is an example of a regional group imposing sanctions.
Governments and academic commentators have foreshadowed a greater role for
autonomous sanctions in international diplomacy. 
Australian autonomous sanctions
In his second reading speech, the Minister for Foreign Affairs, the Hon Kevin
Rudd MP, emphasised that Australian autonomous sanctions follow international
practice—they are intended to be selected measures aimed at maintaining
international peace and security.
DFAT explained that traditionally, autonomous sanctions in Australia
have included financial sanctions, travel restrictions, restrictions on arms
exports and a number of executive measures, including suspension of ministerial
visits, cultural relations and non-humanitarian development assistance.
In contrast to UN sanctions, autonomous financial sanctions 'do not amount to a
freeze on all the assets of, or a prohibition on making any assets available'
to, individuals and entities subject to sanctions. At the time of writing,
Australia has autonomous sanctions in place against seven countries. Measures
include financial sanctions, travel restrictions, arms embargos and the downgrading
of government-to-government contacts.
The need for new legislation
Australia has no legislation designed specifically to implement
autonomous sanctions. Several submitters to this inquiry supported the enactment
of a coordinated legislative framework, replacing the existing 'patchwork' of
instruments, which were said to be limited in many instances because they are
intended for other purposes.
For example, the Reserve Bank of Australia (RBA) indicated that it has
held longstanding concerns about the efficacy of the current financial
sanctions regime under the Banking (Foreign Exchange) Regulations 1959. The
RBA observed that these regulations were 'originally promulgated for the
protection of Australia's currency and regulation of our foreign currency
Similarly, the Department of Defence—which administers sanctions pertaining to
the export of arms and strategic goods—argued
that using regulations intended for other purposes may prohibit the effective
use of sanctions and have unintended consequences.
Submitters identified substantial benefits in the proposed legislation,
including a more flexible range of policy options, a capacity to match the
measures applied by other like-minded countries, enhanced legal certainty,
administrative efficiencies, a reduced compliance burden, and improved
The committee recognises that autonomous sanctions are an important foreign
policy tool, and acknowledges the need for Australia to have a coordinated legislative
framework to optimise the effectiveness of such measures.
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