Banking (Foreign Exchange) Regulations (Amendment)

Overview

The Banking (Foreign Exchange) Regulations 1952 were enacted under section 29 of the Banking Act 1945 to address the need for strict control over the outflow of Australian currency in order to conserve the foreign exchange resources of the Commonwealth. The legislation was introduced in response to a perceived need to protect the national interest during a period of economic uncertainty, particularly in relation to maintaining the stability of the Australian currency and ensuring adequate foreign exchange reserves. The Governor-General, acting on the advice of the Federal Executive Council, issued the regulations to provide a framework for controlling the export of Australian currency via money orders. The policy objective of the regulation was to restrict the amount of money that could be sent out of Australia by means of a money order, specifying different limits for money orders payable within the sterling area and those payable in other countries. The regulation also outlined the permissible purposes for such money transfers, including sustenance payments, gifts, subscriptions, and tax payments, among others.

Scope and Application

The Regulation under Section 29 of the Banking Act 1945 applies to all individuals and entities within the Commonwealth of Australia, governing the control of foreign exchange. Specifically, it regulates the sending or taking of Australian currency out of the country via money orders, establishing strict limits on the amounts permissible. The regulation is designed to conserve the foreign exchange resources of the Commonwealth, thus safeguarding the national interest. It imposes a maximum limit of five pounds weekly for payments to individuals or entities in the sterling area and five pounds monthly for payments to those in other countries. The purposes for these transactions are narrowly defined, including sustenance payments, gifts, subscriptions, and government fees, among others. The regulation extends to any person or body corporate permanently residing outside Australia but explicitly excludes other associations or bodies incorporated abroad. The regulation is enforced through approved forms for applications, which must be submitted to the Postmaster-General, thereby ensuring compliance and oversight over foreign exchange activities.

Key Provisions

The primary operative section of this regulation (Regulation 7) sets out the conditions under which money orders can be taken or sent out of Australia. Section 7(1) prohibits the taking or sending of money out of Australia by means of a money order unless done in accordance with the provisions of the regulation. The regulation specifies the maximum amounts that can be taken or sent by an individual to recipients in different countries. Specifically, section 7(2) states that the amount for any one person to a person or persons in a country or countries included in the sterling area cannot exceed five pounds in any week, while the amount to a person or persons in any other country or countries cannot exceed five pounds in any month. Section 7(4) lists the permissible purposes for sending money, which include payment of sustenance, gifts or donations, subscriptions, fees, taxes, rents, and contributions to insurance funds. The regulation imposes several obligations on individuals and entities that wish to send money out of Australia via money orders. Firstly, any individual or entity wishing to send money must comply with the limits set out in sections 7(2) and 7(3) by ensuring that the amount sent does not exceed the specified limits. Secondly, the purpose of the money transfer must fall within one of the categories listed in section 7(4). Thirdly, an application for the issuance of each money order payable out of Australia must be made in accordance with a form approved by the Postmaster-General, as specified in section 7(5). These obligations ensure that money transfers are conducted in a manner that aligns with the regulation's intent to conserve foreign exchange resources. Breach of the provisions set out in this regulation can lead to legal consequences. Specifically, any person who contravenes the regulation by taking or sending money out of Australia by means of a money order in a manner not permitted by the regulation is liable to penalties. While the regulation does not explicitly state the penalties, breaches of regulations made under the Banking Act 1945 can result in significant fines and, in severe cases, imprisonment. The exact penalties would be determined by the courts based on the specifics of the breach and any relevant case law.