Banking (Foreign Exchange) Regulations 1959 - Direction Relating to Foreign Currency Transactions and to the Former Federal Republic of Yugoslavia - Amendment to the Annex - Variation of Exemptions - Amendment to the Annexes (05/06/2009)

Overview

The Banking (Foreign Exchange) Regulations 1959 were amended to address the need for updating the financial sanctions imposed on individuals associated with the former Federal Republic of Yugoslavia. Enacted by the Reserve Bank of Australia pursuant to a directive from the Australian Government, these amendments aimed to refine the criteria for persons subject to financial sanctions, specifically targeting individuals convicted, indicted, or suspected of war crimes during the Balkans conflict, known supporters of the former Milosevic regime, and those suspected of assisting uncaptured International Criminal Tribunal for the Former Yugoslavia indictees. This amendment was necessary to ensure that the sanctions regime remained effective and relevant in light of evolving circumstances and new information regarding those involved in war crimes and regime support. The revised Annex, which now contains 223 persons, reflects the updated criteria and is referenced in various instruments, including directions and exemptions under the Banking (Foreign Exchange) Regulations 1959.

Scope and Application

The Banking (Foreign Exchange) Regulations 1959, administered by the Reserve Bank of Australia, pertains to the application of financial sanctions against specific individuals linked to the former Federal Republic of Yugoslavia. These sanctions target individuals convicted, indicted, or suspected of war crimes during the Balkans conflict, supporters of the former Milosevic regime, and individuals suspected of aiding indictees of the International Criminal Tribunal for the Former Yugoslavia. The scope of the regulations applies to any person or entity conducting transactions within Australia or involving Australian currency that may affect the listed individuals. The geographic reach of these regulations is national, as they are enforced across the Commonwealth of Australia. The Annex to the regulations, which lists the individuals subject to sanctions, has been amended to remove 55 individuals and add 196 new individuals, with 11 entries updated. These changes reflect the revised criteria set by the Australian Government and are considered part of the original instruments as per their publication in the Commonwealth of Australia Gazette. The Reserve Bank of Australia has determined that further consultation is not necessary as the amendments do not substantially alter the existing sanctions.

Key Provisions

The Banking (Foreign Exchange) Regulations 1959 provide the framework for the administration of financial sanctions against individuals associated with the former Federal Republic of Yugoslavia. Section 5 of these Regulations empowers the Reserve Bank to implement such sanctions in response to directives from the Australian Government. In the case of the updated Annex, which is referenced in multiple instruments, it now includes 223 individuals targeted for financial sanctions based on their involvement in war crimes, support of the former Milosevic regime, or suspected assistance to uncaptured indictees of the International Criminal Tribunal for the Former Yugoslavia. These changes are detailed in Attachment A and are considered amendments to the original instruments, which anticipated periodic reviews of the Annex. The obligations imposed by the Regulations on financial institutions and individuals include the prohibition of any financial transactions that facilitate or benefit the sanctioned individuals. This encompasses not only direct transactions but also any activities that could indirectly support or enable the circumvention of the sanctions. Financial institutions must ensure that their systems and procedures are robust enough to identify and prevent such transactions. This includes conducting thorough due diligence on customers and monitoring accounts for any suspicious activity that may link back to the sanctioned individuals. Failure to comply with the provisions of the Banking (Foreign Exchange) Regulations 1959 can result in significant legal consequences. Section 12 of the Regulations provides that any contravention of the sanctions may be subject to penalties. While the exact penalties are not specified in the explanatory statement, they could include fines and, in severe cases, imprisonment. The gravity of the offence and the intent behind the contravention are key factors in determining the appropriate penalty. Additionally, financial institutions found in breach of these sanctions may also face civil liabilities, including compensation for any losses incurred by affected parties.