The sanctions regime under which Australia freezes the assets of suspected and convicted terrorists appears to have been operating illegally for two decades, because the Department of Foreign Affairs and Trade failed to entrench it properly in law.
The apparent legal blunder was discovered and fixed six weeks ago, at the same time as Foreign Minister Marise Payne was drafting plans to extend the listing regime to include those involved in cyber attacks.
On May 26, the department suddenly converted 21 separate written listings, dating back to 2001, into formal regulations. The listings collectively name hundreds of people and organisations as being subject to sanctions law.
In conjunction with criminal law, they also enable the prosecution of anyone who finances people named in them, widening the net of those potentially affected.
Previously published only in the Commonwealth Gazette, the listings have now been turned into delegated legislation and added to the Federal Register of Legislation, strengthening their status in law.
The Saturday Paper has been told the regulations are not retrospective.
The department’s sudden move raises questions about what actions were taken under the earlier regime, whether those actions were lawful, and whether anyone may have a compensation claim as a result.
The Saturday Paper initially submitted questions about the legal change to both the Attorney-General’s and Foreign Affairs departments almost two weeks ago. The former directed all questions to the latter.
Foreign Affairs has since refused to confirm or deny if it acted unlawfully or if it may be exposed to legal action.
It has also refused to say why the legal change was made. The government is citing “legal professional privilege”.
Eminent barrister and former independent security legislation monitor Bret Walker, SC, says refusing to explain is not good enough.
“The notion of enacting a statute without parliament being told why is self-evidently wrong in a democracy,” Walker tells The Saturday Paper. “But when it comes to legally effective decisions under a statute, it is equally important that there be an explanation of why they are being made, especially when important rights such as property rights are being affected. If there has been a slip or omission or mistake in following necessary procedures, it should be revealed and explained.”
Walker says embarrassment does not justify secrecy. “If you’re embarrassed, that’s because something is being revealed that people should know.”
The existing sanctions regime covers some of Australia’s most notorious terrorism figures. They include the man jailed in New Zealand for the 2019 mass murder of worshippers at two Christchurch mosques, as well as Islamic State fighter Neil Prakash, controversially stripped of Australian citizenship in 2018, and in jail in Turkey.
Until late last year, they also included another Australian Islamic State fighter, Khaled Sharrouf.
Originally from Sydney, Sharrouf is believed to have died in Syria in the past six years.
Earlier this year, five Yazidi women who live overseas made a High Court bid to claim compensation from the New South Wales government.
They had alleged it was partly responsible for Sharrouf enslaving them in his home in Syria in 2014 and subjecting them to rape and other violent and degrading treatment and threats.
The women say that since 2016 they have helped the Australian Federal Police investigate Sharrouf. They initially sought compensation via the NSW Victims’ Rights and Support Act, arguing his alleged behaviour should fall within its reach. But a NSW tribunal rejected their bid and the High Court declined to hear the case.
That case was mounted on grounds unconnected to the sanctions regime but the applicants also wrote to Minister Payne in April, seeking details of any of Sharrouf’s assets, which the government may have frozen.
This may have been what prompted the government to re-examine the sanctions regime.
The listings – historical and current – are consolidated in a spreadsheet the department is required to publish on its website. That spreadsheet currently contains 6949 entries for individuals or entities.
The Saturday Paper has been told only 78 individuals are subject to current asset-freezing provisions. It is not clear how many – if any – have had assets frozen.
This part of the sanctions regime was introduced in 2001 to implement United Nations Security Council resolution 1373, passed in the immediate aftermath of the September 11 terrorist attacks.
Under Australia’s Charter of the United Nations Act, underpinning this section, the foreign minister makes listings naming people and organisations to be subject to financial sanctions.
To be valid, the act says the listings need only be published in the Gazette. It does not say they must be entrenched in their own separate legislation.
But another act – the Legislation Act – suggests something different.
Section 12(2) of that act says no instrument can be used to disadvantage a person who is subject to it, nor to impose a liability on them, before it is registered.
While there is a regulation under the UN charter act that authorised the instruments, it seems that may not have been direct enough.
