Property Law: 21 April 2020
Last month, the Federal Government enacted important temporary changes to the foreign investment review framework, regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA). These measures are intended to remain in place throughout the coronavirus crisis.
As of 10:30PM AEST, Sunday 29 March 2020, all proposed foreign investments into Australia subject to the application of the FATA will require approval, regardless of value or the nature of the foreign investor.
This temporary change will be achieved by reducing the monetary screening thresholds to $0 for ALL foreign investments (both private foreign investors and government foreign investors) under the FATA irrespective of the investor's country of origin.
As a result of the threshold changes, the Foreign Investment Review Board (FIRB) have announced that decision periods for foreign investment applications involving significant actions and/or exemption certificates may be extended from 30 days by up to six months from the date an application fee is paid.
These changes will require all contracts entered into by foreign purchasers after 10:30PM AEST 29 March 2020 should include an appropriate FIRB approval condition.
Foreign persons who fail to meet their obligations under the FATA may be subject to a disposal order, civil penalty orders, and/or criminal prosecutions.
If you have recently been, or are intending to be, a party to a contract involving foreign investment in Australia these changes may affect you.