National Security (Capital Issues) Regulations (Amendment)

Overview

The Statutory Rules of 1940, No. 83, titled "Regulations under the National Security Act 1939," were enacted to address the need for stringent controls on capital issues during a period of national emergency. This legislative instrument was made by the Governor-General of Australia, acting on the advice of the Federal Executive Council. The primary aim of these regulations was to preserve the validity of certain mortgages and charges, ensuring that financial transactions of a specific amount could continue without legal hindrance despite previous contraventions of the National Security Act. These regulations sought to maintain financial stability and continuity in the context of national security concerns, by allowing certain transactions to proceed unimpeded if specific conditions were met.

Scope and Application

The Statutory Rules 1940, No. 83, under the National Security Act 1939, represent a legislative instrument designed to amend the National Security (Capital Issues) Regulations, particularly concerning the preservation of the validity of certain mortgages and charges. These Regulations apply to any person or entity entering into a mortgage or charge that contravenes the existing provisions of the National Security Act, with a specific focus on transactions involving amounts not exceeding Five thousand pounds. The scope of these Regulations extends to the Commonwealth of Australia and are made under the authority of the Governor-General acting on the advice of the Federal Executive Council. These Regulations come into effect on the fifteenth day of May 1940 and include provisions for the preservation of the validity of certain mortgages or charges made prior to the commencement of this regulation. Importantly, the Regulations provide exemptions for mortgages or charges where the mortgagor or charger provides a statutory declaration confirming the absence of required consent from the Treasurer, provided no false or misleading statements are made. This legislative amendment ensures that such transactions retain their legal standing despite prior contraventions of the National Security Act.

Key Provisions

The Statutory Rules 1940, No. 83, made under the National Security Act 1939, introduce specific provisions to the National Security (Capital Issues) Regulations, with a commencement date of 15 May 1940. A new regulation, numbered 17, is added to the existing regulations. This regulation seeks to preserve the validity of certain mortgages or charges that were entered into in contravention of the National Security (Capital Issues) Regulations, provided the amount of the mortgage or charge does not exceed five thousand pounds (s.17(1)). This preservation of validity applies to mortgages or charges executed before the commencement of this regulation, as well as those executed after, provided the amount remains within the specified limit and certain conditions are met (s.17(1)-(3)). The regulations impose several obligations on parties involved in mortgages or charges. Firstly, if a mortgage or charge is made in contravention of the existing regulations, the mortgagor or charger must ensure that either the instrument of mortgage or charge contains a declaration by the mortgagor or charger, or, if there is no such instrument, the mortgagor or charger must deliver to the mortgagee or charger a statutory declaration that contains statements indicating that the consent of the Treasurer to the mortgage or charge is not required (s.17(1)(a)-(b)). Secondly, it is mandatory that no false or misleading statements are made in any declaration or statutory declaration under this provision (s.17(2)). Failure to comply with these obligations may lead to certain consequences. Under section 17(2) of the regulation, making false or misleading statements in any declaration or statutory declaration is an offence. The precise nature of the offence and its associated penalties are not explicitly stated within the text provided. However, given the context of national security regulations, it can be inferred that breaches may attract both civil and criminal penalties. The specifics of these penalties, including the maximum penalties, are not detailed within the provided excerpt but would likely be covered under the broader National Security Act 1939 or other relevant legislation.