Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Schedule 1—Amendments about interests in Australian agricultural land

Schedule 1 Amendments about interests in Australian agricultural land

Foreign Acquisitions and Takeovers Act 1975

1  Section 5 (after the definition of Australia )

Insert:

Australian agricultural land means land situated in Australia that is used predominantly for carrying on a business of primary production.

Australian agricultural land corporation means a corporation to which section 13E applies.

Australian agricultural land trust estate means a trust estate to which section 13F applies.

2  Paragraph 5(3)(aa)

After “urban land”, insert “or an interest in Australian agricultural land”.

3  After section 12C

Insert:

12D   Interests in Australian agricultural land

             (1)  In this Act, interest in Australian agricultural land means:

                     (a)  a legal or equitable interest in Australian agricultural land;

                     (b)  an interest in a share in a company that owns Australian agricultural land, being a share that entitles the holder to a right to access, manage, oversee, make decisions in relation to or profit from the land;

                     (c)  an interest as lessee or licensee in a lease or licence giving rights to occupy Australian agricultural land where the term of the lease or licence (including any extension) is reasonably likely, at the time the interest is acquired, to exceed 5 years;

                     (d)  an interest in an arrangement involving the sharing of profits or income from the use of, or dealings in, Australian agricultural land;

                     (e)  an interest in a share in an Australian agricultural land corporation;

                      (f)  an interest in a unit in an Australian agricultural land trust estate; or

                     (g)  if the trustee of an Australian agricultural land trust estate is a corporation—an interest in a share in that corporation.

             (2)  For the purposes of this Act, an interest is an interest in Australian agricultural land even if it is the only interest that exists in the land or other thing concerned.

             (3)  For the purposes of this Act, a person acquires an interest in Australian agricultural land even if:

                     (a)  the person acquires the interest jointly with another person or persons;

                     (b)  the person has previously acquired an interest in Australian agricultural land; or

                     (c)  the interest is an increase in the amount of an existing interest of the person in Australian agricultural land.

             (4)  For the purposes of this Act, where a person:

                     (a)  enters into an agreement; or

                     (b)  acquires an option;

to acquire an interest in Australian agricultural land, the person shall be taken to have acquired that interest in Australian agricultural land.

             (5)  For the purposes of this Act, a person shall be taken not to acquire an interest in Australian agricultural land if the person acquires the interest:

                     (a)  solely to hold as security for the purposes of a moneylending agreement; or

                     (b) by way of enforcement of a security held solely for the purposes of a moneylending agreement.

             (6)  For the purposes of this Act, a person shall be taken not to acquire an interest in Australian agricultural land if the person acquires the interest by will or by devolution by operation of law.

             (7)  A reference in this Act to the acquisition of an interest in Australian agricultural land does not include a reference to the acquisition of an interest in Australian agricultural land from:

                     (a)  the Commonwealth, a State or a Territory;

                     (b)  a corporation constituted for a public purpose by a law of the Commonwealth or of a State or Territory; or

                     (c)  a local governing body.

             (8)  Where the regulations provide that this Act, or a specified provision of this Act, does not apply in relation to an acquisition, of a kind specified in the regulations, of an interest in Australian agricultural land (the subject land ), this Act, or the provision, does not so apply.

             (9)  Regulations made for the purposes of subsection (8) may not provide that this Act, or any provision of this Act, does not apply in relation to an acquisition of an interest in Australian agricultural land, if the subject land is greater than 5 hectares in area.

4  After section 13D

Insert:

13E   Australian agricultural land corporations

             (1)  For the purposes of this Act, a corporation is an Australian agricultural land corporation if:

                     (a)  where the corporation is not a holding corporation—the value of its eligible land assets exceeds 50% of the value of its total assets; or

                     (b)  where the corporation is a holding corporation—the sum of the values of the eligible land assets of the corporation and of each of its subsidiaries exceeds 50% of the sum of the values of the total assets of the corporation and of each of its subsidiaries.

             (2)  Where a reasonable value of the eligible land assets or of the total assets of a corporation is:

                     (a)  shown in the last audited balance-sheet of the corporation; or

                     (b)  if not shown in the last audited balance-sheet—shown in the accounting records of the corporation;

the value of those assets as shown shall be taken to be their value for the purposes of subsection (1).

             (3)  For the purposes of determining the values referred to in paragraph (1)(b), any asset of a corporation that consists of shares in any subsidiary of the corporation shall be disregarded.

             (4)  In this section:

eligible land assets , in relation to a corporation, means so much of the corporation’s total assets as consists of interests in Australian agricultural land.

13F   Australian agricultural land trust estates

             (1)  For the purposes of this Act, a trust estate is an Australian agricultural land trust estate if it is a unit trust estate and the value of so much of its total assets as consists of interests in Australian agricultural land exceeds 50% of the value of its total assets.

             (2)  Where a reasonable value of the particular assets or of the total assets of a trust estate is given in a valuation, that value shall be taken to be their value at a particular time for the purposes of subsection (1) if:

                     (a)  the person giving the valuation was at the time of the valuation a suitably qualified valuer acting at arm’s length in relation to the valuation;

                     (b)  the valuation was made not more than 12 months before the particular time; and

                     (c)  the value of those assets had not increased significantly between the time of the valuation and the particular time.

