BILLS DIGEST NO. 52, 2015–16              23 November 2015

Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 [and] Foreign Acquisitions and Takeovers Fees Imposition Bill 2015

Paula Pyburne
Law and Bills Digest Section 

Date introduced: 20 August 2015

House:  House of Representatives

Portfolio: Treasury

Commencement: various days detailed in the body of this Bills Digest.

Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the Bills’ home pages for the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 can be found on the Bills’ home pages or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

The Bills Digest at a glance

The Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 repeals and replaces all but sections 1 and 2 of the existing Foreign Acquisitions and Takeovers Act 1975. That being the case, the Amendment Bill represents a complete rewrite of the Foreign Acquisitions and Takeovers Act. Much of the Amendment Bill is a plain English version of the existing law.

The key changes in the Amendment Bill operate to:

•       incorporate the existing rules relating to foreign government investors and acquisitions of interests in land which are currently set out in Australia’s Foreign Investment Policy into the Foreign Acquisitions and Takeovers Act to give them legislative force

•       increase the substantial interest threshold which triggers the requirement to give notice of the acquisition to the Treasurer from 15 per cent to 20 per cent. This will align with the threshold set out in Australia’s corporate takeover rules in section 606 of the Corporations Act 2001

•       simplify the structure of the Foreign Acquisitions and Takeovers Act so that relevant transactions are broadly grouped into two categories: significant actions which are subject to voluntary notifications, and notifiable actions which are subject to mandatory notifications

•       extend the current rules which require prior approval for acquisitions of interests in Australian urban land to all land in Australia, including agricultural land, unless an exemption applies

•       introduce civil penalties and stronger criminal penalties for serious offences, as well as providing for the issue of infringement notices for less serious offences and

•       introduce fees for applications under the Foreign Acquisitions and Takeovers Act.

The Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 complements the Amendment Bill by setting the amounts of fees which are payable in respect of various categories of application.

Purpose of the Bills

The purpose of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 (the Amendment Bill) is to repeal and replace all but two provisions of the Foreign Acquisitions and Takeovers Act 1975[1] (FATA). The purpose of the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 (the Fees Imposition Bill) is to impose fees on all foreign investment applications.

The Bills are part of a package of Bills which is intended to strengthen Australia’s foreign investment framework and which also includes the Register of Foreign Ownership of Agricultural Land Bill 2015[2] (Register Bill).

History of the Bills

At the time of writing this Bills Digest, all of the Bills in the package had been passed by the House of Representatives.[3]

In addition, both the Fees Imposition Bill and the Register of Foreign Ownership of Agricultural Land Bill 2015 had been passed by the Senate with no amendments.[4]

However, the Amendment Bill has been the subject of some debate in the Senate and amendments have been proposed by representatives of the non-government and minor parties.[5]

Structure of the Bills

The Amendment Bill consists of four Schedules:

•       Schedule 1 contains the rewritten FATA comprising the following parts:

–      Part 1: sets out preliminary matters including all of the relevant definitions

–      Part 2: identifies the conduct which constitutes significant action and notifiable action

–      Part 3: contains the powers of the Treasurer in the event that significant action has been taken

–      Part 4: requires a foreign person who proposes to take a notifiable action to give notice to the Treasurer before doing so

–      Part 5: sets out the offences and civil penalties that arise if a provision of the FATA is contravened. In many cases this is done by applying the Regulatory Powers (Standard Provisions) Act 2014[6] (Regulatory Powers Act) which is discussed below

–      Part 6: contains provisions about the fees that are payable under the FATA

–      Part 7: relates to record-keeping and confidentiality of information

–      Part 8: contains relevant miscellaneous provisions

•       Schedule 2 contains amendments to the FATA which are contingent on the commencement of the Acts and Instruments (Framework Reform) Act 2015[7]

•       Schedule 3 sets out various application and transitional provisions and

•       Schedule 4 amends confidentiality provisions in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006,[8] the Income Tax Assessment Act 1997[9] and the Taxation Administration Act 1953.[10]

The Fees Imposition Bill comprises three Parts:

•       Part 1 sets out preliminary matters

•       Part 2 imposes the fees which are payable under Part 6 of the Amendment Bill and

•       Part 3 contains a regulation making power.

Background

Current foreign investment framework

Australia’s foreign investment review framework consists of the FATA, its associated Regulations,[11] and Australia’s Foreign Investment Policy (the Policy).[12] The Policy is based on the premise that ‘the Government welcomes foreign investment. It has helped build Australia’s economy and will continue to enhance the wellbeing of Australians by supporting economic growth and prosperity’.[13]

The FATA provides the legislative framework to review foreign investment proposals and provides the Treasurer with a range of powers, including the ability to order divestments of assets, to block proposals, or to apply conditions to proposals to ensure that they are not contrary to Australia’s national interest.

How the Policy operates

Assessing the national interest

The Policy sets out the matters which are broadly considered in assessing the national interest for business acquisitions including national security, competition and other Government policies such as taxation; the impact on the economy and the community; and the investor’s character. Where a proposal involves a foreign government investor, the Government also considers the commerciality of the investment.[14]

Policy for agricultural investments

For agricultural investments there are additional factors that are typically considered when assessing foreign investment proposals against the national interest such as:

•       the quality and availability of Australia’s agricultural resources, including water

•       land access and use

•       agricultural production and productivity

•       Australia’s capacity to remain a reliable supplier of agricultural production, both to the Australian community and our trading partners

•       biodiversity and

•       employment and prosperity in Australia’s local and regional communities.[15]

Policy for residential real estate

The foreign investment policy in relation to residential real estate aims to ensure that any foreign investment increases Australia’s housing stock. The policy operates as follows:

•       applications by foreign persons to procure new dwellings are approved without conditions—as this type of investment increases Australia’s housing stock

•       temporary residents can apply to purchase an established dwelling to use as a residence while they live in Australia. The purchase of an established dwelling is conditional on the foreign person selling the property within three months of leaving Australia.

It is a requirement that each proposed acquisition of real estate be individually notified by the foreign person and reviewed by the Foreign Investment Review Board (FIRB).

Advanced off-the-plan certificate

The requirement for individual purchases to be approved by the FIRB does not apply to property developers (whether the developer is an Australian or a foreign developer). Instead property developers can apply for an advanced off-the-plan certificate (called exemption certificates in the Amendment Bill) to sell all new dwellings in a development of 100 or more dwellings to foreign persons. However, in that case the developer is required to market the development locally as well as overseas. Foreign persons purchasing dwellings in a certified development do not require separate approval.

The FIRB, a non-statutory advisory body, is responsible for examining proposals and advising on the national interest implications of investment proposals. The Treasurer retains responsibility for making decisions.

House of Representatives inquiry

In March 2014, it was reported that Credit Suisse had estimated that:

… Chinese investors are snapping up 18 per cent of all new apartments and houses in Sydney and 14 per cent in Melbourne.

In Brisbane, an estimated 7 per cent of new apartments are bought by Chinese investors. The figures do not include the purchase of existing homes by foreign buyers. The report predicted growing overseas demand was good news for local building suppliers, construction jobs and developers, but likely to drive property prices even higher.[16]

The perception that there was a high level of foreign investment in the Australian residential real estate market gave rise to fears that first home buyers may be locked out.[17] Subsequently, the Treasurer, Joe Hockey, referred concerns about foreign investment in residential real estate to the House of Representatives Standing Committee on Economics (House Economics Committee) for inquiry.[18]

The House Economics Committee, which was chaired by Kelly O’Dwyer received 92 submissions[19] and made 12 recommendations.[20] The report by the House Economics Committee, although directed only at foreign investment in real estate, is comprehensive. Many of its recommendations have been adopted in the Bill.[21]

The House Economics Committee received evidence as to the amount of investment which the FIRB had approved, which is set out in the table below.

Table 1: FIRB approved investment in real estate, $ million (includes residential and commercial properties)

Country

2012-13

2011-12

2010-11

2009-10

2008-09

2007-08

USA

4406 (3)

8162 (1)

3404 (3)

3369 (1)

-

11998 (1)

UK

1671 (5)

3783 (4)

4610 (1)

2264 (3)

-

4430 (3)

China

5932 (4)

4187 (3)

4093 (2)

2421 (2)

-

1491 (5)

Singapore

2008 (1)

5705 (2)

1487

2113 (4)

-

1779 (4)

UAE

885

-

1088

11

-

4712 (2)

Germany

769

1020

1128

1247 (5)

-

1289

Malaysia

1600

1791

1863 (4)

612

-

268

Canada

4926 (2)

2457 (5)

807

375

-

590

Netherlands

229

-

1691 (5)

936

-

1452

South Africa

953

1736

826

497

-

433

South Korea

903

443

497

1165

-

1153

Japan

895

1743

598

368

-

275

Hong Kong

649

777

404

404

-

463

Switzerland

346

523

455

497

-

407

Sweden

-

-

-

397

-

1011

New Zealand

644

864

64

45

-

274

France

100

426

45

34

-

51

India

-

148

163

53

-

144

Russia

-

47

245

-

-

88

Thailand

-

34

13

-

-

-

Others

10541

13494

12280

2762

8500

10454

Source: Standing Committee on Economics, Report on foreign Investment in residential real estate, House of Representatives, Canberra, November 2014, p. 45, accessed 26 October 2015.

