Banking (Foreign Exchange) Regulations 1959 - Revocation of Variation of Exemption and Variation of Exemption (subregulation 6(1)) (17/10/2001)

Overview

The Banking (Foreign Exchange) Regulations Revocation of Variation of Exemption and Variation of Exemption is a legislative instrument issued by the Reserve Bank of Australia in 2001, as an amendment to the Banking (Foreign Exchange) Regulations. This revocation and variation were enacted to address the issue of currency transactions related to entities associated with the Federal Republic of Yugoslavia. The problem it was introduced to address was the need to restrict and regulate the movement of Australian currency derived from property, securities, or funds associated with specific Yugoslav entities, specifically to curb financial activities that could be linked to the activities of these entities. The policy objective of this legislative instrument was to ensure that transactions involving these entities, particularly those exceeding a value of A$100,000, required explicit approval from the Reserve Bank of Australia. This was aimed at maintaining financial stability and ensuring compliance with international sanctions and economic measures against the Federal Republic of Yugoslavia.

Scope and Application

The Banking (Foreign Exchange) Regulations, as amended by this legislative instrument, apply to any person or entity involved in the movement of Australian currency derived from property, securities, or funds associated with the Embassy of the Federal Republic of Yugoslavia, the Consulate-General of the Federal Republic of Yugoslavia, or Narodna Banka Jugoslavije (including Banque Nationale de Yugoslavie). These regulations specifically address transactions exceeding a value of A$100,000. The legislation has a national reach within Australia, governed by the Commonwealth. The revocation of the exemption removes previous allowances for certain transactions without the need for prior approval, while the variation mandates that all transactions exceeding A$100,000 now require specific prior approval from the Reserve Bank of Australia. Applications for such approval should be directed to the Manager, Market Analysis, International Department of the Reserve Bank in Sydney. The changes outlined in this legislative instrument come into effect on 17 October 2001.

Key Provisions

The Banking (Foreign Exchange) Regulations, as amended by this legislative instrument, contain several significant provisions. The key operative sections include the revocation of a previous variation of exemption dated 22 December 1995 (paragraph 1) and the variation of an exemption dated 29 June 1990 (paragraph 2). These changes pertain to transactions involving Australian currency derived from specific entities, notably the Embassy of the Federal Republic of Yugoslavia, the Consulate-General of the Federal Republic of Yugoslavia, and Narodna Banka Jugoslavije (including Banque Nationale de Yugoslavie). Transactions exceeding A$100,000 now require specific prior approval from the Reserve Bank of Australia (paragraph 2). The Act imposes specific obligations on parties and entities governed by these regulations. Firstly, the revocation of the previous exemption means that any transactions previously exempt under that exemption are no longer exempt and must comply with the general provisions of the Banking (Foreign Exchange) Regulations. Secondly, the variation of the exemption imposes a new requirement that any transactions exceeding A$100,000 involving the specified entities must obtain prior approval from the Reserve Bank of Australia (paragraph 2). This approval process involves submitting an application to the Manager, Market Analysis, International Department of the Reserve Bank in Sydney. There are potential consequences for breaches of these provisions. Although the legislative instrument does not explicitly outline offences, penalties, or civil/criminal consequences, it is reasonable to infer that failure to obtain the required prior approval for transactions exceeding A$100,000 could lead to enforcement actions by the Reserve Bank of Australia. Such actions might include fines, penalties, or other regulatory sanctions. The specifics of these consequences would be determined by the Reserve Bank of Australia in accordance with the broader regulatory framework and applicable laws.