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

72   After section 55

Insert:

Division 4A - Meaning of notifiable national security action

Subdivision A - Simplified outline

55A Simplified outline

This Division defines the concept of a notifiable national security action .

Subdivision B - Meaning of notifiable national security action

55B Meaning of notifiable national security action

(1) An action is a notifiable national security action if the action is taken, or proposed to be taken, by a foreign person and the action is any of the following:

(a) to start a national security business;

(b) to acquire a direct interest in a national security business;

(c) to acquire a direct interest in an entity that carries on a national security business;

(d) to acquire an interest in Australian land that, at the time of acquisition, is national security land;

(e) to acquire a legal or equitable interest in an exploration tenement in respect of Australian land that, at the time of acquisition, is national security land.

(2) For the purposes of paragraph (1)(e), a person acquires a legal or equitable interest in an exploration tenement even if:

(a) the person has previously acquired an interest in an exploration tenement; or

(b) the interest is an increase in the amount of an existing interest of the person in an exploration tenement.

(3) The regulations may provide, in relation to exemption certificates in force under regulations made for the purposes of section 63, that an action of a specified kind is not a notifiable national security action .

Division 4B - Meaning of reviewable national security action

Subdivision A - Simplified outline

55C Simplified outline

This Division defines the concept of a reviewable national security action . The Treasurer may review an action of this kind under Part 3, as well as a significant action that is not a notifiable action or notifiable national security action, if the Treasurer considers that the action may pose a national security concern.

Subdivision B - Meaning of reviewable national security action

55D Meaning of reviewable national security action - entities

Meanings

(1) An action is a reviewable national security action if:

(a) the action is taken, or proposed to be taken, by a person and the action is to acquire an interest of any percentage in an entity; and

(b) as a result of the action or proposed action:

(i) a foreign person acquires, or will acquire, a direct interest in the entity and that acquisition, or proposed acquisition, is not a significant action, notifiable action or notifiable national security action; or

(ii) a foreign person will be in a position, or more of a position, to influence or participate in the central management and control of the entity; or

(iii) a foreign person will be in a position, or more of a position, to influence, participate in or determine the policy of the entity; and

(c) the action is or was not otherwise a significant action, a notifiable action or a notifiable national security action.

Note: For the definition of entity , see subsection (3).

(2) An action is also a reviewable national security action if:

(a) the action is taken, or proposed to be taken, by a person and the action is:

(i) to issue securities in an entity; or

(ii) to enter an agreement relating to the affairs of an entity and under which one or more senior officers of the entity will be under an obligation to act in accordance with the directions, instructions or wishes of a foreign person who holds a direct interest in the entity; or

(iii) to alter a constituent document of an entity as a result of which one or more senior officers of the entity will be under an obligation to act in accordance with the directions, instructions or wishes of a foreign person who holds a direct interest in the entity; and

(b) in the case to which subparagraph (a)(i) applies - as a result of the action or proposed action:

(i) a foreign person acquires, or will acquire, a direct interest in the entity and that acquisition, or proposed acquisition, is not a significant action, notifiable action or notifiable national security action; or

(ii) a foreign person will be in a position, or more of a position, to influence or participate in the central management and control of the entity; or

(iii) a foreign person will be in a position, or more of a position, to influence, participate in or determine the policy of the entity; and

(c) the action is or was not otherwise a significant action, a notifiable action or a notifiable national security action.

Note: For the definition of entity , see subsection (4).

Definitions of entity

(3) For the purposes of subsection (1), the entity must be:

(a) for an acquisition of interests in shares:

(i) a corporation that carries on an Australian business, whether alone or together with one or more other persons; or

(ii) the holding entity of such a corporation; or

(b) for any other action relating to a corporation:

(i) an Australian corporation that carries on an Australian business, whether alone or together with one or more other persons; or

(ii) the holding entity (other than a foreign corporation) of such a corporation; or

(c) for an action relating to a unit trust:

(i) an Australian unit trust; or

(ii) a holding entity of an Australian unit trust.

(4) For the purposes of subsection (2), the entity must be:

(a) for an acquisition of interests in shares or an issue of shares:

(i) a corporation that is a relevant entity that carries on an Australian business, whether alone or together with one or more other persons; or

(ii) the holding entity of such a corporation; or

(b) for any other action relating to a corporation:

(i) an Australian corporation that carries on an Australian business, whether alone or together with one or more other persons; or

(ii) the holding entity (other than a foreign corporation) of such a corporation; or

(c) for an action relating to a unit trust:

(i) an Australian unit trust; or

(ii) a holding entity of an Australian unit trust.

55E Meaning of reviewable national security action - businesses

(1) An action is a reviewable national security action if:

(a) the action is taken, or proposed to be taken, by a person and the action is any of the following:

(i) to acquire an interest of any percentage in an Australian business;

(ii) to acquire an interest in the assets of an Australian business;

(iii) to enter or terminate a significant agreement with an Australian business; and

(b) as a result of the action or proposed action:

(i) a foreign person acquires, or will acquire, a direct interest in the Australian business and that acquisition, or proposed acquisition, is not a significant action, notifiable action or notifiable national security action; or

(ii) a foreign person will be in a position, or more of a position, to influence or participate in the central management and control of the Australian business; or

(iii) a foreign person will be in a position, or more of a position, to influence, participate in or determine the policy of the Australian business; and

(c) the action is or was not otherwise a significant action, a notifiable action or a notifiable national security action.

(2) An action is also a reviewable national security action if:

(a) the action is taken, or proposed to be taken, by a foreign person and the action is to start an Australian business; and

(b) the action is or was not otherwise a significant action, a notifiable action or a notifiable national security action.

55F Meaning of reviewable national security action - land

An action is a reviewable national security action if:

(a) the action is taken, or proposed to be taken, by a foreign person and the action is to acquire an interest in Australian land; and

(b) the action is or was not otherwise a significant action, a notifiable action or a notifiable national security action.

55G Actions that are not reviewable national security actions - exemption certificates

The regulations may provide, in relation to exemption certificates in force under regulations made for the purposes of section 63, that an action of a specified kind is not a reviewable national security action .