- • COVID-19
- • Issues
- • Submissions
- • Industry In Focus
- • Reports
- • Independent strata study
- • Best Practice Workers Compensation Scheme
- • 2015 non insurance in the small to medium size enterprise sector
- • Analysis of demand for home and contents insurance by Dr. Tooth
- • Impact of Removing Stamp Duties on Insurance
- • Too Long; Didn’t Read – Enhancing General Insurance Disclosure
- • QLD Floods
- • Non-Insurance
- • Non-Insurance in the Small to Medium Sized Enterprise Sector
- • National Disability Insurance Scheme (NDIS): Funding the Unfunded Commitment
- • Consumer research on general insurance product disclosures
- • Property based funding options for the NSW Fire Services Levy
General Insurance and Financial Sanctions
Sanctions can include arms embargoes, travel restrictions, financial restrictions and import/export bans of certain commodities. They can be imposed against individuals, entities and/or countries.
The United Nations Security Council imposes sanctions to respond to situations that pose a threat to international peace and security. UN member states are obliged to implement UN Security Council sanctions domestically. As a member of the UN, Australia is legally bound to adopt these measures and implements its obligations under UN law through the Charter of the United Nations Act (COTUNA).
In addition to UN sanctions, the Australian Government imposes its own sanctions, known as autonomous sanctions, to bring pressure to bear on regimes that deny human rights and democratic freedoms.
Australian businesses, including insurers, brokers and agents, are subject to sanctions legislation and are responsible for ensuring that they do not provide services to sanctioned individuals or entities.
To comply with sanctions and avoid penalties, The Department of Foreign Affairs and Trade (DAFT) requires Australian businesses to:
- Regularly screen customers against the Consolidated Sanctions Lists published and maintained by DFAT. This contains the names of individuals, companies and countries against whom Australia has imposed financial sanctions. A list of currently sanctioned individuals can be found on the DFAT website.
- Freeze assets belonging to any customer(s) whose name appears on the lists published by DFAT.
- Notify the Australian Federal Police and seek their assistance to determine whether the customer whose name matches the name of a sanctioned individual in the DFAT lists is in fact the same individual.
In some circumstances insurance services may be a permissible dealing under the legislation. However, authorisation from DFAT is required before services or transactions can occur.
All businesses in the general insurance sector should make sure they are aware of the requirements under sanctions legislation, and undertake measures to ensure their business operations are compliant where necessary.