However, the House Economics Committee identified that there was a lack of timely and accurate data on foreign investments in residential real estate so that the information in the table may not be a correct reflection of the true position—that is, some approvals may not have led to an actual purchase and some purchases may not have been through the approval process. It considered that the consequences of this lack of accurate data include:

•       an inability to determine the real number and value of these investments

•       difficulty in assessing economic and social benefits such as the contribution to housing supply

•       difficulty in ascertaining levels of non-compliance with the regulatory framework

•       potential eroding of public confidence in the value of foreign investment in the housing market and

•       inadequacy of the evidence base upon which policy makers can make informed choices.[22]

Policy announcement

In February 2015, the Government announced its intention that the Australian Taxation Office (ATO) would take responsibility for both approving foreign investment in residential real estate and administering a new register of foreign investment in agricultural land.[23] In a further media release on 2 May 2015, the Government formally announced its proposed reforms to strengthen Australia’s foreign investment framework, including that:

•       the ATO will immediately commence compliance activities to ensure foreign investors who have invested in Australian residential property are meeting their obligations under the FATA

•       from 1 July 2015, the ATO will be responsible for a register related to foreign ownership of agricultural land

•       from 1 December 2015, the ATO will be responsible for the collection of fees in relation to all foreign investment applications

•       from 1 December 2015, the ATO will be responsible for administering all aspects of the FATA in relation to residential real estate (including the screening of applications) and

•       from 1 July 2016, the ATO will also be responsible for a register related to foreign ownership of residential real estate.[24]

The package of Bills implements the measures in that announcement.

Consultation

Consistent with the announcement, on 18 May 2015 the Government published an options paper to canvas views on ways to modernise the foreign investment framework such as:

•       incorporating policy only notification and prior approval requirements under Australia's foreign investment policy into the legislative framework

•       updating the legislation to reflect current administrative practices and regulatory concepts, as well as for modern business and corporate finance practices

•       exempting proposals that are unlikely to affect the national interest and increase the consistency of exemptions across the different acquisition types and

•       amending the legislation so that it applies irrespective of the transaction structuring (for example, moving from shares to securities, inclusive of units in trusts, and providing similar outcomes whether a direct or indirect acquisition).[25]

Twenty-two submissions were received in response to the options paper, seven of which were published.[26]

In July 2015, Treasury issued an exposure draft of the proposed legislation.[27] The Amendment Bill is in broadly equivalent terms to exposure draft.

Committee consideration

Senate Economics Committee

On 20 August 2015, the package of Bills was referred to the Senate Economics Legislation Committee (Senate Economics Committee) for inquiry and report.[28] The Senate Economics Committee, which was chaired by Liberal Party Senator, Sean Edwards, received only 12 submissions, some of which were copies of earlier submissions to the Treasury consultation.

The report of the Senate Economics Committee was published in October 2015.[29] The majority of the Economics Committee recommended that the Bills be passed.[30] However the Labor Senators dissented from that view, recommending instead that the Government separate the three Bills. In that event:

•       the Register Bill should be passed without amendment

•       the Fees Imposition Bill should be amended to establish a more consistent, simpler and streamlined approach to fees and

•       the Government should further consult with industry, and commission a broader evaluation of the proposed changes, before seeking further passage of this Bill and the Fees Imposition Bill.[31]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) commented on the absence of merits review or review under the Administrative Decisions (Judicial Review) Act 1977[32](the ADJR Act)—although judicial review remains available under the Judiciary Act 1903.[33]

The Scrutiny of Bills Committee noted the rationale for that absence in the Explanatory Memorandum. That is:

The Bill does not provide for the review of decisions on their merits because the decisions under the Act involve complex questions of government policy that can have broad ranging implications for persons other than those immediately affected by the decision. For example, when making a decision under the Act it may be proper for the Treasurer to take into account a broad range of factors, including national security, competition, Australian Government policies (including tax), impacts on the economy and the community, and character of the foreign investor. It is therefore not appropriate for decisions that have such a high political content to be subject to merits review. The provision of merits review might also result in applicants being less willing to provide sensitive information which is relevant to the decision if they believe there is a risk that such information may be disclosed during such proceedings.[34]

Whilst the Scrutiny of Bills Committee did not necessarily agree that the availability of judicial review under section 39B of the Judiciary Act 1903 was a sufficient reason to exclude decisions from review under the ADJR Act, it decided to leave the question of the appropriateness of merits review and review under the ADJR Act to the Senate as a whole.[35]

The Scrutiny of Bills Committee also commented on a number of other elements of the Bill, which are discussed below under ‘Key issues and provisions’.

Policy position of non-government parties

As stated above, Labor gave qualified support to the package of Bills. In relation to the imposition of fees, Gary Gray stated:

In this year's budget, the government announced $735 million in new application fees for foreign investors. I think this is a terrific idea. It is a good idea to make that charge. It is a good idea to make that charge on the entities that will be using the Foreign Investment Review Board, and it is the right way to go about placing that charge on such investors.[36]

The Australian Greens (the Greens) state that part of their policy on foreign ownership of land includes legislating ‘a stronger national interest test to be applied by the Foreign Investment Review Board for purchases of agricultural land and water resources’.[37]

Position of major interest groups

The position of major interest groups are canvassed in the Key issues and provisions section of this Bills Digest.

Financial implications

According to the Explanatory Memorandum, the package of Bills is expected to result in a $667.2 million increase to consolidated revenue over four years. The introduction of application fees on foreign investment applications from 1 December 2015 is estimated to raise $735.0 million in revenue over the forward estimates period.[38]

The 2015-16 Budget included additional funding for the Treasury ($19.7 million over four years), the Australian Taxation Office ($47.5 million over four years) and the Department of Agriculture ($0.6 million over four years) to support additional screening and compliance activities associated with the reforms.[39]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[40]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (the Human Rights Committee) determined that none of the Bills in the package of Bills required additional comment as they ‘promote human rights or contain justifiable limitations on human rights’.[41]

Key issues and provisions—Schedule 1

The amendments in Schedule 1 to the Amendment Bill commence on 1 December 2015.

Part 1—preliminary matters

Part 1 of the Bill contains relevant definitions and explanations. Importantly, for the purposes of the FATA, the definition of foreign person is expanded to include a foreign government or any other person, or any other person that meets the conditions, prescribed by the regulations.[42]

The main changes to the definition of foreign person under the Amendment Bill are:

•       that foreign person now captures Australian citizens who are not ordinarily resident in Australia[43]

•       that an Australian entity will now be deemed to be a foreign person if a foreign individual, foreign corporation or foreign government holds a substantial interest—that is, a 20 per cent interest in the entity (this is an increase from 15 per cent.)[44] and

•       the inclusion of a new foreign government definition. An entity will be a foreign government if it is a body politic of a foreign country, being an entity established by, and acting on behalf of, the state of a foreign country.[45]

Key issue—foreign person includes a foreign government

Whilst the Financial Institute of Australia (FINSIA) states that it ‘affirms the importance of national security concerns’, it also makes the point that its consultation with its members identified that ‘automatically subjecting investments from state-owned enterprises to FIRB review may potentially be prohibitive of critical foreign investment’.[46] FINSIA notes that:

… in the period 2006–2012, [state-owned enterprises] accounted for 94% of total inbound Chinese [foreign direct investment] in Australia (when measured by value). Additionally, the paper found that foreign [state-owned enterprises] are for the most part commercially driven, profit-seeking firms that compete with other [state-owned enterprises] and private firms, with no substantive evidence to indicate that [state-owned enterprises] engage in non-commercial or strategic behaviour to advance the interests of their respective governments.[47]

However, it should be noted that the Policy already contains rules about foreign government investors and the Amendment Bill merely gives these legislative force.[48]

Regulations providing for exemptions

Existing section 39 of the FATA contains a broad power to make regulations which are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Proposed section 37 contains a power to make regulations that provide that the FATA, or specified provisions of the FATA, do not apply to:

•       acquisitions of the kind or in the circumstances prescribed by the regulations

•       interests of the kind or in the circumstances prescribed by the regulations

•       Australian businesses of the kind or in the circumstances prescribed by the regulations or

•       foreign persons of the kind or in the circumstances prescribed by the regulations.

In the absence of any commentary in the Explanatory Memorandum about the reason for this power the Scrutiny of Bills Committee sought advice from the Minister.[49] The Minister provided the following explanation:

Exemptions from certain requirements in the Act are currently included in both the Act and the Foreign Acquisitions and Takeovers Regulation 1989. In response to feedback from some stakeholders that the legislative scheme as a whole would be easier to navigate if all exemptions were included in a single location, it was decided that all exemptions would be included in the regulations to be made under the Act. The decision to include all the exemptions in the regulations rather than the Bill has helped to minimise the complexity of the Bill. This also assists with ensuring Australia’s compliance with complex commitments made in trade agreements.[50]

The Scrutiny of Bills Committee has drawn the attention of the Senate to the provision as it considers that important exemptions to legislative schemes should be provided for in the primary legislation itself, rather than allowing these exemptions to be determined by the executive in regulations. It stated:

While a desire to reduce the complexity of the primary legislation is commendable, the committee does not consider that this is, of itself, sufficient justification for significantly reducing Parliamentary scrutiny by providing for important matters to be included in regulations.[51]

Part 2—significant action and notifiable action

Part 2 of the Bill introduces two new concepts; significant action and notifiable action.

