Australian sanctions compliance: the DFAT regime explained

Two regimes, one administrator

Australia operates two distinct sanctions regimes: those implementing United Nations Security Council Resolutions, and autonomous sanctions. The former is enacted through the Charter of the United Nations Act 1945, while the latter is governed by the Autonomous Sanctions Act 2011. These regimes impose obligations on individuals and entities operating in or with connections to Australia.

Despite their differing legal bases, both sanctions regimes are administered by a single body: the Australian Sanctions Office. This office sits within the Department of Foreign Affairs and Trade (DFAT).

DFAT is responsible for maintaining the Consolidated List, which details the persons and entities subject to sanctions under both the UN sanctions regime and the autonomous sanctions regime.

• The Consolidated List is publicly available.

What is prohibited

The Australian sanctions regime, administered by the Department of Foreign Affairs and Trade (DFAT), prohibits specific activities relating to designated persons and entities. A core prohibition involves dealing with the assets of these designated parties. This includes any action that would affect the ownership, control, or use of those assets.

Further restrictions apply to making assets available to designated persons or entities. This prohibition extends to both direct and indirect provision, meaning that actions undertaken through intermediaries are also subject to the same restrictions. Identifying the ultimate beneficial owner identifier of assets and transactions is crucial for compliance.

The regime also restricts the provision of sanctioned services and the export or supply of sanctioned goods. Sanctioned services can include financial, brokering, and transport services. Sanctioned goods encompass a range of items, including dual-use goods, military goods, and certain financial services, destined for sanctioned locations.

Permits

DFAT has the power to grant permits that allow activities which would otherwise be a breach of sanctions. These permits are issued on a case-by-case basis.

The granting of a permit is generally limited to situations where the proposed activity aligns with the broader foreign-policy goals underpinning the sanctions regime. DFAT assesses each application individually against these objectives.

It is crucial to understand that applying for a permit does not provide any legal authority to undertake the activity. Conduct remains in breach of sanctions until a permit is formally issued in writing by DFAT.

Penalties and screening

Failure to comply with Australian sanctions legislation can result in serious penalties. Individuals found to have contravened the sanctions regime may face imprisonment of up to 10 years, alongside substantial fines. Bodies corporate also face significant fines for breaches. penalty estimator provides some information about potential penalties.

Sanctions screening is becoming increasingly integral to Australian anti-money laundering and counter-terrorism financing (AML/CTF) obligations. Specifically, it forms a core component of AML/CTF customer due diligence, particularly under the AML/CTF Tranche 2 regime which takes effect from 1 July 2026.

To meet compliance requirements, organisations must implement robust sanctions screening processes. This includes screening counterparties, beneficial owners, and conducting ongoing monitoring against the Consolidated List.