New Zealand sanctions against Russia appear to be biting, with trade dropping significantly in the wake of the Ukraine invasion. But with difficulties in enforcement and questions about how to handle similar events in future, an independent panel will look at how the Government should handle human rights breaches abroad

An expert group has been set up to advise the Government on how to take on human rights violators across the globe – including whether or not to move ahead with an autonomous sanctions regime.

The group’s establishment comes as a review of New Zealand sanctions against Russia has identified potential difficulties with identifying breaches and taking enforcement action.

The Government has faced growing pressure in recent years to respond more strongly to human rights violations involving our international partners.

* NZ exports to Russia plummet 90% after sanctions
* How do NZ’s sanctions against Russia work?
* The ins and outs of autonomous sanctions

In 2021, Parliament unanimously supported a motion declaring concern about “severe human rights abuses” perpetrated against Uyghur Muslims in China’s Xinjiang province, while Russia’s invasion of Ukraine last year showed gaps in the current system.

In a 2021 interview, Foreign Affairs Minister Nanaia Mahuta told Newsroom she was working to develop a human rights framework that would allow a more consistent approach to alleged breaches overseas.

A spokeswoman for the Ministry of Foreign Affairs and Trade told Newsroom chief executive Chris Seed had appointed an independent advisory group to provide advice on how best to respond to “grave international situations of concern involving threats to peace and security and breaches of human rights”.

The group would consider which foreign policy tools were most suitable for New Zealand, including the advantages and disadvantages of an autonomous sanctions regime.

The spokeswoman said there was no set timeframe for the report, which would be used to inform further advice from officials to the Government on the policy options.

The group is being chaired by former New Zealand UN ambassador Colin Keating. Former chief human rights commissioner Rosslyn Noonan, Centre for Strategic Studies director David Capie, and University of Waikato law professor Valmaine Toki are the other members.

‘A complex enforcement picture’

The Government inherited autonomous sanctions legislation from the National administration upon taking office in 2017 but eventually pulled it, while a near-identical member’s bill from National foreign affairs spokesman Gerry Brownlee failed at its first reading in 2021.

But with Moscow able to block any attempted sanctions through the United Nations Security Council as one of its five permanent members, the Government hurriedly drafted and passed the Russia Sanctions Act in March last year so it could punish those associated with the war.

But a post-implementation review of the legislation – carried out after the fact due to the hurried nature of its introduction – has identified a number of potential problems with the sanctions regime.

Agencies tasked with overseeing the Anti-Money Laundering and Countering Financing of Terrorism Act currently had no mandate to assess compliance with the sanctions. It was “challenging” to identify the associates, relatives and planes or ships of those who had been sanctioned, which added to “a complex enforcement picture were there to be a significant sanctions breach”.

Further work was underway to clarify the criteria and conditions under which any enforcement action could be taken in response to a sanctions breach or evasion, the report said, “as well as who is responsible for coordination, investigation and prosecution activities”.

Officials considered three options for responding to Russia’s invasion: the status quo involving limited travel and export bans, the development of autonomous sanctions legislation, and a targeted law designed specifically for the situation in Ukraine.

The status quo was deemed insufficient as it would put Aotearoa “out of step with a large grouping of concerned states” and undermine the country’s reputation as a supporter of the international rules-based system, while an autonomous sanctions regime would take too long to develop “because of the expansive scope and significant additional policy issues to be considered”.

“Sanctions alone will not end the war but they do massively complicate Russia’s ability to wage war and constrict Russia’s economy.”
– MFAT spokeswoman

The report said it was difficult to quantify the costs of compliance for Kiwis, with officials relying on reports from affected businesses. MFAT had reprioritised $1.7 million to cover the costs of the taskforce and advice until mid-2023, and other agencies had seconded staff to provide expertise.

Many benefits of the sanctions regime were not quantifiable at all, covering immeasurable values “such as preserving and bolstering New Zealand’s reputation as a defender of the rules-based system and supporter of respect for territorial integrity”.

However, anecdotal information suggested the benefits of the regime had outweighed any costs, sending a clear message to Russia and supporting the efforts of like-minded partners.

More than 1300 people and entities had been targeted in 15 rounds of sanctions to date. New Zealand’s trade with Russia had dropped by roughly 90 percent, due to a combination of sanction-related tariffs and Kiwi businesses deciding to withdraw from the Russian market. 

The MFAT spokeswoman said the Russia sanctions had “effectively decoupled the New Zealand and Russian economies”, with the cumulative effect of global action against Vladimir Putin’s regime causing the country’s GDP to drop by about 7 percent in 2022.

“Sanctions alone will not end the war but they do massively complicate Russia’s ability to wage war and constrict Russia’s economy.”

Officials were confident the regulatory system underpinning the sanctions regime was fit for purpose, and that potential breaches would be investigated and responded to – including through prosecutions if appropriate.

Former defence minister Ron Mark, who has travelled to Ukraine since the invasion to help with aid work and support, said it was unclear why the Government needed to create an independent panel to look at options for tackling human rights abuses.

If ministers had concerns with the quality of MFAT’s advice, that should be dealt with through changes to the ministry, Mark said.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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