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

Schedule 2   Compliance and enforcement

Part 1   Amendments

Foreign Acquisitions and Takeovers Act 1975

16   At the end of Division 3 of Part 5

Add:

Subdivision D - Other civil penalties

98A Contravening directions and interim directions

(1) A person contravenes this subsection if:

(a) the person:

(i) has been directed by the Treasurer under subsection 79R(3) in relation to a relevant contravention as mentioned in subsection 79R(1); or

(ii) has been directed by the Treasurer under subsection 79V(3) in relation to a relevant contravention as mentioned in subsection 79V(1); and

(b) the provision to which the relevant contravention relates is a civil penalty provision; and

(c) the person engages in conduct; and

(d) the person does so in contravention of the direction.

(2) A person who contravenes subsection (1) is liable to a civil penalty.

(3) The maximum penalty for the contravention is:

(a) unless paragraph (b) applies - 5,000 penalty units; or

(b) if the person is a corporation - 50,000 penalty units.

98B False or misleading information and documents

Information or documents relevant to no objection notification

(1) A person contravenes this subsection if:

(a) the person is given a no objection notification, or is specified in a no objection notification; and

(b) before the no objection notification was given, the person gave the Treasurer information that was or documents that were:

(i) relevant to the no objection notification; and

(ii) relevant to one or more core Part 3 actions to which the no objection notification relates; and

(c) the information was or the documents were false or misleading in a material particular.

(2) A person who contravenes subsection (1) is liable to a civil penalty.

(3) The maximum penalty for the contravention is the lesser of the following:

(a) 2,500,000 penalty units;

(b) the greater of the following:

(i) 5,000 penalty units (or 50,000 penalty units if the person is a corporation);

(ii) the sum of the amounts worked out under section 98F for each of the core Part 3 actions mentioned in subparagraph (1)(b)(ii).

Information or documents relevant to exemption certificate

(4) A person contravenes this subsection if:

(a) an exemption certificate relates to a person; and

(b) before the exemption certificate was given, the person gave the Treasurer information that was or documents that were:

(i) relevant to the exemption certificate; and

(ii) relevant to one or more core Part 3 actions to which the exemption certificate relates; and

(c) the information was or the documents were false or misleading in a material particular.

(5) A person who contravenes subsection (4) is liable to a civil penalty.

(6) The maximum penalty for the contravention is:

(a) unless paragraph (b) applies - 5,000 penalty units; or

(b) if the person is a corporation - 50,000 penalty units.

Information or documents may be false or misleading by omission

(7) To avoid doubt, for the purposes of this section, information or documents may be false or misleading in a material particular because of the omission of a matter or thing.

98C Failure to notify Treasurer of taking of action specified in no objection notification

(1) Subsection (2) applies if:

(a) a person:

(i) is given a no objection notification specifying one or more core Part 3 actions; or

(ii) is specified in a no objection notification specifying one or more core Part 3 actions; and

(b) the person takes one of those core Part 3 actions; and

(c) if regulations made for the purposes of this paragraph specify requirements - those requirements are met.

(2) The person must give the Treasurer a notice in accordance with subsection (3) no later than 30 days after the latest of the following days:

(a) the day on which the person took the core Part 3 action;

(b) the day on which the no objection notice was given;

(c) if the core Part 3 action is the acquisition of an interest in a security, asset, trust or Australian land, and section 15 applies in relation to the acquisition - the day on which the person acquired the interest in a security, asset, trust or Australian land (disregarding section 15).

Civil penalty: 250 penalty units.

(3) The notice must:

(a) describe the core Part 3 action; and

(b) state the day on which it was taken; and

(c) meet any other requirements specified in regulations made for the purposes of this paragraph.

98D Failure to notify taking of action related to exemption certificate

(1) Subsection (2) applies if:

(a) an exemption certificate relates to one or more core Part 3 actions; and

(b) the person to whom the exemption certificate relates takes one of those core Part 3 actions; and

(c) if regulations made for the purposes of this paragraph specified requirements - those requirements are met.

(2) The person must give the Treasurer a notice in accordance with subsection (3) no later than 30 days after the latest of the following days:

(a) the day on which the person took the core Part 3 action;

(b) if the core Part 3 action is the acquisition of an interest in a security, asset, trust or Australian land, and section 15 applies in relation to the acquisition - the day on which the person acquired the interest in a security, asset, trust or Australian land (disregarding section 15).

