There are 12 days to go until the Australian Treasury closes public consultation of the Foreign Investment Reform (Protecting Australia’s National Security) Regulations 2020 (Exposure Draft Regulations) and the Foreign Acquisitions and Takeovers Fees Imposition Regulations 2020 (Exposure Draft Fees Regulations).
The draft reforms under consultation have been made to give further effect to the major reforms of the Foreign Acquisitions and Takeovers Act 1975 that were announced on 5 June 2020.
The new reforms will place greater restrictions on business’ access to foreign investment with the intention of protecting Australia’s national security.
An explanatory statement released by the treasury says: “The reforms strengthen the foreign investment framework and ensure the framework keeps pace with emerging risks and global developments.”
As the most significant permanent reforms made to the acts since their inception, they have been met with apprehension from business owners, startup founders and those in the investment space.
Speaking with Dynamic Business in August, Yasser El-Ansary, Chief Executive of the Australian Investment Council said: “The temporary changes the government has announced have certainly had an impact on Australia’s ability to attract inbound investment from offshore. It is important for our industry and the broader Australian economy that we do everything we can to support inbound investment for Australian startup businesses.”
The new draft reforms are currently open for public consultation. The drafts outline further information regarding the reforms to the Foreign Acquisitions and Takeovers Act 1975 such as the process of applying for exemptions.
Further to this, the drafts explain the outcome of the current temporary monetary screening threshold that were dropped to $0 due to the national security risks that arose due to COVID-19. Under these temporary measures and all foreign investment involving a minimum 20% interest is subject to the approval of the Treasurer.
However, the draft amendments assert that these measures will be dropped as of January 2021, and the original monetary thresholds reinstated.
The explanatory statement of the reform says: “A final decision as to whether the monetary thresholds will be reinstated at this time will depend on the impact of the Coronavirus on the economy and whether there is an ongoing risk that foreign investment in Australia could occur in ways that would be contrary to the national interest.”
The public are able to email the treasury at FIRBStakeholders@treasury.gov.au before October 2.
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