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Australia tightens foreign investment rules amid Covid-19 chaos

Australia tightens foreign investment rules amid Covid-19 chaos

Photo by Bloomberg

30th March 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The federal government on Monday announced temporary changes to the foreign investment review framework that are designed to protect Australia’s national interest as the country deals with the economic implications arising from the spread of the coronavirus. 

The changes come as reports emerged that China could attempt to make a play for distressed Australian businesses and assets.

Treasurer Josh Frydenberg noted that all proposed foreign investments into Australia subject to the Foreign Acquisitions and Takeovers Act would now require approval, regardless of value or the nature of the foreign investor. 

“This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest.

“The temporary change will be achieved by reducing to $0 the monetary screening thresholds for all foreign investments under the Act. By temporarily reducing the foreign investment thresholds, the Australian government will ensure appropriate oversight over all proposed foreign investment during this time,” the Treasurer said.

Investors from nations with which Australia has a free-trade agreement previously did not require Foreign Investment Review Board (FIRB) approval for any acquisition below A$1.2-billion. These nations include China, the US, New Zealand, Japan, South Korea, Canada, Singapore, Mexico and Chile.

To ensure sufficient time for screening applications, the FIRB will be working with existing and new applicants to extend timeframes for reviewing applications from 30 days to up to six months. 

In doing so, the government will prioritise urgent applications for investments that protect and support Australian business and Australian jobs, Frydenberg said.

“Even in these uncertain times, Australia continues to welcome foreign investment, which remains vital to our long-term economic success and stability.

“The government recognises that foreign investment will play an important part in helping many businesses get to the other side – securing jobs and supporting our economic recovery.

However, these measures are necessary to safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses. 

“These are temporary measures that will remain in place for the duration of the current crisis.”

The Treasurer will continue to review foreign investment proposals against the national interest on a case-by-case basis, and where appropriate, conditions will be applied proportionately to address identified risks on a non-discriminatory basis.

Edited by Creamer Media Reporter

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