Civil penalty: 250 penalty units.

(3) The notice must:

(a) describe the core Part 3 action; and

(b) state the day on which it was taken; and

(c) meet any other requirements specified in regulations made for the purposes of this paragraph.

98E Failure to notify Treasurer of situations following core Part 3 action

(1) Subsection (2) applies if:

(a) any of the following conditions are satisfied:

(i) a person is given a no objection notification specifying one or more core Part 3 actions;

(ii) a person is specified in a no objection notification specifying one or more core Part 3 actions;

(iii) an exemption certificate relating to a person relates to one or more core Part 3 actions; and

(b) the person takes one of those core Part 3 actions; and

(c) a situation mentioned in subsection (2) arises after the person takes that core Part 3 action; and

(d) if that situation is the situation mentioned in paragraph (2)(a) - the person becomes aware, or ought reasonably to have become aware, of the situation; and

(e) if regulations made for the purposes of this paragraph specify requirements - those requirements are met.

(2) The situations are as follows:

(a) if none of the following paragraphs apply - there is a change in control of the entity or business to which the core Part 3 action relates;

(b) if the core Part 3 action is an acquisition of a direct interest in an Australian entity - the person ceases to have a direct interest in the Australian entity;

(c) if the core Part 3 action is an acquisition of an interest of any percentage in an entity or a business - the person starts to hold an interest of a percentage in the entity or business that is equal to or less than the interest of the percentage that the person held in the entity or business immediately before the acquisition;

(d) if the core Part 3 action is an acquisition of an interest in Australian land - the person ceases to hold all or part of that interest;

(e) if the core Part 3 action is an action specified in regulations made for the purposes of section 44 and the regulations specify one or more situations for the significant action for the purposes of this paragraph - any of those situations cease to exist;

(f) if the core Part 3 action is an action specified in regulations made for the purposes of section 44 and paragraph (e) of this subsection does not apply:

(i) if the core Part 3 action relates to acquiring an interest of at least a certain percentage in an entity or business - the person ceases to have an interest of at least that percentage in the entity or business; or

(ii) if the core Part 3 action relates to acquiring a direct interest in an entity or business - the person ceases to have a direct interest in the entity or business; or

(iii) if the core Part 3 action relates to starting a business - the person ceases to carry on the business; or

(iv) if the core Part 3 action relates to acquiring an interest in a tenement - the person ceases to hold all or part of that interest; or

(v) if the core Part 3 action relates to acquiring an interest of at least a certain percentage of the securities of an entity - the person ceases to have an interest of at least that percentage of the securities of the entity.

(3) The person must give the Treasurer a notice in accordance with subsection (4) no later than 30 days after the later of the following days:

(a) the day on which the situation mentioned in subsection (2) arose;

(b) the day on which the no objection notice or exemption certificate was given.

Civil penalty: 250 penalty units.

(4) The notice must:

(a) describe the core Part 3 action; and

(b) state the day on which it was taken; and

(c) describe the situation mentioned in subsection (2) that arose; and

(d) state the day on which it arose; and

(e) meet any other requirements specified in regulations made for the purposes of this paragraph.

Subdivision E - Miscellaneous

98F Civil penalty amounts for penalty provision based on value

(1) For the purpose of working out the maximum penalty for a contravention of a civil penalty provision, the amount under this section for an action is 75% of the amount determined under subsection (3) for the action.

(2) For the purposes of subsection (1), if the relevant civil penalty provision is subsection 98B(1), treat the amount determined under subsection (3) of this section for the action as being the sum of the amounts, determined under subsection (3) of this section, for each of the core Part 3 actions mentioned in subparagraph 98B(1)(b)(ii).

(3) For the purposes of subsection (1), the amount for the action is:

(a) the value for the action worked out under the following table; or

(b) if no item of the table applies to the action:

(i) where the action is an acquisition - the value of the consideration for the acquisition; or

(ii) otherwise - the market value of the benefit obtained by the action.

(4) In applying the table in subsection (3), disregard the effect of any exemption certificate.

(5) If the action is covered by more than one item of the table in subsection (3), treat the value of the action worked out according to that table as being the greatest of the amounts worked out under those items.

(6) For the purposes of this section:

(a) if there is no consideration for a thing - treat the value of the consideration for the thing as nil; and

(b) if the market value of a thing cannot be ascertained - treat the market value of the thing as nil.