Major Reforms to Australia’s Foreign Investment Framework

Major Reforms to Australia’s Foreign Investment Framework

Today the Morrison Government announced the biggest reform in 50 years to the way Australia handles foreign investment. 

These reforms will preserve the underlying principles of our system: that Australia welcomes foreign investment for the significant benefits it provides but also ensures that investments are not contrary to the national interest. 

Key elements of the reform package include:

  • A new national security test for foreign investors who will be required to seek approval to start or acquire a direct interest in a ‘sensitive national security business’ – regardless of the value of the investment.
  • A time-bound ‘call in’ power enabling the Treasurer to review acquisitions that raise national security risks outside of proposed acquisitions relating to a ‘sensitive national security business’.
  • A national security last resort power that provides the ability to impose or vary conditions and in extraordinary circumstances order disposal on national security grounds.
  • Stronger and more flexible enforcement options including the expansion of infringement notices and higher civil and criminal penalties.
  • Measures to streamline approval for passive investors and investments into non-sensitive businesses.

The Government will release exposure draft legislation for consultation in July, with the reforms scheduled to commence on 1 January 2021.

For more information visit https://joshfrydenberg.com.au/latest-news/major-reforms-to-australias-foreign-investment-framework/