Failure to comply with trade sanctions can result in jail time – Export Controls & Trade & Investment Sanctions

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International trade sanctions made headlines with the Russian invasion of Ukraine, but what is generally ignored is that failure to comply with trade sanctions imposed by Australia can lead to a penalty of ‘imprisonment.

A recent case shows that violating trade sanctions is a serious crime

In 2021, the New South Wales Supreme Court sentenced Sydney man Chan Han Choi, 62, to a total of three and a half years in prison for attempting to negotiate the sale of parts of Northeast missiles. Koreans, coal and pig iron in violation of Australia and the United Nations. trade sanctions.

Choi, a civil engineer, was born in South Korea but had lived in Australia since 1987 and became an Australian citizen in 2001. He was released after being sentenced because he had been in custody since his arrest in 2017.

The case, R vs. Choi (No. 10) [2021] NSWSC 891, demonstrates that failure to comply with trade sanctions is a serious criminal offence.

Mr. Choi has not been successful in his business, but he still faces a maximum sentence of ten years in prison and fines of more than half a million dollars for violating Article 16 of the Autonomous Sanctions Act 2011.

He told the court he wanted to help the North Korean people, who he said were being unfairly treated by international sanctions, and to make money.

However, the court found that while there was no actual injury, loss or damage caused by Mr. Choi’s conduct, the potential damage was significant and these types of offenses have a corrosive effect on penalties. , compromising their purpose.

Heavy Penalties Under Trade Sanctions Laws

Penalty laws provide for stiff penalties for providing false or misleading information to authorities, up to ten years in prison and a $555,000 fine.

Corporations can be fined more than $2.2 million and three times the value of a transaction.

These are strict liability offences, so it is not necessary to prove an element of fault such as intent, knowledge, recklessness or negligence for a corporation to be found guilty.

Trade sanctions against Russia

With the rapidity of sanctions being imposed on Russia in early 2022, it would be wise for companies and organizations to seek legal advice when reviewing their operations to ensure they are not breaking any sanctions laws. commercial.

Former Foreign Secretary Marise Payne announced sanctions against Russian propagandists and disinformation spreaders, as well as financial sanctions against Russian oligarchs and financial institutions.

Companies could unknowingly breach sanctions if their operations are linked to Russia, even indirectly, and should weigh their potential exposure to the risk of sanctions violations.

The terms of the sanctions are broad. The government has said it will target any person or entity performing a function of economic or strategic importance to Russia.

Corporations have a defense if they can show that they took reasonable care and exercised due diligence to avoid breaching the penalty. Being able to establish that such precautions were taken could be crucial if sanctions were unintentionally breached.

Geoff Baldwin
Criminal law
Battery Champion

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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