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Yeah, you have heard correctly.
In Australia, media (print, movies, video games, etc) are required to be classified by the OFLC before they can be distributed.
This is unlike your MPAA ratings, which are not mandatory.
The highest rating that a video game can receive is MA15+, which means that it is restricted for people below 15.
Anything that is deemed to not meet the classification guidelines of MA15+ when submitted is rated RC (Refused Classification). This effectively bans the game from sale/distribution in Australia. It also means that if you try to privately import it, it may be seized by customs, and you may be prosecuted.
Similarly, if you try to import an RC movie into Australia, it may be seized and you may be prosecuted.
There has been some recent (poorly publicised) talk about an R rating for video games, however there has been some political opposition that has blocked this from happening. Even if this came about, games could still be banned if they didn't meet the guidelines for R rating. However, at least these are a bit more liberal than MA15+.
Personally, I think our system of censorship stinks. And it is at its very worst for video games. It is as if there is no recognition that anyone over the age of 18 would play a video game.
People do risk importing games - for example GTAIV was censored here, buy many bought it from overseas uncensored. However there are risks in doing this as detailed above.
We really need a better system. We also need a less paternalistic government.
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