COVID-19 Changes to the For­eign Acqui­si­tions and Takeovers Act 1975 

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. Kind regards Mary Digiglio