In our article on 11 June 2020, we summarised the proposed transformative changes to Australia’s foreign investment rules as announced by the Australian Treasurer.

On 31 July 2020, the Australian Government released the draft legislation for that reform package and announced the commencement of a 4-week public consultation period on the proposed reforms.

To coincide with this, Treasury is ramping up stakeholder-engagement by hosting online information sessions for investors and other interested parties. During one of these sessions that we attended, it was made abundantly clear that:

  • The Australian Government continues to welcome foreign investment.
  • The new ‘national security’ powers proposed under these reforms are limited in scope and designed to target those transactions which raise specific national security concerns for Australia.
  • Those new powers will be applied in a non-discriminatory manner and FIRB applications will continue to be processed and considered on a case-by-case basis.

The public consultation period ends at 5:00pm (AEST) on 31 August 2020 and further details are available on the Treasury's consultation website.

The wording of the draft legislation may still change prior to its introduction in Parliament during the spring sitting and while it is before Parliament, it is highly likely that Labor will support the legislation in its entirety, or suggest minor inconsequential amendments that they consider will improve the Legislation.

The Australian Government is seeking to implement these reforms on 1 January 2021 and they will not be applied retrospectively.

To assess whether your proposed transaction may be caught by these new reforms, it is important to check now whether that transaction requires FIRB approval and the likely timing of transaction implementation in light of FIRB’s current processing times. For more information please contact a member of Thomson Geer's M&A team.

Authors

Helen Jin | Special Counsel | Thomson Geer | +61 2 8248 5883 | [email protected]

Brendan Tegg | Principal | TG Endeavour | +61 475 823 784 | [email protected]