The Bill sets out separate meanings of significant action in respect of entities[52] (which includes an agribusiness[53]), businesses and land.[54] Significant actions are subject to voluntary notifications, whereas notifiable actions are subject to mandatory notifications. Notification to, or approval by, the Treasurer of significant actions is voluntary unless the action is also a notifiable action.

Test for significant action

The Bill details the conditions to be satisfied in determining whether an action is a significant action. The Bill contains specific elements in similar terms which are relevant to entities,[55] businesses,[56] land[57] and actions which are prescribed by regulations.[58]

Steps in the test

In relation to an entity, first the action has to be of the required kind. Examples of the kinds of action which enliven the new provisions of the FATA are acquiring interests in securities,[59] entering into an agreement that results in a change of control of an entity[60] or acquiring a direct interest in an Australian agribusiness.[61]

The second condition is that the threshold test is met. Proposed section 51 of the FATA sets out the threshold test for entities and businesses in table form. Essentially the test is based on a monetary value which will be calculated in each case based on the nature and extent of the acquisition. The threshold test for land is met if the land is of the kind which is prescribed in the regulations. If the land is agricultural land, the threshold test will be met if the value is more than the value prescribed by the regulations.[62] (Whilst the Government has circulated draft regulations, the final form of the regulations has not been tabled in the Parliament.[63])

The third condition is that the entity is one of the kinds of entities to which the FATA applies. That is, depending on the nature of the acquisition, the entity is a corporation which carries on an Australian business, an Australian unit trust or is a holding entity of an Australian unit trust.[64]

The final condition is that there would be, or has been, a change in control of the entity as a result of the action.[65] The exception is where the action is to acquire a direct interest in an Australian entity that is an agribusiness. In that case the final condition is that the action is taken by a foreign person.[66]

Part 3 of the FATA (which is discussed below) sets out the powers of the Treasurer to prohibit a significant action that is proposed to be taken from being taken and to order that a significant action be undone if it has been taken.

Test for notifiable action

Types of action

For an action to be a notifiable action it must fall into the categories of action which are set out in proposed section 47 of the FATA.

The first type of action is to acquire a direct interest in an Australian entity or Australian business that is an agribusiness.[67] The term direct interest is to be prescribed in regulations.[68] The exposure draft regulations provide that a direct interest in an entity or business is an interest of at least 10 per cent in the entity or business; an interest of at least five per cent if the person who acquires the interest has entered a legal arrangement relating to the business; or an interest of any percentage in the entity or business if the person who acquired the interest is in a position to influence or participate in the central management and control of the entity or business or to determine its policy.[69]

Similarly, what constitutes an agribusiness is to be set out in the regulations.[70] Proposed section 22 of the exposure draft Regulations sets out in table form those Australian entities and Australian businesses which will be classified as an agribusiness. Broadly speaking, an Australian entity or Australian business is an agribusiness if it uses assets in carrying on a business in specified classes of the ANZSIC Codes[71] and the value of those assets exceeds 25 per cent of the value of the total assets of the business.[72] The ANZSIC Codes are defined in the exposure draft of the Foreign Acquisitions and Takeovers Regulations which specifies that:

(3)              The business must be carried on wholly or partly in any of the following classes of the Australian and New Zealand Standard Industrial Classification Codes:

              (a)              any of the classes in Division A (agriculture, forestry and fishing);

              (b)              any of the classes in Subdivision 11 of Division C (food product manufacturing), other than any of the following:

              (i)              class 1113 (cured meat and smallgoods manufacturing);

              (ii)              class 1132 (ice cream manufacturing);

              (iii)              class 1162 (cereal, pasta and baking mix manufacturing);

              (iv)              a class in group 117 (bakery product manufacturing);

              (v)              class 1182 (confectionery manufacturing);

              (vi)              a class in group 119 (other food product manufacturing).[73]

The second type of action is to acquire a substantial interest in an Australian entity.[74] A person holds a substantial interest in an entity if the person holds an interest of at least 20 per cent.[75]

The third type of action is to acquire an interest in Australian land, being a legal or equitable interest in Australian land, but does not include:

•       an interest under a lease or licence or in a unit in a unit trust

•       an interest in an agreement giving a right (called a profit à prendre) to take something off another person’s land, or to take something out of the soil of that land

•       an interest in an agreement involving the sharing of profits or income from the use of, or dealings in, Australian land.[76]

Threshold test

The action is a notifiable action only if the entity, business or land meets the threshold test which is set out in proposed sections 51 and 52 of the FATA which is the same threshold test as is used to determine whether an action is a significant action.[77]

Kinds of entities

The third test is that the entity in which the direct interest, or the substantial interest, is taken is an Australian corporation (or a holding entity of the corporation) that carries on an Australian business, whether alone or together with one or more other persons, or an Australian unit trust (or a holding entity of the unit trust).[78]

Taken by a foreign person

The final test is that the action is, or is to be, taken by a foreign person.[79]

A notifiable action is different from a significant action because there does not need to be a change in control.

Part 4 of the FATA (which is discussed below) sets out the requirement that a person who proposes to take a notifiable action must give notice to the Treasurer before taking the action.

Key issue—lack of clarity about agribusiness

As stated above, an action to acquire a direct interest in an Australian entity or Australian business that is an agribusiness is a notifiable action. The difficulty is that the relevant definition of agribusiness is in draft Regulations, rather than the Amendment Bill itself (although this may be amended in the Senate). According to one commentator:

The ongoing sensitivity to foreign government investment in the agricultural sector has resulted in a difficult approach to ascertaining whether an acquisition is notifiable …

Whilst there is finally a definition of agribusiness, an operation need only have 25% of its assets or earnings before interest and tax made up of primary production activities … to be an agribusiness. There will be practical difficulties when ascertaining whether this threshold is met—most businesses do not report such a break up of activities. With agribusiness having a lower threshold (currently $55 million) and with the higher penalties for non-compliance, investors will need to be careful when making acquisitions in targets that have agri sector connections.[80] 

According to the Australian Food and Grocery Council:

Prior to the 2013 election, the Coalition made a commitment to lower the threshold for Foreign Investment Review Board scrutiny to $55 million for agribusiness… The expansion of the definition of ‘agribusiness’ beyond the agricultural sector (Division A of the ANZSIC Code) to include ‘first stage processing’ represents a departure from this election commitment. Given the integrated nature of food processing companies, who undertake both first stage and advanced manufacturing processes in the food sector, this ‘scope creep’ is of serious concern for the food sector.

In the absence of a clearly articulated public policy objective the additional regulatory burden on food processing has not been justified. Furthermore, if the proposed changes are about transparency in relation to sensitive sectors then alternative approaches should first be considered rather than the blunt instrument of applying these legislated changes to more than half of Australia’s food manufacturing sector.[81]

Exemption certificates

An exemption certificate is a certificate given by the Treasurer that specifies an interest or an interest of a kind that, if acquired by a foreign person, does not give rise to a significant action or a notifiable action. The certificate may specify conditions that are required to be complied with.[82]

The Amendment Bill provides for three types of exemption certificates:

•       for new dwellings, that is a dwelling that will be, is being, or has been built on residential land and that has not been previously sold as a dwelling and either has not been previously occupied, or if the dwelling is contained in a development which was sold by its developer, has not been previously occupied for more than 12 months in total[83]

•       for foreign persons who propose to acquire one or more kinds of interests in Australian land[84] and

•       for established dwellings, being a dwelling on residential land that is not a new dwelling.[85]

In each case, the Treasurer must be satisfied that the acquisition of the interest by the foreign person is not contrary to the national interest.[86] The effect of these amendments is to move provisions from the current Foreign Acquisitions and Takeovers Regulations into the FATA.[87]

Part 3—powers of the Treasurer

Part 3 of the Amendment Bill contains the powers of the Treasurer if a significant action is proposed to be taken, or has been taken. The powers are not significantly different from those which already reside in the FATA.[88] However the Bill sets them out in table form to provide the nexus between the relevant action and the orders that the Treasurer may make in respect of the action.

