Foreign Investment Reform (Protecting Australia's National Security) Act 2020 (114 of 2020)

Schedule 1   Main amendments

Part 1   Amendment of the Foreign Acquisitions and Takeovers Act 1975

Foreign Acquisitions and Takeovers Act 1975

40   Subsections 19(1) and (2)

Repeal the subsections, substitute:

Tracing - general

(1) Subsection (2) applies (subject to subsection (3)) if:

(a) a person holds a substantial interest in:

(i) a corporation (the higher party ); or

(ii) a trust (a trustee of which is a higher party ); or

(iii) an unincorporated limited partnership (a general partner of which is a higher party );

including because of one or more applications of this section; and

(b) the higher party:

(i) is in a position to control all or any of the voting power or potential voting power in a corporation or unincorporated limited partnership (the lower party ); or

(ii) holds interests in all or any of the shares in a corporation (the lower party ); or

(iii) holds an interest in a trust or unincorporated limited partnership (the lower party ), other than the partnership mentioned in subparagraph (a)(iii) (if that subparagraph applies).

(2) For the purposes of this Act:

(a) if subparagraph (1)(b)(i) applies - the person is taken to be in a position to control the voting power or potential voting power in the lower party that the higher party is in a position to control; or

(b) if subparagraph (1)(b)(ii) applies - the person is taken to hold the interests in the shares in the lower party that the higher party holds; or

(c) if subparagraph (1)(b)(iii) applies - the person is taken to hold the interest in the lower party that the higher party holds.

Tracing - effect of intermediate unincorporated limited partnerships

(2A) Subsection (2B) applies (subject to subsection (3)) if:

(a) a person holds a substantial interest in an unincorporated limited partnership (the higher partnership ); and

(b) there are one or more unincorporated limited partnerships (each of which is an intermediate partnership in relation to the higher partnership) that are general partners of:

(i) the higher partnership; or

(ii) another intermediate partnership in relation to the higher partnership (because of one or more applications of this paragraph); and

(c) a general partner (the intermediate partner ) of any of those intermediate partnerships:

(i) is in a position to control all or any of the voting power or potential voting power in a corporation or another unincorporated limited partnership (the lower party ), including because of the operation of paragraph (2)(a); or

(ii) holds interests in the shares of a corporation (the lower party ), including because of the operation of paragraph (2)(b); or

(iii) holds an interest in a trust or another unincorporated limited partnership (the lower party ), including because of the operation of paragraph (2)(c).

(2B) For the purposes of this Act:

(a) if subparagraph (2A)(c)(i) applies - the person is taken to be in a position to control the voting power or potential voting power in the lower party that the intermediate partner is in a position to control; or

(b) if subparagraph (2A)(c)(ii) applies - the person is taken to hold the interests in the shares in the lower party that the intermediate partner holds; or

(c) if subparagraph (2A)(c)(iii) applies - the person is taken to hold the interest in the lower party that the intermediate partner holds.

Section does not apply for certain purposes