Magnitsky-style sanctions

On 29 March, 2022, Australia’s Minister for Foreign Affairs Marise Payne announced the first set of Australian Magnitsky-style sanctions, targeting Russian individuals responsible for corruption.

This article explores how these sanctions emerged, who they apply to, and the implications for Australian businesses and individuals.


What are sanctions?

Sanctions are used to address situations of international concern and to penalise those responsible. Sanctions measures include financial sanctions such as asset freezes, travel bans, restrictions on trade and on engaging in commercial activities.

A recent example is Australia’s imposition of autonomous sanctions on Russia in response to the Russian invasion of Ukraine.


Background to Magnitsky-style sanctions

Sergei Magnitsky, a Ukrainian-born Russian lawyer and tax advisor, uncovered widespread corruption by Russian tax and law enforcement officials. He was imprisoned and mistreated, and died in custody in November 2009, after being refused medical treatment.

Magnitsky-style sanctions target Russian individuals responsible for the corruption that Mr Magnitsky uncovered and those complicit in his subsequent mistreatment and death.


Who will the sanctions apply to?

Targeted sanctions and travel bans will be imposed against 14 Russian individuals responsible for the serious corruption exposed by Sergei Magnitsky and a further 25 Russian perpetrators and accomplices of his abuse and death. These individuals will be subject to targeted financial sanctions, including asset freezes and travel bans.

Minister Payne said that this is the first of what will be ongoing sanctions using the Magnitsky-style reforms passed in December, and that this approach would enable sanctions to be applied to other perpetrators of serious human rights violations and abuses.


Implications for Australian businesses and individuals

It is important to consider that Australian sanction laws apply to activities in Australia and to activities undertaken overseas by Australian citizens and Australian‐registered bodies corporate.

Australian businesses and individuals are required to conduct due diligence to ensure that they do not deal with sanctioned persons or entities. If you become aware that you are holding an asset of a sanctioned person or entity, you are required to freeze (hold) that asset and notify the Australian Federal Police as soon as possible.

It is a serious criminal offence to contravene a sanctions measure. The penalties include up to ten years in prison for individuals and substantial fines for individuals and bodies corporate.

Nyman Gibson Miralis provides expert advice and representation in complex cases involving international sanctions.

Contact us if you require assistance.