Proposed actions

Essentially, where a significant action that would be contrary to the national interest is proposed to be taken, the Treasurer may make an order prohibiting the action either in whole or in part.[89] In addition, the Treasurer is empowered to make interim orders for a specified period of not more than 90 days for the purpose of making an order prohibiting a person from taking significant action.[90]

Actions that have been taken

Where the Treasurer is satisfied that significant action, the result of which is not in the national interest, has been taken he, or she, may make one of two orders. The first is an order that, within a specified period, the person dispose of the interest that has been acquired.[91]

The second is an order that the person refrain from doing specified acts of a specified kind.[92] In that case, the purpose of the order must be to restore the control of the entity or business as closely as possible to the position in which it was before the significant action was taken or to prevent the occurrence of a change in control of the entity or business.[93] The Treasurer may vary an order which has been made under proposed sections 68 and 69 of the FATA provided that doing so is not contrary to the national interest, the person consents to the variation and the Treasurer is satisfied that the variation does not disadvantage the person.[94]

No objections notifications

The Bill provides that the Treasurer may, in relation to certain significant actions, decide not to object to the action and give the person a no objection notification which imposes no conditions on the acquisition. In that case the no objection notification must be given to the person before the end of 10 days after the date of the decision.[95]

In the alternative, the Treasurer may give a person a no objection notification which imposes conditions or which varies or revokes existing conditions (provided that any variation of a condition is not contrary to the national interest).[96]

The effect of giving a no objection notification is that, where any conditions or time limits have been imposed in respect of the no objection notification, the Treasurer is not able to make a disposal order in relation to the action. The exceptions to this general rule are any of the following:

•       the person is convicted of an offence because a condition included in the notification was contravened (section 87 of the FATA applies) or an order is made under section 19B of the Crimes Act 1914 in respect of the offence or

•       a civil penalty order is made against the person under the Regulatory Powers Act for a contravention relating to a condition included in the notification (sections 93, 96 or 97 of the FATA apply).[97]

Time limits

Under the Amendment Bill, the Treasurer must make decisions in relation to orders, interim orders and no objection notifications within the decision period—that is, within 30 days after the day the Treasurer receives a notice from a person stating that a significant action is proposed to be taken, or such longer period as the Treasurer has agreed to in writing.[98]

Key issue—the nature of the national interest

Currently, the FATA takes a flexible approach to this test and does not prescribe what constitutes the national interest. The same approach is replicated in the Amendment Bill. According to the Explanatory Memorandum to the Amendment Bill:

The question of whether a particular investment is contrary to the national interest is a matter for the Treasurer. While each proposal is considered on a case-by-case basis, the factors that are typically considered by the Treasurer when considering any non-residential proposal include the impact of the proposed investment on Australia‘s national security, the economy and the community, competition, other Government policies (including taxation), and the character of the investor.[99]

However, FINSIA expressed its concerned that the national interest test confers on the Treasurer ‘a largely unbounded discretion’ that ‘allows the politicisation of the approval of foreign investment transactions’.[100] It argues that the omission of a prescribed national interest test in the Amendment Bill:

… has the potential to send a strong signal to foreign investors that the Australian foreign investment regulatory regime is arbitrary and overly restrictive, while being driven by politically determined requirements as opposed to the rule of law. Indeed, the OECD regards Australia as having a more restrictive foreign investment regulatory regime relative to the OECD average, as well as comparable economies including the United States and the United Kingdom.[101]

Part 4—giving notice to the Treasurer

Part 4 of the FATA requires a foreign person who proposes to take a notifiable action to give a notice to the Treasurer before taking the action.[102] Part 5 of the FATA (which is discussed below) sets out the offences and civil penalties which arise from a failure to comply with the requirement to give notice under Part 4. A notice has no effect if it is not given in the manner and form which is approved, in writing by the Secretary.[103]

Limitation on taking significant action

The FATA sets out the time limits which apply to a foreign person who notifies the Treasurer that he, or she, proposes to take a significant action (including a significant action that it a notifiable action).[104] In that case, the foreign person must not take the action before the earliest of:

•       the day that is 10 days after the end of the decision period[105]

•       if an interim order is made—the end of the period specified in the order

•       the day a no objection notification is given to the person.[106]

Part 5—offences and civil penalties

Part 5 of the FATA sets out the circumstances that give rise to a criminal offence and the circumstances in which a person contravenes a civil penalty provision.

Offences

A person commits an offence in the following circumstances:

•       the person is a foreign person who takes an action which is a notifiable action and a compulsory notice of a notifiable action has not been given in relation to the action before it is taken[107]

•       the person is a foreign person who gives a notice to the Treasurer stating that a significant action is proposed to be taken, the person takes the action before the end of the limitation period (set out in proposed section 82) and a change in control has occurred in relation to an action which is a significant action[108]

•       the person engages in conduct which contravenes an order made by the Treasurer[109]

•       the person engages in conduct which contravenes a condition which has been included in a no objection notification imposing conditions or an exemption certificate which includes a condition.[110]

A person (the developer) commits an offence if he, or she, disposes of an interest in a dwelling to a foreign person without advertising the dwelling in Australia, contrary to a condition in an exemption certificate given in relation to an interest in Australian land requiring the sale of the dwelling to be advertised in Australia.[111]

In each of the offences outlined, the penalty for a person is imprisonment for three years, or 750 penalty units, or both.[112] However, if a body corporate is found guilty of any of the offences, subsection 4B(3) of the Crimes Act allows a court to impose a fine equivalent to 3,750 penalty units—that is, five times higher than the penalty that can be imposed on a natural person.[113]

Civil penalties

The Bill contains three separate circumstances that give rise to civil penalties. The first is that a person has contravened an order which has been made by the Treasurer under Part 3.[114] The maximum penalty is 250 penalty units.[115] However, under paragraph 82(5)(a) of the Regulatory Powers Act the maximum pecuniary penalty that can be imposed on a body corporate that contravenes the provision is 1,250 penalty units.[116]

The second is about actions that are not in relation to residential land.[117] In that case, civil penalties arise where:

•       a foreign person fails to give a notice to the Treasurer of a proposed notifiable action before taking the action[118]

•       a foreign person who proposes to take a significant action takes the action before the end of the limitation period set—that is, 10 days after the decision period,[119] the end of any period specified in an order or the day that a no objection certificate is given to the person[120]

•       a person who is given a no objection notification contravenes a condition specified in the notification[121]

•       a person who is specified in an exemption certificate contravenes a condition of the certificate.[122]

In each of the above circumstances the maximum penalty is 250 penalty units.[123]

The third circumstance is about actions that are in relation to residential land. They fall into the following categories:

•       where a foreign person acquires residential land without providing the requisite notification.[124] In that case the maximum penalty for the contravention is the greater of, 10 per cent of the consideration for the residential land acquisition, or 10 per cent of the market value of the interest in the relevant residential land[125]

•       where a foreign person who is a temporary resident holds an interest in more than one established dwelling at the same time[126] or a foreign person who is a not temporary resident holds an interest in an established dwelling[127]

•       where a person who is given a no objection notification relating to a residential land acquisition contravenes a condition that is set out in the notification or where a person contravenes a condition of an exemption certificate[128]

The maximum penalty for either of those contraventions is the amount of the capital gain that was made, or would be made, on the disposal of the interest;[129] or 25 per cent of the consideration for the acquisition of that interest;[130] or 25 per cent of the market value of that interest—whichever is the greatest[131] and

•       where a person contravenes conditions in a no objection notification that require the person to notify the Treasurer when the person acquires or disposes of an interest in residential land, or to advertise the sale of a dwelling in Australia.[132] In that case, the maximum penalty is 250 penalty units.[133]

Key issue—extent of penalties

According to Hickey Lawyers:

Wide-reaching powers (and especially the threat of criminal sanctions) could ultimately result in the reduction of development and the subsequent reduction in job creation. The introduction of criminal sanctions clearly sends a negative message that foreign investment is so fraught with danger that, unless done strictly within the confines of the regime, it is a criminal act.[134]

However, the Government has signalled its determination that penalties should apply stating:

Consistent with the recommendations of the House Economics Committee, the Bill introduces a range of new and stricter penalties that are commensurate with the severity of the breach and ensure that those who break the rules do not profit by their actions.

Criminal penalties will be increased from $90,000 to $135,000 for individuals and will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches of the residential real estate rules.

Third parties such as real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor to breach the rules will also now be subject to both civil and criminal penalties.[135]

Operation of the Regulatory Powers Act

The Regulatory Powers Act provides for a framework of standard regulatory powers exercised by agencies across the Commonwealth. It reflects the Guide to Framing Commonwealth Offences, Infringements Notices and Enforcement Powers[136] and applies to regulatory schemes which trigger its provisions through primary legislation.[137]

Civil penalties

Each civil penalty provision under the FATA is enforceable under Part 4 of the Regulatory Powers Act.[138] In addition, the Treasurer is an authorised applicant for the purposes of the Regulatory Powers Act.[139]

Part 4 of the Regulatory Powers Act operates so that a provision of the FATA will be an enforceable civil penalty provision[140] and the Treasurer may apply to a relevant court[141]—within four years of the alleged contravention—for an order that a person pay the Commonwealth a pecuniary penalty.[142] Where the court is satisfied that the person has contravened the civil penalty provision, it may order the person to pay to the Commonwealth a pecuniary penalty.[143] A pecuniary penalty is a debt payable to the Commonwealth and is recoverable as a judgement debt.[144]

Infringement notices

Those civil penalties that relate to residential land (proposed subsections 94–97) are subject to an infringement notice under Part 5 of the Regulatory Powers Act.[145] The Secretary may appoint a person who holds (or performs the duties of) an APS 6 or higher position within the ATO as an infringement officer for the purposes of the Regulatory Powers Act. The Secretary is the relevant chief executive.[146]

Part 5 of the Regulatory Powers Act operates so that an infringement notice may be given if the infringement officer believes on reasonable grounds that a person has contravened a provision which is subject to an infringement notice. An infringement notice must be given within 12 months after the day on which the contravention is alleged to have taken place.[147]

The required contents of an infringement notice are set out in detail in the Regulatory Powers Act and include:

•       the maximum penalty that a court could impose if the provision were contravened and

•       the time and day of, and the place of, the alleged contravention.[148]

The Regulatory Powers Act also sets out the manner in which the maximum penalty for an alleged contravention of an infringement notice provision is to be calculated.[149]

The above provisions of the Regulatory Powers Act do not apply to the civil penalty provisions in relation to residential land (proposed subsections 94–97).[150] Instead, the FATA provides for a two-tiered infringement notice regime.[151]

An infringement notice is a tier 1 infringement notice if it relates to an alleged contravention by a person of a civil penalty provision and the person notified the Commonwealth of conduct that was the same, or substantially the same, as the conduct alleged in the notice and that notification occurred before an infringement notice was issued. The penalty for a tier 1 infringement notice is 12 penalty units for an individual and 60 penalty units for a corporation.[152]

An infringement notice is a tier 2 infringement notice if it relates to an alleged contravention by a person of a civil penalty provision and it is not a tier 1 infringement notice. The penalty for a tier 2 infringement notice is 60 penalty units for an individual and 300 penalty units for a corporation.

