On 29 March 2020, the Hon. Josh Frydenberg MP, Treasurer, announced changes to the way foreign investment is reviewed in Australia.
The two key changes are:
(1) All monetary screening thresholds in the Foreign Acquisitions and Takeovers Act 1975 (Act) have been reduced to $0 meaning all proposed foreign investment into Australia (unless exempt under the Act) is subject to review by the Foreign Investment Review Board (FIRB); and
(2) In order to ensure sufficient time for screening applications, the timeframe for reviewing both new and existing applications to the FIRB has increased from 30 days to six months.
A couple of important points:
The changes came into effect on 29 March 2020.
The Treasurer has expressed that the changes are to be temporary and in place for the duration of the current COVID-19 crisis. It is uncertain whether, at the end of the current crisis, the monetary screening thresholds will revert to their pre-29 March 2020 amounts, or to other amounts. It is also uncertain as to how the FIRB will implement a transition back to a 30 day timeframe for review for applications.
The guidance notes published by the FIRB have (as at the date of this update) not been amended to reflect the changes. The FIRB note that all material on its website, including guidance notes, should be read in light of the Treasurer's announcement.
The Treasurer has indicated that, on a case by case basis, the government will prioritise urgent applications for investments that protect and support Australian business and Australian jobs.
We will provide further updates as they come to light.
For further information please contact:
Richard Ottley, Partner
Phone: + 61 2 9233 5544
Email: rbo@swaab.com.au
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