COVID-19: What are the changes to foreign investments in Australia?
Effective from 29 March 2020, the Federal Treasurer announced temporary changes to the foreign investment review framework and how foreign investments in Australia will be affected, in light of the COVID-19 pandemic.
These measures have been supported by the Foreign Investment Review Board (FIRB), who are an advisory body to the Government in relation to foreign investment policy and act as the examining body for proposals by foreign interests to undertake investment in Australia.
What are the key changes?
1.Reduction of monetary screening threshold
All proposed foreign investments into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 will require approval, regardless of the value or nature of the foreign investor.
Some of the key changes can be summarised as follows:
The Foreign Acquisitions and Takeovers Regulations 2015 provides that a business is sensitive if the business is carried on wholly or partly in:
- the media, telecommunications or transport sectors;
- the supply of military goods, equipment or technology for a military purpose; or
- the extraction of uranium or plutonium or operation of a nuclear facility.
However, not all foreign investments are impacted by the changes. It will remain business as usual for all foreign government investment and investment in residential land, which have always been subject to a $0 threshold
2. Extended deadline for case processing
Given the expected increase in the number of proposed foreign investments requiring approval, the FIRB is extending timeframes for reviewing new applications from 30 days to up to six months. This extension will apply to new and existing applications alike.
3. Applications supporting Australian businesses and jobs prioritised
Notwithstanding the extension of timeframes for reviewing new applications, the Government has stated its intention to prioritise urgent applications for investments that protect and support Australian businesses and jobs.
Will I be affected by these changes?
The changes will directly affect all foreign persons, entities and government investors, regardless of their country of origin.
Failure to adhere to the temporary changes can have significant consequences, including, but not limited to, civil and criminal penalties, so it is essential that all foreign investors pay attention to the current changes.
How can DSA Law help?
If you are a party to a proposed transaction that will require FIRB approval, or are simply seeking advice regarding the temporary changes to the foreign investment review framework and how your individual circumstances and how your interests may be effected please Contact Us or one of our Lawyers at DSA Law on (03) 8595 9580.
1.Agreement country or region investors are those from: the United States of America, New Zealand, Chile, Japan, the Republic of Korea, China, Singapore, a country (other than Australia) for which the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership, done at Santiago on 8 March 2018, is in force (CPTPP) (as at 1 January 2020, the CPTPP is in force for: Canada, Japan, Mexico, New Zealand, Singapore and Vietnam), and the region of Hong Kong, China; Examples of Agribusiness
2.For Chile, New Zealand and United States of America only.
3.Foreign Acquisitions and Takeovers Regulations (Cth) 2015, r 22
4.For Chile, New Zealand and United States of America only.
5.For Chile, New Zealand and United States of America only.