Liability of officers of corporations

The FATA provides that an officer of an entity includes, but is not limited to, the following:

•       the director of a corporation

•       the trustee of a unit trust

•       a person who is in a position to determine the investments or policy of the entity or a trustee of the entity

•       a person who makes decisions that affect the whole, or a substantial part of, the business of the entity

•       a person who has the capacity to affect significantly the financial standing of the entity

•       an administrator under a deed of company arrangement executed by the entity and

•       a liquidator of the entity appointed in a voluntary winding up.[153]

An officer of a corporation commits an offence if the corporation is convicted of an offence under the FATA and the person authorised or permitted the commission of the offence by the corporation.[154] Similarly, an officer of a corporation may be liable to a civil penalty in respect of a corporation if the officer authorised or permitted the contravention of a civil penalty provision by the corporation.[155]

Recovering unpaid penalties

If a court finds that a person has contravened a civil penalty provision and a pecuniary penalty is imposed, the penalty is a debt that is due and payable to the Commonwealth.[156] Under the FATA, the Treasurer may, in specified circumstances, declare that a charge applies on the Australian land in which the person has an interest. The purpose of the charge is to secure the payment of the penalty.[157] In that case, the charge has priority over any other interest in the land—even if another charge, such as a mortgage, has been registered on a land register.[158] A declaration made by the Treasurer must specify the period during which the declaration is in force and the land to which it applies.[159]

According to the Explanatory Memorandum to the Bill the rationale for these provisions is that ‘where pecuniary penalties are ordered against a foreign person, recovery of debts will be difficult if the person is not in, or has few assets in Australia’. The declaration of charge ‘seeks to minimise the risk that proceeds are not available for payment of penalties’.[160] To this end, the charge is not affected by any change in ownership of the land.[161]

How the charge works

Essentially the imposition of a charge on Australian land[162] operates as follows:

•       the charge is created when the civil penalty is imposed or the Treasurer makes a declaration[163]

•       the charge remains in force until the penalty and any costs incurred by the Commonwealth are paid or the interest in land is disposed of by the Treasurer[164]

•       at the end of three months (or a longer term determined by the Treasurer), the interest in the Australian land vests in the Commonwealth in equity[165]

•       the Treasurer then executes all necessary documents to comply with the registration requirements of the relevant state or territory in which the Australian land is located.[166] Once this has occurred, the interest in the Australian land vests in the Commonwealth at law

•       the Treasurer must take action to dispose of the interest in Australian land when the time allowed for lodging an appeal against the decision that a person has contravened a civil penalty provision has elapsed[167] or, where an appeal has been lodged, disposal may take place at the time that the appeal lapses or is determined.[168]

An exception to the general rule that a charge is created over a person’s interest in Australian land is where a restraining order or forfeiture order under Parts 2-1 and 2-2 of the Proceeds of Crime Act 2002 respectively are in force.[169]

Part 6—fees

Part 6 of the Amendment Bill sets out the circumstances in which fees are payable.[170] The amounts of the fees are set out in Part 2 of the Fees Imposition Bill which is discussed later in this Bills Digest. Fees are to be paid before the Treasurer exercises his, or her, powers.[171] However, the Treasurer may waive or remit the whole or part of a fee if it is not contrary to the public interest to do so.[172]

Part 7—record-keeping and confidentiality of information

A person must make records of the acts, transactions, events or circumstances relating to:

•       the taking of a significant action, a notifiable action or an action that is specified in an exemption certificate[173]

•       complying with a condition in a no objection notification or an exemption certificate[174] and

•       the disposal of an interest in residential land.[175]

An offence of strict liability arises where a person who is required to make and keep records, fails to do so.[176] The maximum penalty is a fine not exceeding 30 penalty units.[177]

The Bill provides that information which is obtained under, or in accordance with, the FATA (with some specified exceptions[178]) is protected information.[179] The Bill sets out the circumstances in which disclosure of protected information is authorised—for example, to specified Commonwealth Ministers and Commonwealth entities.[180] A person commits an offence if the person obtains information that is protected information and makes a record of the information, discloses or otherwise uses it in the making of the record, and the disclosure or the use of the information was not authorised. The maximum penalty is imprisonment for two years or 120 penalty units, or both.[181] The offence does not apply to a person who makes a record of, discloses or otherwise uses protected information in performing his, or her, functions or duties or in exercising his, or her, powers under the FATA if the person does so in good faith.[182]

Part 8—miscellaneous provisions

Part 8 contains miscellaneous provisions which build on Part III of the existing FATA.

Treasurer’s power to obtain information

The Treasurer may, by notice in writing given to the person, require the person to give or to produce documents to the Treasurer, or his delegate.[183] The impetus for the giving of the notice is that the Treasurer has reason to believe that the person can give the information or produce the specified documents.

A person who has been given a notice commits an offence if the person fails to comply with it. The penalty is imprisonment for six months or 30 penalty units, or both.[184] However, a person who fails to comply with the relevant notice does not commit an offence if the person complies with the notice to the extent to which the person is capable of complying with it. A defendant bears an evidential burden in relation to this defence.[185]

Importantly, a person is not excused from giving information or producing a document on the ground that doing so may tend to incriminate her or him.[186] The Scrutiny of Bills Committee drew attention to this provision and noted the comments in the Explanatory Memorandum that:

The removal of the privilege, subject to a use or derivative use immunity, assists the Treasurer and the Commissioner to monitor and enforce compliance with this Act and thereby assist in the effective administration of this Act. That is in circumstances where information may be held offshore and information necessary to administer the Act may not otherwise be available. The effective administration of this Act is vital to ensuring that the Australian public continues to have confidence in the way foreign investment is regulated in Australia.[187]

Regulation making power

The Governor-General is empowered to make regulations about matters that are required or permitted by the FATA or are necessary or convenient to be prescribed for carrying out or giving effect to the FATA.[188]

There is a specific power for the regulations to deal with a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or other writing as in force or existing from time to time.[189] This provision overrides subsection 14(2) of the Legislative Instruments Act 2003.[190]

The Scrutiny of Bills Committee, whilst noting that the Explanatory Memorandum contained useful examples of how this provision may operate, considered that the drafting of the subsection did not limit its use to the examples provided. That being the case, the Scrutiny of Bills Committee preferred that the provision either explicitly be restricted to those examples, or that the provision include a requirement for free and public access to any incorporated material.[191]

Schedule 2

The provisions in Schedule 2 to the Amendment Bill commence immediately after the commencement of Schedule 1 to the Acts and Instruments (Framework Reform) Act 2015.[192] That Act received Royal Assent on 5 March 2015 and commences on the earlier of a single day to be fixed by Proclamation or 5 March 2016.

The Acts and Instruments (Framework Reform) Act amends the Legislative Instruments Act to establish:

… a new category of instruments called notifiable instruments, which will be able to be registered in authoritative form. The new category of notifiable instruments is designed to encompass instruments that are not appropriate to register as legislative instruments, but for which public accessibility and centralised management is desirable.

Notifiable instruments will be published in a register known as the Federal Register of Legislation, which will also incorporate the existing Acts database established under the Acts Publication Act 1905 and the existing Federal Register of Legislative Instruments. [193]

The amendments in Schedule 2 to the Amendment Bill will be required once the Acts and Instruments (Framework Reform) Act commences.

Schedule 3

The amendments in Schedule 3 to the Amendment Bill commence on 1 December 2015.

Schedule 3 to the Amendment Bill contains application and transitional provisions. Item 1 of Schedule 3 contains relevant definitions, including transitional period which means the period beginning on 1 March 2015 and ending on 30 November 2015. Items 2 and 3 of Schedule 3 to the Amendment Bill provide that certain notices given under old sections of the FATA or by the Treasurer under the Policy before the commencement of the Amendment Bill or during the transitional period are deemed to have been made under the FATA as amended by the Bill.

