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Australian Sanctions
Compliance Guide › Counter-Terrorism and UN Sanctions

Last reviewed: May 2026  |  Counter-Terrorism UN Sanctions ISIL DPRK UNSCR 1373

Overview: UN Sanctions in Australia’s Legal Framework

While Australia’s most expansive current sanctions regimes operate under the Autonomous Sanctions Act
2011 (Russia, Myanmar, Belarus), a separate and equally binding set of obligations derives from
Australia’s UN Charter obligations, implemented domestically through the Charter of the United Nations
Act 1945 (Cth) and a suite of associated regulations.

The UN-based framework covers three principal areas relevant to financial services:

1. Counter-terrorism sanctions — targeting ISIL, Al-Qaida, and affiliated individuals and
   entities under the UNSCR 1267 regime;
2. DPRK proliferation sanctions — among the most comprehensive UN sanctions ever imposed,
   targeting North Korea’s nuclear weapons and ballistic missile programmes; and
3. The UNSCR 1373 obligation — a cross-cutting requirement to freeze terrorist financing
   assets, implemented in Australia through the terrorist organisation listing provisions of the Criminal Code
   Act 1995 and the DFAT Consolidated List.

The ISIL (Da’esh) and Al-Qaida Sanctions Regime

Legal Basis

The ISIL and Al-Qaida sanctions regime originates in UNSCR 1267 (1999) and has been significantly expanded and
refined through subsequent resolutions, most recently UNSCR 2368 (2017). In Australia, it is implemented through the
Charter of the United Nations (Sanctions — ISIL (Da’esh) and Al-Qaida) Regulations 2008 and
the corresponding DFAT Consolidated List entries.

Scope

The regime designates individuals and entities associated with ISIL, Al-Qaida, the Taliban (where applicable), and
associated groups. Listed persons and entities are subject to:

• An asset freeze — all funds and other financial assets must be frozen immediately;
• A travel ban — listed persons may not travel to or transit through Australia; and
• An arms embargo — no weapons, ammunition, or military material may be supplied.

For financial services businesses, the asset freeze is the critical obligation. Any transfer, withdrawal, or
transaction involving assets of a listed person or entity is prohibited.

The 1267 List vs. Australian Terrorist Organisation Listings

The UN Consolidated List for the ISIL/Al-Qaida regime is maintained by the UN Security Council’s
1267/1989/2253 Sanctions Committee. It is separate from — though often overlapping with —
Australia’s domestic listing of terrorist organisations under the Criminal Code Act 1995. Both apply
in Australia:

• The UN Consolidated List entries appear on the DFAT Consolidated List and create the TFS obligation under the
  Charter of the United Nations Act;
• Australian-listed terrorist organisations under the Criminal Code trigger separate obligations —
  including the prohibition on financing or materially supporting a listed terrorist organisation —
  regardless of whether the organisation is also on the UN Consolidated List.

DPRK Sanctions: One of the Most Comprehensive Regimes

Legal Basis

DPRK sanctions are implemented through the Charter of the United Nations (Sanctions — Democratic
People’s Republic of Korea) Regulations 2008, as substantially amended to incorporate successive
Security Council resolutions: UNSCR 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016),
2356 (2017), 2371 (2017), 2375 (2017), and 2397 (2017).

Scope of Prohibitions

DPRK sanctions are exceptionally broad and go well beyond TFS against named individuals:

DPRK Sanctions Evasion: The Principal Compliance Risk

DPRK is widely regarded by compliance professionals as the highest-risk UN sanctions regime for financial
institutions, because North Korea has developed highly sophisticated sanctions evasion infrastructure. Key
typologies include:

• Cryptocurrency-based evasion: DPRK state-sponsored cyber actors (including the Lazarus Group)
  steal and launder cryptocurrency from exchanges and DeFi protocols globally. Proceeds are layered through mixers
  and cross-chain bridges before being exchanged for fiat currency through jurisdictions with weaker crypto AML
  frameworks;
• Shell company networks: DPRK-controlled shell companies in China, South-East Asia, and
  elsewhere conduct trade and financial transactions on behalf of DPRK entities, with no DPRK branding visible;
• Correspondent banking abuse: Financial transactions structured to avoid any DPRK identifier in
  payment messaging, using multiple intermediary institutions;
• Ship-to-ship transfers: Sanctioned commodities (notably oil) transferred at sea to avoid port
  records linking cargo to DPRK; and
• IT worker income: DPRK nationals posing as freelance IT workers from third countries,
  generating income remitted to DPRK through informal channels.

