The Australian Sanctions Office (ASO) has continued its program of releasing practical materials to support compliance with Australia's autonomous sanctions regime, publishing a further new package of materials to assist Australians and Australian businesses to understand their sanctions obligations. This follows on from the suite of resources issued in December 2024, which we summarised in our February 2025 update, and reflects the Government's ongoing emphasis on strengthening operational sanctions compliance.
This update provides a brief overview of the new guidance and advisory notes.
Guidance notes
The ASO has released a range of detailed guidance notes summarising obligations for complying with Australian sanction laws. The guidance notes relate to the following topics:
- Maritime sector
- Remittance service providers
- Fintech and the DeFi sector
- Artificial intelligence and quantum computing sector
- Employment with designated persons or entities
- The import, purchase and transport of transformed and de minimis quantities of Russia-origin petroleum gases, oil and refined petroleum products
Of particular note is the guidance provided in relation to the following:
1. Remittance service providers
The ASO's latest guidance addresses remittance service providers, which offer instant payment services enabling rapid fund transfers within the financial sector.
The ASO acknowledges that while these service providers play a vital role within the community and financial sector facilitating legitimate financial flows, they can also be exploited by individuals or entities attempting to channel funds to sanctioned parties. Accordingly, remittance service providers are crucial in preventing sanctions contraventions.
The guidance emphasises that remittance service providers should adopt a robust sanctions compliance program, including an effective sanctions screening program which encompasses screening of:
- customers;
- transactions; and
- third party service providers.
The guidance indicates that remittance service providers should have sufficiently robust internal tools to flag transactions involving sanctioned entities or jurisdictions. Internal processes should be periodically reviewed, assessed for effectiveness, and training is needed for staff to be informed about indicators of suspicious activity and compliance procedures.
Further, the guidance notes that:
- The evolving nature of sanctions laws means regulated entities need to continuously monitor and update their compliance programs.
- However, given the complexities of sanctions compliance, regulated entities should shift their focus from attempting to eliminate all sanctions risk to managing sanctions risk as effectively as possible, through reasonable precautions and due diligence.
- Enhanced due diligence should be applied for transactions involving higher risk jurisdictions, including DPRK, Iran, Myanmar, Russia, South Sudan, Syria or Yemen.
Where a potential contravention is identified, the guidance indicates that a remittance service provider should:
- deny or refuse to process the transaction, and report it to the ASO;
- if a transaction has already occurred, freeze the funds and report this to the ASO and Australian Federal Police;
- consider their Anti Money Laundering and Counter-Terrorism Financing obligations.
For our latest briefing on changes to Australia's AML/CTF Rules and interaction with sanctions obligations, see our update available here: Australian AML/CTF reforms: enhanced requirements for AML/CTF policies, including sanctions compliance matters.
2. Import, purchase and transport of transformed and de minimis quantities of Russia-origin petroleum gases, oil and refined petroleum products
The ASO's latest guidance clarifies that Australia's sanctions regime does not apply to petroleum or oil products that have been either:
- substantially transformed in a third country (i.e. not in Russia or Australia) to such an extent that it loses its identity (is transformed into a new good with a new name (Tariff Code), character, and use); and
- de minimis quantities of Russian-origin petroleum gases, oil and refined petroleum products where the presence of such de minimis quantities of Russian-origin goods has specifically arisen from co-mingling via transport or storage, and cannot be practically or safely removed or separated from non-Russian good (for example, in tank heels, pipelines or terminals).
These carve-outs recognise the practical realities of global energy supply chains and mean such transactions will not be treated as sanctioned imports under Australian law.
3. Artificial intelligence and quantum technology sector
The ASO's latest guidance also addresses the rapidly evolving AI and quantum technology sectors, highlighting that advances in these areas pose an increasing risk of inadvertently breaching Australian sanctions laws.
The guidance emphasises that Australian businesses, researchers and developers working with AI systems, machine learning, advanced data analytics, cybersecurity software and quantum computing must be particularly mindful of sanctions compliance obligations.
Key risks and obligations identified in the guidance include:
- The transfer of assets, including intangible assets like software, research data or IP, to designated persons or entities, which may breach prohibitions on making assets available;
- dealing with assets owned or controlled by designated persons or entities, including through licensing or supplying AI and quantum products;
- supplying products with potential military end use, which may fall under prohibitions on 'arms or related matériel', requiring companies to apply the three-step test to assess dual-use risks; and
- providing technical advice, training or other services that could facilitate the manufacture, maintenance or use of export-sanctioned goods or otherwise benefit sanctioned countries.
The guidance also identifies some common red flags, such as:
- customers with unclear business needs for AI or quantum products, limited online presence, or opaque ownership structures;
- use of high-risk jurisdictions, unusual payment methods like cryptocurrency or remittance, or generic freight-forwarding addresses that obscure the true end user.
To manage these risks, businesses are encouraged to:
- verify customer identities and beneficial ownership, check end use and sector alignment, and assess risks of re-export; and
- use end-user certificates and restrict access from high-risk jurisdictions.
As always, the ASO underscores that compliance is an ongoing obligation. Businesses in these sectors should maintain updated compliance programs, monitor regulatory changes, and seek independent legal advice to meet their obligations under Australian sanctions laws.
Advisory notes
The ASO has also released a range of advisory notes to provide information on potential sanctions threats. The advisory notes relate to the following topics:
- Low risk sectors
- Information technology sector
- Touring companies, musicians and sports professionals
- Holders of political office
Of particular note is the advice provided in relation to the following:
1. Low risk sectors
The ASO has clarified that some sectors may be considered a low sanctions risk where they are less likely to be directly targeted by sanctions or have a lower potential for sanctions contravention. While the advisory note does not exhaustively capture all sectors that may be classified as 'low risk', examples given include goods and services sold or used exclusively in Australia or non-sanctions markets, such as:
- domestic retail;
- domestic hospitality; and
- local trade or vocational services that do not allow for international remote access (e.g. medical, veterinary and personal care industries).
In these cases, the advisory note indicates that the ASO does not expect a business to undertake sanctions screening of domestic customers.
Nonetheless, the ASO advises that no business is entirely exempt from sanctions obligations. All Australian entities must assess their exposure and implement appropriate compliance measures.
Where goods are classified as export sanctioned, the sanctions risk will increase if a business sells to resellers or business outside Australia.
To manage this risk, businesses should assess whether:
- their goods are subject to export prohibitions;
- the end-user has links to sanctioned countries; and
- the goods have a military end use or end-user.
Due diligence measures such as end-user certificates and supply chain vetting may assist with compliance.
****DFAT has emphasised that the guidance notes are not a substitute for legal advice and that businesses should seek independent advice tailored to their particular operations and exposure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