Schedule 4

The amendments in Schedule 4 to the Amendment Bill apply to the confidentiality provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006,[194] the Income Tax Assessment Act 1997[195] and the Taxation Administration Act 1953[196] (TA Act). The amendments in Schedule 4 to the Bill commence on 1 December 2015.

In particular, the amendments to the TA Act insert proposed Division 354—Power to obtain information about rights or interests in property into Schedule 1 of that Act. The Bill empowers the Commissioner, by notice in writing, to require a person to provide information about a property right or interest—that is, a legal or equitable interest in the property or a right, power or privilege in connection with the property whether the interest is present or future and whether vested or contingent.[197] The notice must specify the property to which the notice applies, the information required, the period within which the information is to be given and the manner of giving the information.[198] The period specified in the notice must be at least 14 days after the notice is given—unless the Commissioner is satisfied that a shorter period is necessary.[199]

Comments by the Scrutiny of Bills Committee

The Scrutiny of Bills Committee noted that under new Division 354, a person who fails to comply with a notice to give information under proposed subsection 354-5(1) of Schedule 1 to the TA Act may be guilty of an offence against subsection 8C(1) of that Act. However, the effect of subsection 8C(1B) is that a person does not commit an offence to the extent to which the person is not capable of complying with the obligation. A defendant bears an evidential burden in relation to this matter.

The Scrutiny of Bills Committee noted that the use of the reverse onus of proof was justified in the Explanatory Memorandum on the basis that it ‘is appropriate because generally only the defendant will know the reason why she or he will was (sic) unable to fully comply with the notice’. That being the case, ‘to the extent this provision might be considered to limit the presumption of innocence the limitation is reasonable in all the circumstances’.[200]

The main protection for taxpayer confidentiality is contained in Subdivision 355-B of the TA Act. It is an offence for taxation officers to disclose tax information that identifies an entity, or is reasonably capable of being used to identify an entity, except in certain specified circumstances. However, there are exceptions to that general rule. In particular section 355-55 of the TA Act allows for specified disclosure to Ministers and section 355-65 allows for disclosures for other government purposes. Items 4–8 of Schedule 4 amend those sections to accommodate the altered foreign investment framework. In addition, item 9 repeals and replaces section 355-75 of Schedule 1 of the TA Act to allow limited disclosure to courts and tribunals for the purposes of the FATA.

Fees Imposition Bill

Commencement

Sections 1–4 commence on Royal Assent. Sections 5–13 commence on the later of the day after Royal Assent or the commencement of Schedule 1 to the Foreign Acquisitions and Takeovers Legislation Amendment Act 2015. However, the provisions do not commence if the Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 does not commence.

Key provisions

The Fees Imposition Bill provides that the fees that are payable under Part 6 of the FATA (as amended) are imposed as a tax.[201]

The fees payable for applications for exemption certificates are based on whether the exemption certificate is for new dwellings ($25,000), established dwellings ($5,000 if the consideration for the acquisition is $1,000,000 or less—otherwise worked out by a statutory formula[202]), land ($25,000 if the consideration for the acquisition is $1 billion or less—otherwise $100,000) or whether the relevant certificate is one of an additional kind of certificate provided for by regulations (not more than $25,000).[203] The fee for a variation of an exemption certificate is $5,000.

A fee is payable for giving a notice of a notifiable action. The amount of the fee varies depending on whether the notifiable action relates to the acquisition of, for instance, an agribusiness (($25,000 if the consideration for the acquisition is $1 billion or less—otherwise $100,000), an interest in residential land or agricultural land (($5,000 if the consideration for the acquisition is $1,000,000 or less—otherwise worked out by a statutory formula[204]), commercial land ($10,000 if the land is vacant, otherwise $25,000) or a mining tenement ($25,000).

Where one agreement covers more than one action for which a fee is payable, then:

•       in relation to each acquisition of an interest in residential land covered by the agreement a separate fee is payable

•       in relation to any additional acquisitions other than in residential land covered by the agreement the fee is the highest fee payable in respect of those acquisitions.[205]

The Fees Imposition Bill provides that regulations may set lower fees than those that are specified.[206] This may be by way of setting a new amount or by changing the statutory formula for some fees.[207]

The amount of fees, whether as specified in the Fees Imposition Bill or in subsequent regulations, is to be indexed annually in accordance with the formula which is set out in the Bill.[208] Item 10 of Schedule 3 to the Amendment Bill provides that indexation applies for each financial year starting on or after 1 July 2016.

Key issue—amount of the fees

Currently the FIRB does not charge fees. That being the case, the fees that are to be imposed are a significant departure from the current position. Whilst all stakeholders seem to be in favour of charging a fee, some would prefer if they were lower than those which are proposed[209] and that they were subject to the Australian Government’s Charging Framework.[210] According to the Australian Financial Markets Association:

The proposed fees will act as a tax on foreign investment, albeit a small one. It should be noted that the effective incidence of the proposed fees will fall on both foreign investors and the resident vendors of domestic assets. As the Henry review observed, foreign direct investment has a particularly high elasticity with respect to tax rates given the international mobility of foreign capital and the discretionary nature of foreign investors’ exposure to Australian regulation. The application fees would also amplify the deterrent effect arising from uncertainty in relation to the Treasurer’s discretion to reject applications or impose conditions on approvals on effectively open-ended ‘national interest’ grounds. Australia recently ranked relatively poorly in an international comparison of foreign investor perceptions of the rule of law.[211]

However, as stated above, the Fees Imposition Bill has been passed by the Senate with no amendment.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Entry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

[1].              Foreign Acquisitions and Takeovers Act 1975, accessed 21 October 2015.

[2].              Parliament of Australia, ‘Register of Foreign Ownership of Agricultural Land Bill 2015 homepage’, Australian Parliament website, accessed 21 October 2015.

[3].              Ibid. See also: Parliament of Australia, ‘Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 homepage’ and ‘Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 homepage’, Australian Parliament website, accessed 23 November 2015.

[4].              Parliament of Australia, ‘Register of Foreign Ownership of Agricultural Land Bill 2015 homepage,’ and Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 homepage’, op. cit.

[5].              Parliament of Australia, ‘Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 homepage’, op. cit.

[6].              Regulatory Powers (Standard Provisions) Act 2014, accessed 2 January 2015.

[7].              Acts and Instruments (Framework Reform) Act 2015, accessed 26 October 2015.

[8].              Anti-Money Laundering and Counter-Terrorism Financing Act 2006, accessed 26 October 2015.

[9].              Income Tax Assessment Act 1997, accessed 26 October 2015.

[10].              Taxation Administration Act 1953, accessed 26 October 2015.

[11].              Foreign Acquisitions and Takeovers Regulations 1989, accessed 26 October 2015.

[12].              Foreign Investment Review Board (FIRB), ‘Policy’, FIRB website, accessed 26 October 2015.

[13].              Foreign Investment Review Board, Australia’s foreign investment policy, FIRB, Canberra, June 2015, p. 1, accessed 26 October 2015.

[14].              Ibid., p. 8.

[15].              Ibid., p. 9.

[16].              S Maiden, ‘Foreign home ownership in the spotlight’, Sunday Territorian, 16 March 2014, p. 8, accessed 26 October 2015.

[17].              N Bita, ‘Foreigners in splurge on houses’, Weekend Australian, 1 March 2014, p. 1; R Harley, ‘2014: the year of the Chinese developer’, Australian Financial Review, 6 March 2014, p. 41’ J Irvine, ‘Asian cash adds to home price pressure’, Adelaide Advertiser, 8 March 2014, p. 5; T Condon, ‘Asian dynamic drives housing’, Weekend Australian, 12 July 2014, p. 25, accessed 26 October 2015.

[18].              Details of the terms of reference of the inquiry, submissions to the House Economics Committee, transcripts of oral hearings and the final report are available on the inquiry homepage, accessed 26 October 2015.

[19].              House of Representatives Standing Committee on Economics, Report on foreign investment in residential real estate, Commonwealth of Australia, Canberra, November 2014, p. 3, accessed 26 October 2015.

[20].              Ibid., pp. xvii–xix.

[21].              Treasury, ‘Australian Government response to the House of Representatives Standing Committee on Economics report: Foreign investment in residential real estate’, Treasury website, 19 August 2015, accessed 2 November 2015.

[22].              Ibid., p. 74.

[23].              T Abbott (Prime Minister) and J Hockey (Treasurer), Government to strengthen Australia’s foreign investment framework, media release, 25 February 2015, accessed 2 November 2015.

[24].              T Abbott (Prime Minister) and J Hockey (Treasurer), Government strengthens the foreign investment framework, media release, 2 May 2015, accessed 20 November 2015.

[25].              Treasury, Modernising Australia’s foreign investment framework, options paper, Treasury, Canberra, 18 May 2015, accessed 2 November 2015.

[26].              Treasury, ‘Submissions: modernising Australia’s foreign investment framework’, Treasury website, accessed 2 November 2015.

[27].              Treasury, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015: exposure draft, Treasury, Canberra, 6 July 2015, accessed 2 November 2015.

[28].              The terms of reference, submissions to the Economics Committee and the final report are available on the inquiry homepage, accessed 21 October 2015.

[29].              Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, The Senate, Canberra, October 2015, accessed 26 October 2015.

