Police will return seized art posters to a Canberra music venue that depicted Donald Trump and other world leaders in Nazi uniforms, confirming there would be no charges laid under new hate symbol laws.

The ACT senator David Pocock demanded the police should apologise to the venue’s owner while describing the new laws as “flawed and rushed”.

Dissent Cafe and Bar in Canberra’s CBD had displayed several of the posters by the protest artist group Grow Up Arts showing Trump, the Israeli president, Benjamin Netanyahu, the tech billionaire Elon Musk, the US vice-president, JD Vance, and the Reform UK leader, Nigel Farage, wearing Nazi uniforms.

After receiving a complaint, ACT police attended the music venue last Wednesday evening and removed the posters to investigate whether they had broken federal hate symbol laws that were passed in January after the Bondi shooting attack.

On Wednesday, ACT police confirmed it had concluded its investigation.

“Following assessment, it has been determined that while the posters satisfied certain aspects of the legislation, other aspects were not met. As such, criminal proceedings will not occur. The posters will be returned to the owner in due course and this matter finalised,” the statement said.

“ACT policing remains committed to ensuring that alleged antisemitic, racist and hate incidents are addressed promptly and thoroughly and when possible criminality is identified, ACT policing will not hesitate to take appropriate action.”

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David Howe, Dissent’s owner, told Guardian Australia his venue was shut down for about two hours last week while police attended the venue, causing the cancellation of an interstate band’s performance.

“I think it’s ludicrous, to be perfectly honest,” he said, describing the works as clearly an “anti-fascist statement”.

By Thursday afternoon, less than 24 hours later, the posters were placed back in the windows – with the images covered with the word “CENSORED” in red – where they remained for six days without further incident.

Howe said he hoped patrons appreciated their return, describing them “absolutely” as protest art.

Pocock said the incident showed the hate imagery laws were rushed and flawed, demanding police apologise to the venue’s owner.

“It’s worrying to see the first use of these flawed and rushed new laws was to target a local Canberra business seeking to take a stand against fascism,” he said.

“While I’m pleased Dissent Cafe has been exonerated, I believe they are owed an apology and we urgently need to re-examine this rushed legislation.

“I moved amendments to set up a Senate inquiry into the laws and require an independent review, but Labor and the Liberals voted against them and I voted against the bill.”

The ACT independent MLA Thomas Emerson said questions remained surrounding the series of events.

“Notwithstanding today’s revelation that no crime was committed, our community needs an assurance that this was a mistake and will not happen again. Without that, this Orwellian incident is guaranteed to have a chilling effect on artistic and political expression in Canberra,” he said.

Under laws passed in January, hate symbol display offences do not apply if it is deemed for a religious, academic, educational, artistic, literary or scientific purpose and not contrary to the public interest.

Imagery and symbols designated as prohibited include the display of the Hakenkreuz (swastika), the double sig rune – the logo chosen for the Schutzstaffel (SS) – and the performance of the Nazi salute.