After a comprehensive reform of the foreign investment system aimed at protecting national security, foreign investors will face stricter scrutiny when bidding on sensitive assets, and finance ministers will gain new powers, including the right to withdraw previously approved purchase rights . In addition, foreign investors who obtain conditional permits to acquire assets will face a strengthened compliance system supervised by the Australian Department of Finance, and will face severe penalties if they fail to comply with the conditions.
It intends to legislate these changes in July and take effect on January 1, next year, when a series of emergency changes to the foreign investment system to protect Australian companies vulnerable to economic recession will expire. The source said that the content of the proposed change is far more than worries about China. The Foreign Investment Review Board (FIRB) will apply new national security tests to the fixed asset class defined as “sensitive national security companies.” These will include assets in the energy, telecommunications, port, water and data sectors.
Australian Finance Minister Josh FRydenberg claimed that this was the most significant change since the introduction of the foreign investment system in 1975. “Australia has an enviable track record in welcoming foreign investment from all over the world. These reforms will not change this,” he said. “Our principles will remain the same, and we will continue to adopt an equal treatment approach. The situation evaluates the proposed investment.” The Federation therefore established a new critical infrastructure center to advise FIRB on national security issues. Under the new reform, the center will also be retained.
https://www.afr.com/politics/federal/tighter-tests-for-foreign-investors-20200604-p54zj9