[30].              Ibid., p. 30.

[31].              Labor Senators, Dissenting report, Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, The Senate, Canberra, 2015, pp. 31–35, accessed 26 October 2015.

[32].              Administrative Decisions (Judicial Review) Act 1977, accessed 6 November 2015.

[33].              Judiciary Act 1903, accessed 6 November 2015.

[34].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills, p. 71, accessed 6 November 2015.

[35].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 9, 2015, 9 September, pp. 5–15 and p. 19, accessed 2 November 2015.

[36].              G Gray, ‘Second reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills’, House of Representatives, Debates, 16 September 2015, p. 10451, accessed 6 November 2015.

[37].              Australian Greens (AG), ‘Foreign ownership of land’, Australian Greens policy document, accessed 6 November 2015.

[38].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills, op. cit., p. 8.

[39].              Ibid.

[40].              The Statement of Compatibility with Human Rights can be found at pages 139–159 of the Explanatory Memorandum to the Bill.

[41].              Parliamentary Joint Committee on Human Rights, Twenty-seventh report of the 44th Parliament, 8 September 2015, p. 2, accessed 27 October 2015.

[42].              Foreign Acquisitions and Takeovers Act, proposed section 4.

[43].              Foreign Acquisitions and Takeovers Act, proposed section 5 provides that a person is ordinarily resident in Australia if the person is in Australia for 200 days or more in any 12 month period.

[44].              Foreign Acquisitions and Takeovers Act, proposed section 4 provides that a person holds a substantial interest in an entity if the person holds an interest of at least 20 per cent in the entity.

[45].              R Lou and S Lilly, ‘Foreign Investment & FIRB Update—Bills to amend Foreign Acquisitions and Takeovers Act’, Norton Rose Fulbright website, August 2015, accessed 18 November 2015.

[46].              Financial Services Institute, Submission to the Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, 18 September 2015, p. 1, accessed 18 November 2015.

[47].              Ibid., p. 2.

[48].              Foreign Investment Review Board, Australia’s foreign investment policy, June 2015, op. cit., p. 2.

[49].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 9, 2015, op. cit., pp. 6–7.

[50].              Senate Standing Committee for the Scrutiny of Bills, Report, 11, 2015, 14 October 2015, pp. 659–660, accessed 6 November 2015.

[51].              Ibid., p. 660.

[52].              Foreign Acquisitions and Takeovers Act, proposed section 4 provides that the term entity means a corporation or a unit trust.

[53].              Foreign Acquisitions and Takeovers Act, proposed section 4 provides that an Australian entity or Australian business is an agribusiness in the circumstances prescribed by the regulations.

[54].              Foreign Acquisitions and Takeovers Act, proposed section 4 provides that the term land includes a building (including a new dwelling or an established dwelling) or a part of a building and subsoil of land.

[55].              Foreign Acquisitions and Takeovers Act, proposed section 40.

[56].              Foreign Acquisitions and Takeovers Act, proposed section 41.

[57].              Foreign Acquisitions and Takeovers Act, proposed section 43.

[58].              Foreign Acquisitions and Takeovers Act, proposed section 44.

[59].              Foreign Acquisitions and Takeovers Act, proposed paragraph 40(2)(b).

[60].              Foreign Acquisitions and Takeovers Act, proposed paragraph 40(2)(d).

[61].              Foreign Acquisitions and Takeovers Act, proposed paragraph 40(2)(a).

[62].              Foreign Acquisitions and Takeovers Act, proposed subsections 40(3) and 52(2).

[63].              Treasury, Foreign Acquisitions and Takeovers Regulation 2015 and Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015: exposure draft, Treasury website, accessed 18 November 2015.

[64].              Foreign Acquisitions and Takeovers Act, proposed subsection 40(4).

[65].              Foreign Acquisitions and Takeovers Act, proposed subsection 40(6).

[66].              Foreign Acquisitions and Takeovers Act, proposed paragraph 40(2)(a) and proposed subsection 40(5).

[67].              Foreign Acquisitions and Takeovers Act, proposed paragraph 47(2)(a).

[68].              Foreign Acquisitions and Takeovers Act, proposed section 4.

[69].              Section 14, Foreign Acquisitions and Takeovers Regulation 2015: exposure draft, accessed 18 November 2015.

[70].              Foreign Acquisitions and Takeovers Act, proposed section 4.

[71].              ANZSIC Codes is defined at section 5 of the exposure draft Regulations, but is not defined in the Amendment Bill. However, Senator Wong has moved an amendment to insert an appropriate definition. If the amendment is passed, the following will be inserted into section 4 of the Foreign Acquisitions and Takeovers Act: Australian and New Zealand Standard Industrial Classification Codes means the Australian and New Zealand Standard Industrial Classification Codes, as in force from time to time, published by the Australian Bureau of Statistics. This is the definition that appears in the exposure draft Regulations.

[72].              Foreign Acquisitions and Takeovers Regulation 2015: exposure draft, proposed subsection 22(2).

[73].              Foreign Acquisitions and Takeovers Regulation 2015: exposure draft, proposed subsection 22(4).

[74].              Foreign Acquisitions and Takeovers Act, proposed paragraph 47(2)(b).

[75].              Foreign Acquisitions and Takeovers Act, proposed section 4.

[76].              Foreign Acquisitions and Takeovers Act, proposed subsection 12(1).

[77].              Foreign Acquisitions and Takeovers Act, proposed subsection 47(3).

[78].              Foreign Acquisitions and Takeovers Act, proposed subsection 21(4) defines the term holding entity for the purposes of the Act.

[79].              Foreign Acquisitions and Takeovers Act, proposed subsection 47(5).

[80].              M Brennan and I Eow, ‘The foreign investment reforms’, King and Wood Mallesons website, 2 November 2015, accessed 18 November 2015.

[81].              Australian Food and Grocery Council, Submission to the Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, p. 4, accessed 18 November 2015.

[82].              Foreign Acquisitions and Takeovers Act, proposed section 57.

[83].              Foreign Acquisitions and Takeovers Act, proposed sections 4 and 57.

[84].              Foreign Acquisitions and Takeovers Act, proposed section 58.

[85].              Foreign Acquisitions and Takeovers Act, proposed section 59.

[86].              Foreign Acquisitions and Takeovers Act, proposed subsections 57(2), 58(2) and 59(2).

[87].              Foreign Acquisitions and Takeovers Regulations, paragraphs 3(e) and (r).

[88].              Foreign Acquisitions and Takeovers Act, section 18.

[89].              Foreign Acquisitions and Takeovers Act, proposed subsections 67(1) and (2).

[90].              Foreign Acquisitions and Takeovers Act, proposed section 68.

[91].              Foreign Acquisitions and Takeovers Act, proposed section 69.

[92].              Foreign Acquisitions and Takeovers Act, proposed subsections 69(1) and (2).

[93].              Foreign Acquisitions and Takeovers Act, proposed subsection 69(4).

[94].              Foreign Acquisitions and Takeovers Act, proposed subsection 71(1).

[95].              Foreign Acquisitions and Takeovers Act, proposed subsections 75(1)–(3).

[96].              Foreign Acquisitions and Takeovers Act, proposed subsections 74(2) and (4).

[97].              Foreign Acquisitions and Takeovers Act, proposed section 70.

[98].              Foreign Acquisitions and Takeovers Act, proposed section 77.

[99].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills, pp. 11–12.

[100].              Financial Services Institute, Submission to the Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, op. cit., p. 2.

[101].              Ibid.

[102].              Foreign Acquisitions and Takeovers Act, proposed section 81.

[103].              Foreign Acquisitions and Takeovers Act, proposed section 135.

[104].              Foreign Acquisitions and Takeovers Act, proposed section 82.

[105].              Proposed subsection 77(5) of the Foreign Acquisitions and Takeovers Act defines the decision period as the period of 30 days after the day the Treasurer receives a notice from a person stating that a significant action is proposed to be taken or such longer period as the Treasurer has agreed to in writing.

[106].              Foreign Acquisitions and Takeovers Act, proposed subsection 82(2).

[107].              Foreign Acquisitions and Takeovers Act, proposed section 84.

[108].              Foreign Acquisitions and Takeovers Act, proposed section 85.

[109].              Foreign Acquisitions and Takeovers Act, proposed section 86.

[110].              Foreign Acquisitions and Takeovers Act, proposed section 87.

[111].              Foreign Acquisitions and Takeovers Act, proposed section 88.

[112].              Under section 4AA of the Crimes Act 1914, a penalty unit is equivalent to $180. This means the maximum penalty is $135,000.

[113].              The penalty is equivalent to $675,000.

[114].              Foreign Acquisitions and Takeovers Act, proposed section 90.

[115].              The penalty is equivalent to $45,000.

[116].              The penalty is equivalent to $225,000.

[117].              Foreign Acquisitions and Takeovers Act, proposed section 89.

[118].              Foreign Acquisitions and Takeovers Act, proposed section 91.

[119].              Proposed subsection 77(5) sets out the period within which the Treasurer must make a decision or make an order as being 30 days after the Treasurer receives the notice that a significant action is proposed to be taken. The Treasurer may extend the period if the person makes a written request to the Treasurer to that effect.

