BANKING (FOREIGN EXCHANGE) REGULATIONS 1959
AUTONOMOUS FINANCIAL SANCTIONS AGAINST THE FORMER FEDERAL REPUBLIC OF YUGOSLAVIA – REVOCATION OF INSTRUMENTS
EXPLANATORY STATEMENT
The Reserve Bank of Australia has been directed by the Australian Government to take the necessary steps to remove all autonomous targeted financial sanctions currently administered under the Banking (Foreign Exchange) Regulations 1959 (the “Banking Regulations”). The instruments effecting the revocation for each country the subject of targeted financial sanctions under the Banking Regulations will come into effect upon the commencement of the corresponding new legislative instrument enacted under the Autonomous Sanctions Regulations 2011. The new instruments will give effect to the new autonomous targeted financial sanctions regime for a specified country under the Autonomous Sanctions Regulations and will be administered by the Department of Foreign Affairs and Trade. This timing is to ensure continuity in the operation of Australia’s autonomous financial sanctions regime.
In accordance with a direction from the Treasurer, the Reserve Bank of Australia revokes the following legislative instruments pertaining to the former Federal Republic of Yugoslavia:
(i) Direction Relating To Foreign Currency Transactions And To The Former Federal Republic of Yugoslavia issued under regulation 5 of the Banking Regulations dated 5 April 2002, as published in the Commonwealth of Australia Gazette No. GN 20, 22 May 2002 (and as subsequently amended), relating to foreign currency transactions involving certain persons and entities in or associated with the former Federal Republic of Yugoslavia;
(ii) Variation of Exemption dated 4 October 2007, as published in the Commonwealth of Australia Gazette No. GN 40, 10 October 2007 (and as subsequently amended), relating to sub‑regulation 6(1) of the Banking Regulations and to certain persons and entities in or associated with the former Federal Republic of Yugoslavia; and
(iii) Variation of Exemption dated 17 October 2001, as published in the Commonwealth of Australia Gazette No. GN 42, 24 October 2001 (and as subsequently amended), relating to sub‑regulation 8(1)(a) of the Banking Regulations and to certain persons and entities in or associated with the former Federal Republic of Yugoslavia.
When the above revocations come into effect, the Reserve Bank of Australia will no longer play any role in the administration of autonomous targeted financial sanctions on behalf of the Australian government in relation to any individual or entities in or associated with the former Federal Republic of Yugoslavia.
The Department of Foreign Affairs and Trade has completed a comprehensive public consultation on the Autonomous Sanctions Regulations, and has published a report on the outcomes of this consultation. As the new autonomous targeted financial sanctions regime under Autonomous Sanctions Regulations will replace those under the Banking Regulations, the Reserve Bank is satisfied that wider consultation beyond those already undertaken by the Department of Foreign Affairs and Trade is unnecessary (sub-sections 18 (1) and 18 (2)(e) of the Legislative Instruments Act 2003).
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
REVOCATION OF VARIATIONS OF EXEMPTION AND DIRECTION RELATING TO FOREIGN CURRENCY TRANSACTIONS – FORMER FEDERAL REPUBLIC OF YUGOSLAVIA
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill/Legislative Instrument
As part of the Government’s policy to reform Australia’s autonomous sanctions regime, a new legislative framework has been implemented under the Autonomous Sanctions Act 2011. As part of this reform, the Reserve Bank of Australia has been directed by the Treasurer to take the necessary steps to remove all existing autonomous financial sanctions currently administered under the Banking (Foreign Exchange) Regulations 1959 (the “Banking Regulations”). This Legislative Instrument revokes the instruments which have implemented autonomous financial sanctions pertaining to the above country.
Human rights implications
This instrument will terminate the autonomous financial sanctions regime under the Banking Regulations pertaining to the above country. Once the revocation is in place, the prohibitions previously applicable to the affected groups of persons will be lifted. Removing the prohibitions without there being an equivalent sanction in place under another legislative instrument would promote the human rights and freedoms of those persons who were previously subject to the prohibitions.
Note that the revocation contained in this instrument will only come into effect when a new legislative instrument enacted by the Department of Foreign Affairs and Trade (“DFAT”) under the Autonomous Sanctions Regulations 2011 commences. The new legislative instrument will give effect to the new autonomous targeted financial sanctions regime for the above country under the Autonomous Sanctions Regulations, and be accompanied by a Human Rights Compatibility Statement prepared by DFAT. The timing of commencement of this instrument will ensure continuity in the operation of Australia’s autonomous financial sanctions pertaining to the above country.
Conclusion
This Legislative Instrument is compatible with human rights because it does not limit any human rights as they apply to Australia.