As the listings themselves are what ultimately confer disadvantage or impose liability – by expressly naming the people subject to sanctions – it appears they, too, need to be specifically enshrined in law and registered.
The May 26 registration aligned the listings with the requirements of the Legislation Act.
The affected listings were made by five separate foreign ministers – Alexander Downer, Stephen Smith, Kevin Rudd, Julie Bishop and Marise Payne.
The registration move came to light when the parliamentary joint committee on human rights took a closer look at 12 of the new counterterrorism regulations, those containing the names of individuals.
The committee routinely scrutinises all legislation – acts that have passed through parliament and regulations that government alone has made – for its impact on human rights.
In its most recent scrutiny report, tabled on June 23, the committee highlighted the apparent past conflict with the Legislation Act.
Although its remit only extends to existing legislation, it queried whether the preregistration listings regime had been lawful.
“The committee notes with some concern,” the report said, “that while the legislative instruments were made over the last 20 years, they were only recently registered on the Federal Register of Legislation – the effect of which appears to be that before they were registered the instruments did not apply to persons to the extent that they disadvantaged or imposed liabilities on them.”
In other words, the listings could not have legally applied until they were registered.
The committee also stated that it considers the regulations to be disallowable, meaning the senate can vote to veto them. The government insists they are exempt from disallowance, which would put them beyond parliament’s reach and ensure they can’t be undone.
Disallowance could potentially again jeopardise the sanctions regime’s legal status.
Committee chair Anne Webster, a Nationals MP, wrote to Payne after the report was tabled, seeking clarification about the new regulations.
“What remedies, if any, does a person against whom action has been taken pursuant to these listings have?” the committee asked.
It also asked what the government had done about the committee’s previous recommendation that the reasons for each listing be published, along with details – or at least the value – of any assets frozen.
The minister is considering what the committee has raised.
Separately, the senate’s committee for the scrutiny of delegated legislation is expected to also look at the instruments at its next meeting and determine whether to investigate the disallowance issue.
The Saturday Paper asked the Foreign Affairs department a series of written questions about the sanctions regime, including whether any person was disadvantaged or had a liability imposed on them under the preregistration listings. It refused to answer.
It was also asked several times to clarify if the preregistration instruments were lawful. Again, it refused.
Instead, it responded, using a form of words it would not explain but which confirmed the listings had previously conflicted with the Legislation Act.
“Registration does not affect the validity of listings,” the response said. “Unlawful conduct under Australian sanctions law undertaken before the listings were registered was unlawful then and remains unlawful today. Registration of the listings brings them in line with the processes set out in the Legislation Act.”
The department said it was not aware of any person claiming to have been disadvantaged by the preregistration listings “or seeking a remedy for any such disadvantage”.
Australian National University professor of international law Don Rothwell says the human rights committee is “raising real issues as to why these instruments weren’t properly registered”.
“If there are irregularities in Commonwealth instruments going back 20 years, that is a huge issue,” Rothwell tells The Saturday Paper. “The question is, if they’ve done that with this, what else have they forgotten?”
This is not the first sanctions-regime criticism levelled at the department. In 2013, when he was independent security legislation monitor, Bret Walker blasted both the department and the Australian Federal Police for failing to keep proper records of frozen assets.
Walker also criticised the department for refusing to give reasons when the minister declined applications to revoke listings. Walker said it “raised questions about the fairness”.
Recommendations he made to improve that fairness have never been taken up.
In his report, Walker noted that those carrying out the UN Security Council obligation to freeze terrorists’ assets must also act within international human rights law.
He noted Australia’s Charter of the United Nations Act included an immunity for “actions done in good faith and without negligence”. He said this was probably an “appropriate protection for officers of the Commonwealth and others attempting to do their duty”.
Walker also noted that it provided for compensation only under limited circumstances. But he suggested at the time that wider claims might be possible because there were other “situations where a person could suffer loss by mistakes in administration of the listing section”.
Anne Webster told The Saturday Paper that her committee is expecting to receive a response from Minister Payne by July 16.
This article was first published in the print edition of The Saturday Paper on July 10, 2021 as "Rush to fix ‘unlawful’ list".
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