Disclaimer: This publication contains comments of a general nature only, and is provided as an information service.
It is not intended to be relied upon as, nor is it a substitute for specific professional advice.
On 5 June 2020, the Federal Government announced sweeping reforms to the Foreign Acquisitions and Takeovers Act 1975 (FATA) in order to strengthen Australia’s Foreign Investment Laws. The reforms, which underwent a 5-month public consultation process, are documented in the Foreign Investment Reform (Protecting Australia’s National Security) Bill 2020 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020, both of which have been passed by parliament as of 9 December 2020.
Below is a summary of the major elements of the new Foreign Investment Framework which will take effect from 1 January 2021.
- A new national security test will be introduced which will apply to all foreign investors who seek to acquire a direct interest in a ‘national security’
- A new category of actions called ‘notifiable national security actions’ to describe actions that must be notified to the Treasurer for review regardless of the value of the investment.
- A new time-restricted ‘call-in’ power for the Treasurer to review various other investment actions that would not otherwise need to be notified for review under the FATA;
- A new ‘last resort’ power for the Treasurer to undertake a final review on National Security Grounds of Foreign Investment that has already received a no objection notification or has the benefit of an exemption certificate;
- Improvements to the integrity of the review framework and information sharing under the FATA.
- Stronger enforcement options including monitoring and investigation powers, the expansion of infringement notices and harsher civil and criminal penalties;
- A new fee framework for Foreign Investment in Australia; and
- A register of Foreign Owned Australian Assets.