STATUTORY RULES.
1940. No. 73.
REGULATION UNDER THE NATIONAL SECURITY ACT 1939.*
I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulation under the National Security Act 1939.
Dated this thirtieth day of April, 1940.
GOWRIE
Governor-General.
By His Excellency’s Command,
PERCY C. SPENDER
for and on behalf of the Minister of State
for Defence Co-ordination.
National Security (Securities) Regulations.†
Control of Securities.
Regulation 5 of the National Security (Securities) Regulations is amended—
(a) by omitting from sub-regulation (1.) the words “A person” and inserting in their stead the words “Subject to this regulation, a person”;
(b) by inserting in paragraph (c) of sub-regulation (2.), after the word “securities”, the words “or the proceeds thereof”;
(c) by inserting in paragraph (b) of sub-regulation (5.), after the word “securities”, the words “or the proceeds thereof”; and
(d) by inserting after sub-regulation (10.) the following sub-regulations:—
“(10a.) Where in accordance with the requirements of any order under this regulation any person sells any security or his interest therein and then pays the net proceeds of such sale to the credit of an account specified in the order, the Treasurer shall, on receipt of advice of such payment and on compliance by the owner with all the requirements of the order, pay to the owner or as
* Notified in the Commonwealth Gazette on 30th April, 1940.
† Statutory Rules 1939, No. 113, as amended by Statutory Rules 1939, No. 150.
2177.—Price 3D.
the owner directs an amount equal to the value of the net proceeds converted into Australian currency at the current rate of exchange on the date on which the net proceeds are paid to the credit of the account, but, in case of dispute, the amount to be paid to the owner shall be determined by an action for compensation by the owner against the Commonwealth.
“(10b.) For the purposes of the last preceding sub-regulation, “current rate of exchange” means the telegraphic transfer buying rate, as fixed by the Commonwealth Bank of Australia, on the place at which the net proceeds are paid to the credit of the account.”.
By Authority. L. F. Johnston, Commonwealth Government Printer, Canberra.
Overview
The National Security (Securities) Regulations 1940 were enacted by the Governor-General in Council under the authority of the National Security Act 1939. These regulations were introduced to address the need for stringent control over securities and their proceeds during times of national security concern. The aim was to facilitate the management and regulation of securities transactions in the interest of national security, particularly in the context of World War II. The regulations allow for the control of securities and their proceeds by requiring the payment of net proceeds from the sale of securities to a specified account, with provisions for reimbursement to the owner under certain conditions. This legislative instrument underscores the policy objective of ensuring that financial transactions do not compromise national security interests during critical periods.
Scope and Application
The National Security (Securities) Regulations, established under the National Security Act 1939, apply to any person who is required to sell securities or their proceeds as per the orders issued under this regulation. The regulation mandates that any net proceeds from the sale of these securities must be paid into a specified account as outlined in the relevant order. Furthermore, it stipulates that the Treasurer will compensate the owner of the securities with an amount equivalent to the net proceeds converted into Australian currency at the prevailing exchange rate on the date the proceeds are deposited into the account. In cases of dispute, the compensation amount will be determined through a legal action for compensation by the owner against the Commonwealth. The regulation extends its applicability across the Commonwealth, impacting any individual or entity subject to the orders under the National Security Act 1939. There are no exclusions or exemptions mentioned in the text, and the regulation may be further extended or restricted through subordinate instruments.
Key Provisions
The main operative sections of this legislative instrument, specifically Regulation 5 of the National Security (Securities) Regulations, detail the control of securities and their proceeds. The regulation allows for the sale of securities and their proceeds under specific conditions (Reg. 5(1)). It also mandates the payment of the proceeds from such sales to a specified account as outlined in any given order (Reg. 5(2)(c) and (b)). Notably, the regulation introduces new sub-regulations 10a and 10b, which address the payment process for the net proceeds of the sale. These provisions require the Treasurer to convert the proceeds into Australian currency at the current rate of exchange and pay the owner, or the owner's designated party, unless disputed (Reg. 5(10a)). In cases of dispute, the owner can seek compensation through legal action against the Commonwealth (Reg. 5(10a)). The regulation also defines the term "current rate of exchange" as the telegraphic transfer buying rate set by the Commonwealth Bank of Australia (Reg. 5(10b)).
These regulations impose specific obligations on individuals and entities involved in the sale of securities. They must adhere to the requirements of any order issued under the regulation, ensuring that the proceeds from the sale of securities or their proceeds are paid to the specified account. The Treasurer is obligated to convert these proceeds into Australian currency at the prevailing exchange rate and remit the amount to the owner or the owner's designated party upon compliance with all requirements of the order. In cases of dispute, the owner retains the right to pursue legal action against the Commonwealth to determine the rightful amount owed.
The regulations do not explicitly outline offences or penalties for breach. However, failure to comply with the requirements of an order, such as not adhering to the sale and payment procedures, could lead to disputes. In such cases, the owner may initiate legal proceedings against the Commonwealth to resolve the dispute. The potential civil consequences include the owner being entitled to compensation if the Commonwealth's actions are found to be in breach of the regulation. The maximum penalties or specific consequences for non-compliance are not detailed within the regulation itself, leaving the resolution to judicial interpretation and the outcomes of any legal actions taken by the aggrieved party.