Foreign Investment Review Board & COVID-19
The Commonwealth Government announced on 29 March 2020 temporary changes to the foreign investment review framework in response to the economic implications arising from the spread of COVID-19, with immediate effect.
Effective from 29 March 2020, all foreign investment proposals subject to the Foreign Acquisitions and Takeovers Act 1975 (“the Act”) will require Foreign investment Review Board (“FIRB”) approval. This has been achieved by reducing the monetary screening thresholds to $0 for all foreign investments under the Act. This is a significant departure from the thresholds in place prior to the announcement, which varied depending on a range of factors and the type of transaction occurring.
The timeframe for assessing applications has been significantly extended from 30 days to 6 months. The increased timeframe applies to both existing and new applications.
The Treasurer has indicated that FIRB will prioritise urgent applications which protect and support Australian businesses and jobs. In such instances, applicants are encouraged to email [email protected] providing details of the commercial consequences of approval not being granted by a certain date.
FIRB has indicated that the new monetary thresholds will not apply to contracts entered into prior to 29 March 2020.
As at the date of this article, draft legislation or policy guidance is yet to be released. The Treasurer’s announcement regarding the changes can be found at https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/changes-foreign-investment-framework
It will be important that any contracts entered into from 29 March 2020 reflect these changes outlined above, and that existing contracts provide for appropriate timeframes to obtain FIRB approval. If you require any assistance or have any questions, please contact us:
Hobart – 6226 1200
Launceston – 6338 2390
Email – [email protected]