Changes to the Australian Foreign Investment Review Framework
An overview of the changes to the Australian Foreign Direct Investment Review framework
Foreign direct investments have always been subject to review in Australia. This mechanism has been tightened since the change in the governing party in 2013. The article describes the developments of the past seven years.
Article in German language in RIW 2020, 12, page 717 – 726
Every investment by a foreign investor in Australia can potentially trigger the foreign investment review process at the end of which the Australian treasurer has to grant approval for the investment to go forward. Only certain investments have to be notified without recourse to a certain threshold, e.g. investments of a certain size in media assets or the purchase of residential real estate. Investments by foreign governments or related associations also have to be notified irrespective of their value. Other investments like the purchase of a company or an agribusiness as well as the purchase of agricultural land only have to be notified if a certain threshold was exceeded.
In the last years, a notification obligation for the purchase of critical infrastructure assets sold by an Australian state or the federal government was introduced and the threshold for the purchase of agricultural land was drastically reduced, besides other changes. Due to the COVID 19 pandemic all thresholds were reduced to zero in March 2020 and all investments into Australia are currently notifiable.
Besides the increase of notifiable investments, registration obligations were introduced as well which foreign investors have to observe when investing in Australia. There exist the Register of Foreign Ownership of Water or Agricultural Land in which rights in water and agricultural land have to be registered since mid-2015 irrespective of value. In 2018 a Register of Critical Infrastructure Assets as well as a Register of Foreign Owners of Media Assets was introduced.
The article outlines the criteria along which the Australian government is examining foreign direct investments as well as relevant cases and points to areas where changes took place in recent years.
Article in German language in RIW 2020, 12, page 717 – 726 (Paywall)