I refer to your memorandum dated 6th February, 1946, on the above subject.

On 24th July, 1940, the Governor-General, by Customs Proclamation No. 498, prohibited trading with persons carrying on business in enemy territory.

‘Enemy territory’ is defined therein as—

(a)  any area which is under the sovereignty of a Power with which His Majesty is for the time being at war, not being an area in the occupation of His Majesty or of a Power allied with His Majesty;

(b)  any area which is in the occupation of a Power with which His Majesty is for the time being at war or declared to be in such occupation by the Minister by notice published in the Gazette;  or

(c)  any other area which the Minister, by notice published in the Gazette, declares to be enemy territory for the purposes of this Proclamation.

‘The Minister’ means the Minister of State for Trade and Customs.

It appears from your letter to the Department of Trade and Customs that the Commonwealth Government at no time recognised the annexation of Albania and I understand that Italy has, since the cessation of hostilities, renounced any annexation of Albania. On either ground, Albania would not now, in my view, be considered to be an area under the sovereignty of Italy.

Whether Albania can be said to be in the occupation of a Power with which His Majesty is for the time being at war within the meaning of paragraph (b) of the definition of ‘enemy territory’ supra is a question of fact to be determined by, amongst other things, the degree of occupation (Sovfracht Case 1943 A.C. 203). If Albania is not now occupied by Italy to the extent that its local authorities cannot, without interference, carry on their normal activities, Albania is not, in my opinion, ‘enemy territory’ for the purposes of the above definition.

‘The temporary occupation of a territory by an enemy’s forces’ does not per se necessarily convert such territory into hostile territory or its inhabitants into enemies, but if, as a result of occupation, Italy is provisionally in control of Albania at the material time and is exercising some kind of government or administration over it, Albania would acquire the status of an ‘enemy territory’.

[Vol. 37, p. 81]