National Security (Land Transfer) Regulations (Amendment)

Overview

The Statutory Rules 1940 No. 239, made under the National Security Act 1939-1940, were enacted to address the need for stringent controls on land transfers during a period of national emergency. This legislative instrument, promulgated by the Governor-General with the advice of the Federal Executive Council, was a response to the heightened risks posed by enemy aliens and other potentially hostile entities during wartime. The primary policy objective was to ensure that land transfers could not be used as a means for enemy interests to gain a foothold in Australia, thereby protecting national security. The Regulations amended the National Security (Land Transfer) Regulations to include new definitions and provisions that more comprehensively covered companies formed after a specific date in 1940 and held by certain classes of persons, such as enemy aliens, naturalized persons of enemy origin, and subjects of countries in enemy occupation. These amendments extended existing prohibitions on land transactions to include companies meeting these criteria and required additional disclosures in applications for consent.

Scope and Application

The National Security (Land Transfer) Regulations 1940, amended by Statutory Rules 1940, No. 239, apply to certain incorporated companies and individuals involved in land transactions within the Commonwealth of Australia. Specifically, these Regulations target companies formed on or after 24 July 1940, where at least one-third of the shares are held by one or more enemy aliens, naturalized persons of enemy origin, or subjects of countries in enemy occupation. The Regulations govern transactions involving these companies and mandate the need for consent from the Attorney-General for certain land transfers, effectively extending the prohibition on such transactions to include companies and their representatives. The Regulations also provide for applications to be made by the Chairman of Directors or the Secretary of the company, requiring detailed particulars of the shareholders’ names, addresses, nationality, and shareholdings. Any contracts or agreements entered into prior to the commencement of these Regulations that would otherwise be prohibited without consent are also subject to these provisions, necessitating the Attorney-General’s consent for the execution of instruments to give effect to such contracts.

Key Provisions

The main operative sections of these Regulations under the National Security Act 1939-1940 include amendments to the National Security (Land Transfer) Regulations, which expand the definition of "company to which these Regulations apply" (Regulation 2). This definition now includes any incorporated company with not more than twenty-five shareholders, where at least one-third in value of the shares are held by an enemy alien, a naturalized person of enemy origin, or a subject of a country in enemy occupation (Regulation 2(1)(a)-(c)). The Regulations further clarify that shares are deemed to be held by one or more of these classes of persons if they are held by another company that meets this criterion (Regulation 2(2)). Regulation 12 is amended to include companies to which these Regulations apply in the prohibition of mortgages to secure the balance of purchase money (Regulation 12). Regulation 15 is amended to require additional information in applications for the Attorney-General's consent, including the name, address of the registered office, and place of incorporation of the company, as well as full particulars of the shareholders (Regulation 15(1) and (1a)). A new Regulation 16a is inserted to extend the prohibition on transactions without consent to companies to which these Regulations apply or to persons acting on behalf of such companies (Regulation 16a). Finally, Regulation 16b stipulates that no person shall execute any instrument to give effect to a contract or agreement entered into before the commencement of these Regulations, if such a contract or agreement would have been prohibited without consent (Regulation 16b). These Regulations impose several obligations and requirements on the parties or entities they govern. Companies to which these Regulations apply must disclose detailed information about their shareholders and comply with the expanded prohibitions on certain transactions. Applications for the Attorney-General's consent must include specific information about the company and its shareholders, as outlined in the Regulations (Regulation 15(1) and (1a)). Additionally, any contracts or agreements entered into prior to the commencement of these Regulations that would have been prohibited without consent cannot be executed unless the consent of the Attorney-General is obtained (Regulation 16b). Failure to comply with these Regulations may result in various offences, penalties, or civil/criminal consequences. For instance, executing an instrument to give effect to a contract or agreement that would have been prohibited without consent, if entered into after the commencement of these Regulations, is prohibited (Regulation 16b). While the specific penalties for breaches are not detailed in the text, such breaches could potentially lead to legal action, fines, or other penalties under the National Security Act 1939-1940 or other relevant legislation. Compliance with these Regulations is crucial to avoid any adverse legal consequences.