Breaching trade sanctions can lead to jail
International trade sanctions have been in the news with the Russian invasion of Ukraine, but what is not generally known is that breaching Australia’s imposition of trade sanctions can lead to jail.
Recent case highlights breaching trade sanctions a serious crime
In 2021 the NSW Supreme Court sentenced Sydney man Chan Han Choi, 62, to a total of three and a half years in jail in for trying to broker the sale of North Korean missile parts, coal and pig iron in contravention of Australian and United Nations trade sanctions.
Choi, a civil engineer, was born in South Korea, but had lived in Australia since 1987 and became a citizen in 2001. He walked free after being sentenced because he had been in custody from the time of his arrest in 2017.
The case, R v Choi (No 10)  NSWSC 891, demonstrates that breaching trade sanctions is a serious criminal offence.
Mr Choi was unsuccessful in his venture, but he still faced a maximum penalty of ten years in jail and fines of more than half a million dollars for breaching section 16 of the Autonomous Sanctions Act 2011.
He told the court he wanted to help the people of North Korea, who he believed were unfairly treated by the international sanctions, and to make some 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 offences have a corrosive effect on sanctions, undermining their purpose.
Heavy penalties under trade sanction laws
Sanction laws set heavy penalties for giving false or misleading information to authorities, of up to ten years in jail and $555,000 in fines.
Bodies corporate can be fined the greater of $2.2 million and three times the value of a transaction.
These are strict liability offences, so it is not necessary to prove any fault element such as intent, knowledge, recklessness or negligence for a body corporate to be found guilty.
Trade sanctions on Russia
With the speed of sanctions imposed on Russia in early 2022, it would be wise for companies and organisations to get legal advice while reviewing their operations to ensure they are not breaching any trade sanctions law.
Former Foreign Minister Marise Payne announced sanctions on Russia’s propagandists and spreaders of disinformation, as well as financial sanctions on Russian oligarchs and financial institutions.
Businesses could unknowingly be contravening sanctions if their operation connects with Russia, even indirectly, and should weigh their potential exposure to the risk of breaching sanctions.
Terms of the sanctions are broad. The government has said it will be targeting any person or entity that performs a function that is of economic or strategic significance to Russia.
Bodies corporate have a defence available if they can prove they took reasonable precautions and exercised due diligence to avoid breaching the sanction. Being able to establish that such precautions were taken could be crucial if sanctions have been unwittingly breached.