Reserve Bank of Australia
Overview
The Banking (Foreign Exchange) Regulations 1959, as amended, have been instrumental in implementing Australia’s autonomous financial sanctions, particularly targeting specific entities and individuals in or associated with the former Federal Republic of Yugoslavia. Enacted by the Parliament of Australia, these regulations were established to enforce sanctions and restrictions on foreign exchange transactions to support national security and foreign policy objectives. This instrument was introduced to address the need for an updated and more streamlined autonomous sanctions regime, aligned with contemporary international standards and practices. In line with the Government's policy to reform the existing sanctions framework, the Reserve Bank of Australia has been directed to revoke specific sanctions instruments under the Banking Regulations. This revocation ensures continuity in the operation of Australia's sanctions regime by transitioning to the new framework established under the Autonomous Sanctions Regulations 2011, administered by the Department of Foreign Affairs and Trade.
The revocation of the specified instruments pertaining to the former Federal Republic of Yugoslavia under the Banking Regulations is set to take effect upon the commencement of new legislative instruments enacted under the Autonomous Sanctions Regulations 2011. This transition ensures that the sanctions regime remains effective and consistent with Australia's international obligations and commitments. The Reserve Bank of Australia, in compliance with a direction from the Treasurer, will cease to administer these autonomous financial sanctions once the new legislative instruments come into effect. This Legislative Instrument has been prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, ensuring its compatibility with human rights, as it removes restrictions on affected groups without the presence of equivalent sanctions under another legislative instrument.
Scope and Application
The Banking (Foreign Exchange) Regulations 1959, as amended, previously governed certain financial sanctions targeting the former Federal Republic of Yugoslavia through a series of instruments issued by the Reserve Bank of Australia. These instruments included a Direction relating to Foreign Currency Transactions and to the Former Federal Republic of Yugoslavia, and variations of exemptions under sub-regulations 6(1) and 8(1)(a) of the Banking Regulations. These measures were in place to restrict financial transactions involving individuals and entities associated with the former Federal Republic of Yugoslavia. However, in line with the Australian government’s policy to reform the autonomous sanctions regime, the Reserve Bank of Australia has been directed to revoke these instruments. The revocations will take effect upon the commencement of new legislative instruments under the Autonomous Sanctions Regulations 2011, which will be enacted by the Department of Foreign Affairs and Trade. This transition ensures a seamless continuation of the sanctions regime for the specified country, thereby maintaining the integrity of Australia's sanctions policy. The revocations will lift the previously applicable prohibitions on the affected groups of persons, promoting their human rights and freedoms once the new regime is established.
Key Provisions
The Banking (Foreign Exchange) Regulations 1959, as amended, previously included specific provisions targeting financial sanctions against the former Federal Republic of Yugoslavia. The key operative sections that are now being revoked include the Direction Relating to Foreign Currency Transactions and to the Former Federal Republic of Yugoslavia (regulation 5) issued on 5 April 2002, and variations of exemptions under sub-regulations 6(1) and 8(1)(a) of the Banking Regulations, issued on 4 October 2007 and 17 October 2001, respectively. These sections imposed restrictions on foreign currency transactions involving certain persons and entities in or associated with the former Federal Republic of Yugoslavia.
The revocation of these instruments means that the Reserve Bank of Australia will no longer administer any autonomous targeted financial sanctions against individuals or entities linked to the former Federal Republic of Yugoslavia. This change takes effect upon the commencement of new legislative instruments enacted under the Autonomous Sanctions Regulations 2011 by the Department of Foreign Affairs and Trade (DFAT). These new instruments will establish the new regime for targeted financial sanctions for the specified country, ensuring a seamless transition and continuity in the administration of Australia’s sanctions policy.
The obligations and requirements imposed by these revoked instruments on the parties or entities they governed included compliance with restrictions on foreign currency transactions, reporting obligations, and adherence to the directives issued by the Reserve Bank of Australia. These obligations were designed to enforce the sanctions regime and ensure that no financial transactions occurred with the targeted individuals or entities without the necessary authorisation.
In terms of breaches, the Banking Regulations would have imposed penalties on those who failed to comply with the restrictions on foreign currency transactions. While the exact penalties are not specified in the Explanatory Statement, under the Banking Regulations, non-compliance could have led to civil penalties, including fines, and potentially criminal penalties, including imprisonment, depending on the severity of the breach. The revocation of these instruments means that any previous obligations under these sanctions are no longer applicable, and the new regime under the Autonomous Sanctions Regulations will outline any new penalties or consequences for non-compliance.
The revocation ensures that there is no gap in the administration of Australia's sanctions policy for the former Federal Republic of Yugoslavia. The new legislative instruments under the Autonomous Sanctions Regulations, to be enacted by DFAT, will provide the necessary legal framework to continue the targeted financial sanctions regime, ensuring that Australia's sanctions policy remains effective and aligned with international obligations. The compatibility statement confirms that the revocation of these instruments is in line with Australia’s human rights obligations, as it removes restrictions that were previously in place without any equivalent sanctions being introduced under the new regime.