UNSCR 1373: The Counter-Terrorist Financing Obligation

UNSCR 1373 (2001) is qualitatively different from designation-based sanctions regimes. Rather than creating a list
of specific designated persons, it imposes a general obligation on all UN member states to:

• Criminalise the financing of terrorism;
• Freeze without delay the funds and other financial assets of persons who commit, or attempt to commit, or
  facilitate or participate in the commission of, terrorist acts; and
• Prohibit all persons within the jurisdiction from making any funds, financial assets, or economic resources
  available to persons involved in terrorist acts.

In Australia, this obligation is implemented through:

• The terrorist organisation listing regime under Division 102 of the Criminal Code Act 1995, which
  designates specific organisations as “listed terrorist organisations”;
• The TFS obligations for listed terrorist organisations and their members under the DFAT Consolidated List; and
• The counter-terrorism financing provisions of the AML/CTF Act 2006, which require reporting entities to
  have systems to identify and report on terrorist financing suspicions.

Compliance Framework: UN Sanctions in Practice

Frequently Asked Questions

Is screening the DFAT Consolidated List sufficient for counter-terrorism sanctions, or must we also screen the
UN Consolidated List separately?

The DFAT Consolidated List incorporates all UN Consolidated List entries relevant to Australia’s legal
obligations, including ISIL/Al-Qaida and DPRK designations. If your screening system draws from the current DFAT
list, you are capturing the UN-mandated entries. However, there can be a short lag between a UN designation and
its appearance on the DFAT list. For highest-risk customers, direct screening against the UN Consolidated List
(available at un.org) provides an additional safeguard and is consistent with best practice.

Our institution processes many small remittances to South-East Asia and the Middle East. How should we approach
DPRK and ISIL screening for these transactions?

High-volume low-value remittance businesses face a particular challenge because the absolute number of
transactions makes enhanced screening on every payment impractical. A risk-based approach requires: (1) automated
name screening on every transaction against DFAT, UN, and OFAC lists; (2) enhanced due diligence triggered for
payments to corridors identified as high-risk for DPRK or ISIL connections; (3) transaction monitoring rules
calibrated to detect structuring, unusual patterns, and high-risk beneficiary account characteristics; and (4) SMR
submission for any suspicious transaction where terrorist financing or DPRK evasion is suspected.

We process payments for a customer who provides IT freelancing services and receives regular payments from
overseas clients. How should we assess DPRK risk?

DPRK IT worker income is a recognised and growing evasion typology. Red flags include: payments from multiple
jurisdictions with no consistent client profile; large or unusual payment amounts inconsistent with the stated
services; payments routed through jurisdictions with known DPRK IT worker presence (China, Laos, Vietnam); and
reluctance to provide evidence of the underlying client relationship or service contract. Enhanced due diligence
should include verified evidence of the client relationship, source of funds analysis, and verification of the
customer’s actual location and identity. Escalate to your MLCO if the DPRK nexus cannot be excluded.

Is it possible to obtain a permit to provide financial services to a UN-designated entity in exceptional
circumstances?

For UN-mandated sanctions (Charter of the United Nations Act), DFAT can issue permits for conduct that would
otherwise be prohibited, subject to the relevant UN Security Council Committee’s approval in some cases.
Humanitarian exemptions, diplomatic exemptions, and exceptions for legal proceedings may be available depending on
the specific regime and circumstances. The process is demanding and not routine — engage DFAT’s
Australian Sanctions Office early and obtain independent legal advice. Under no circumstances should business
proceed on the assumption a permit will be granted before it is formally issued.

What is the relationship between the criminal organisation listing under the Criminal Code and the DFAT
Consolidated List TFS obligation?

The two frameworks operate in parallel and have different legal consequences. The Criminal Code terrorist
organisation listing (Division 102) creates criminal liability for membership, support, and financing of the
listed organisation — which is enforced by the AFP and prosecuted by the CDPP. The DFAT Consolidated List
TFS obligation applies to specific designated persons and entities and creates a financial services asset freeze
obligation enforced under the Autonomous Sanctions Act and Charter of the United Nations Act. A person connected
to a listed terrorist organisation may trigger obligations under both frameworks simultaneously. Compliance teams
should ensure their SMR and escalation procedures cover both the TFS notification pathway (DFAT/AFP) and the
AUSTRAC SMR pathway.

This article is general information only and does not constitute legal advice. Sanctions law is subject to
frequent change. Always verify current designations against the live DFAT Consolidated List and seek independent
legal advice for specific situations.