[120].              Foreign Acquisitions and Takeovers Act, proposed section 92.

[121].              Foreign Acquisitions and Takeovers Act, proposed subsection 93(1).

[122].              Foreign Acquisitions and Takeovers Act, proposed subsection 93(2).

[123].              The penalty is equivalent to $45,000. However, under paragraph 82(5)(a) of the Regulatory Powers (Standard Provisions) Act the maximum pecuniary penalty that can be imposed on a body corporate that contravenes the provision is 1,250 penalty units, being equivalent to $225,000.

[124].              Foreign Acquisitions and Takeovers Act, proposed section 94.

[125].              Foreign Acquisitions and Takeovers Act, proposed subsection 94(4).

[126].              Foreign Acquisitions and Takeovers Act, proposed subsection 95(1).

[127].              Foreign Acquisitions and Takeovers Act, proposed subsection 95(4).

[128].              Foreign Acquisitions and Takeovers Act, proposed subsections 96(1) and (2). The note to subsection 96(1) provides examples of the relevant conditions, including a condition prohibiting a temporary resident from leasing an established dwelling.

[129].              Foreign Acquisitions and Takeovers Act, proposed paragraphs 95(7)(a) and 96(4)(a).

[130].              Foreign Acquisitions and Takeovers Act, proposed paragraphs 95(7)(b) and 96(4)(b).

[131].              Foreign Acquisitions and Takeovers Act, proposed paragraphs 95(7)(c) and 96(4)(c).

[132].              Foreign Acquisitions and Takeovers Act, proposed section 97.

[133].              The penalty is equivalent to $45,000.

[134].              Hickey Lawyers, Submission to the Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, (see attachment dated March 2015), p. 3, accessed 18 November 2015.

[135].              J Hockey (Treasurer), ‘Second reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015’, House of Representatives, Debates, 20 August 2015, p. 8984, accessed 19 November 2015.

[136].              Attorney-General’s Department (AGD), Guide to framing Commonwealth offences, infringements notices and enforcement powers, AGD, Canberra, September 2011, accessed 16 November 2015.

[137].              Replacement Explanatory Memorandum, Regulatory Powers (Standard Provisions) Bill 2014, p. 2, accessed 16 November 2015.

[138].              Proposed subsection 99(1) of the Foreign Acquisitions and Takeovers Act, together with sections 78 and 79 of the Regulatory Powers (Standard Provisions) Act operate to apply Part 4 of that Act to the Foreign Acquisitions and Takeovers Act.

[139].              Proposed subsection 99(2) of the Foreign Acquisitions and Takeovers Act.

[140].              Proposed subsection 99(1) of the Foreign Acquisitions and Takeovers Act and section 79 of the Regulatory Powers (Standard Provisions) Act.

[141].              Foreign Acquisitions and Takeovers Act, proposed subsection 99(3).

[142].              Regulatory Powers (Standard Provisions) Act, subsections 82(1) and (2).

[143].              Regulatory Powers (Standard Provisions) Act, subsection 82(3).

[144].              Regulatory Powers (Standard Provisions) Act, section 83.

[145].              Proposed section 100 of the Foreign Acquisitions and Takeovers Act, together with subsection 99(2) and section 100 of the Regulatory Powers (Standard Provisions) Act operate to apply Part 5 of that Act to the Foreign Acquisitions and Takeovers Act.

[146].              Foreign Acquisitions and Takeovers Act, proposed subsection 100(4).

[147].              Regulatory Powers (Standard Provisions) Act, subsection 103(2).

[148].              Regulatory Powers (Standard Provisions) Act, subsection 104(1).

[149].              Regulatory Powers (Standard Provisions) Act, subsection 104(2).

[150].              Foreign Acquisitions and Takeovers Act, proposed subsection 100(5).

[151].              Foreign Acquisitions and Takeovers Act, proposed subsection 100(6) and proposed section 101.

[152].              Foreign Acquisitions and Takeovers Act, proposed subsection 101(1).

[153].              Foreign Acquisitions and Takeovers Act, proposed section 4.

[154].              Foreign Acquisitions and Takeovers Act, proposed subsection 102(1).

[155].              Foreign Acquisitions and Takeovers Act, proposed subsection 102(2).

[156].              Regulatory Powers (Standard Provisions) Act, section 83.

[157].              Foreign Acquisitions and Takeovers Act, proposed subsection 104(3).

[158].              Foreign Acquisitions and Takeovers Act, proposed subsection 106(1).

[159].              Foreign Acquisitions and Takeovers Act, proposed subsection 105(3).

[160].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, p. 85.

[161].              Foreign Acquisitions and Takeovers Act, proposed subsection 106(3).

[162].              An interest in Australian land includes an interest under a long term lease. Foreign Acquisitions and Takeovers Act, proposed section 12 and proposed subsection 104(2).

[163].              Foreign Acquisitions and Takeovers Act, proposed subsection 104(4).

[164].              Foreign Acquisitions and Takeovers Act, proposed subsection 106(2).

[165].              Foreign Acquisitions and Takeovers Act, proposed paragraph 107(2)(a).

[166].              Foreign Acquisitions and Takeovers Act, proposed paragraph 107(2)(b) and proposed subsection 107(3).

[167].              Any appeal would be made under the Judiciary Act.

[168].              Foreign Acquisitions and Takeovers Act, proposed section 109.

[169].              Proceeds of Crime Act 2002, accessed 17 November 2015.

[170].              Foreign Acquisitions and Takeovers Act, proposed section 113.

[171].              Foreign Acquisitions and Takeovers Act, proposed section 114.

[172].              Foreign Acquisitions and Takeovers Act, proposed section 115.

[173].              Foreign Acquisitions and Takeovers Act, proposed paragraphs 117(1)(a) and (b).

[174].              Foreign Acquisitions and Takeovers Act, proposed paragraph 117(1)(c).

[175].              Foreign Acquisitions and Takeovers Act, proposed paragraph 117(1)(d).

[176].              Foreign Acquisitions and Takeovers Act, proposed subsection 119. The imposition of strict liability means that a fault element does not need to be satisfied, but the offence will not criminalise honest errors and a person cannot be held liable if he, or she, had an honest and reasonable belief that they were complying with relevant obligations.

[177].              The penalty is equivalent to $5,400.

[178].              Foreign Acquisitions and Takeovers Act, proposed paragraphs 120(1)(a) and (b).

[179].              Foreign Acquisitions and Takeovers Act, proposed subsection 120(1).

[180].              Foreign Acquisitions and Takeovers Act, proposed sections 121–127.

[181].              Foreign Acquisitions and Takeovers Act, proposed section 128. The penalty is equivalent to $21,600.

[182].              Foreign Acquisitions and Takeovers Act, proposed section 129.

[183].              Foreign Acquisitions and Takeovers Act, proposed subsection 133(2).

[184].              This is equivalent to $5,400.

[185].              Foreign Acquisitions and Takeovers Act, proposed subsection 133(6).

[186].              Foreign Acquisitions and Takeovers Act, proposed subsection 133(7).

[187].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, op. cit., p. 100.

[188].              Foreign Acquisitions and Takeovers Act, proposed section 139.

[189].              Foreign Acquisitions and Takeovers Act, proposed subsection 139(3).

[190].              Legislative Instruments Act 2003, accessed 11 November 2015.

[191].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 9, 2015, op. cit., p. 11.

[192].              Acts and Instruments (Framework Reform) Act 2015, accessed 2 November 2015.

[193].              Explanatory Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills, op. cit., p. 105.

[194].              Anti-Money Laundering and Counter-Terrorism Financing Act 2006, accessed 2 November 2015.

[195].              Income Tax Assessment Act 1997, accessed 2 November 2015.

[196].              Taxation Administration Act 1953, accessed 2 November 2015.

[197].              Taxation Administration Act, proposed subsections 354-5(1) and (2), inserted by item 3 of Schedule 3 to the Amendment Bill.

[198].              Taxation Administration Act, proposed subsection 354-5(3).

[199].              Taxation Administration Act, proposed subsection 354-5(7).

[200].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 9, 2015, op. cit., p. 12.

[201].              Foreign Acquisitions and Takeovers Legislation Amendment Act, proposed section 5.

[202].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed subsection 6(2).

[203].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed subsection 6(1).

[204].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed subsection 7(2).

[205].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed subsection 9(1).

[206].              The regulation making power is contained in proposed section 13 of the Foreign Acquisitions and Takeovers Fees Imposition Act.

[207].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed section 11.

[208].              Foreign Acquisitions and Takeovers Fees Imposition Act, proposed section 12.

[209].              Property Council of Australia, Submission to the Senate Standing Committee on Economics, Inquiry into the provisions of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills, 18 September 2015, p. 1, accessed 18 November 2015.

[210].               HIA, Submission to Treasury, Foreign Acquisitions and Takeovers Regulation 2015 and Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015: exposure draft, 17 July 2015, p. 1, accessed 8 November 2015.

[211].              Australian Financial Markets Association, Submission to Treasury, Foreign Acquisitions and Takeovers Regulation 2015 and Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015: exposure draft, 17 July 2015, p. 2, accessed 8 November 2015.