5  After section 21A

Insert:

21B   Acquisitions of interests in Australian agricultural land

             (1)  In this section and in section 21C:

foreign person means:

                     (a)  a foreign corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or

                     (b)  a foreign corporation in which 2 or more persons, each of whom is a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.

             (2)  Where the Treasurer is satisfied that:

                     (a)  a foreign person proposes to acquire an interest in Australian agricultural land which is greater than 5 hectares in area; and

                     (b)  the proposed acquisition would be contrary to the national interest;

the Treasurer may make an order prohibiting the proposed acquisition.

             (3)  Where the Treasurer makes such an order in relation to an interest in Australian agricultural land, he or she may also make an order in relation to:

                     (a)  a specified foreign person; or

                     (b)  a specified foreign person and specified associates, or the persons included in a specified class of associates, of that person;

directing that that person shall not, or none of those persons shall, whether alone or together with any other or others of them, acquire:

                     (c) any interest in the land or other thing concerned; or

                     (d)  any such interest except to a specified extent.

             (4)  Where a foreign person has acquired an interest in Australian agricultural land and the Treasurer is satisfied that the acquisition is contrary to the national interest, the Treasurer may make an order directing the foreign person to dispose of that interest within a specified period to any person or persons approved in writing by the Treasurer.

             (5)  Before the end of the period specified in the order or of that period as extended under this subsection, the Treasurer may, by writing signed by the Treasurer, extend or further extend that period or that period as so extended, and in that event the order has effect as if the period as so extended or further extended had been specified in the order.

             (6)  For the purposes of subsection (4), but without limiting the generality of that subsection:

                     (a)  a foreign person shall be taken to have acquired an interest in Australian agricultural land if the person becomes, with or without the knowledge of the person, a beneficiary in a trust estate (other than a deceased estate) that consists of or includes an interest in Australian agricultural land; and

                     (b)  where paragraph (a) applies and the trust estate is a discretionary trust estate—a reference to the disposal of the interest of the foreign person is a reference to the disposal of such assignable benefits in relation to that trust estate as may ultimately vest in that foreign person.

             (7)  The Treasurer shall not refuse to approve a person for the purposes of subsection (4) unless the Treasurer is satisfied that the person is a foreign person and that it would be contrary to the national interest for that person to acquire the interest concerned.

21C   The national interest—acquisitions of interests in Australian agricultural land

             (1)  In determining whether the acquisition of an interest in Australian agricultural land is contrary to the national interest for the purposes of section 21B, the Treasurer must have regard to the following matters:

                     (a)  national security issues, including Australia’s ability to protect its strategic and security interests;

                     (b)  any impact on competition and global industy or market outcomes;

                     (c)  any impact on Australian tax revenues;

                     (d)  any impact on the Australian economy or the community, including:

                              (i)  whether the acquisition will, or is likely to, benefit Australia (or any part of it or group of Australians);

                             (ii)  whether the acquisition will, or is likely to, result in:

                                        (A)  the creation of new job opportunities in Australia or the retention of existing jobs in Australia that would or might otherwise be lost; or

                                        (B)  the introduction into Australia of new technology or business skills; or

                                        (C)  increased export receipts for Australia exporters; or

                                        (D)  added market competition, greater efficiency or productivity, or enhanced domestic services, in Australia; or

                                         (E)  the introduction into Australia of additional investment for development purposes; or

                                         (F)  increased processing in Australia of Australia's primary products;

                            (iii)  whether Australia’s economic interests are adequately safeguarded and promoted, including looking at issues of aggregation and vertical integration;

                            (iv)  any relevant mitigating factors, such as whether an Australian head office will be established or Australian directors appointed to an entity seeking to invest;

                     (e)  the character of the investor, including:

                              (i)  whether the foreign person has business experience and acumen relevant to the acquisition;

                             (ii)  whether the foreign person has demonstrated financial commitment to the acquisition;

                            (iii)  whether the foreign person is of good character.

21D  Information about acquisitions of interests in Australian agricultural land

             (1)  The Treasurer must publish on the Treasury website, within 7 days of receiving a notice under section 26B, details of the agreement to which that notice relates, including the following:

                     (a)  details identifying the person intending to enter into the agreement, and the country of residence or place of business of the person;

                     (b)  the amount of the investment proposed under the agreement;

                     (c)  the sector of the agricultural industry to which the interest in agricultural land relates;

                     (d)  any other details prescribed by the regulations.

             (2)  The Treasurer must publish on the Treasury website each week while any notice referred to in subsection (1) is under consideration by the Treasurer, updated information about the status of that notice and about any decision the Treasurer makes about the notice.

6  Section 22

Omit “or 21A(2)”, substitute “, 21A(2) or 21B(2)”.

7  Section 23

After “21A”, insert “, 21B”.

8  Section 24

Omit “or 21A(3) or (4)”, substitute “, 21A(3) or (4), or 21B(3) or (4)”.

9  Subsection 25(1A)

Omit “or 21A(2)”, substitute “, 21A(2) or 21B(2)”.

10  Subsection 25(1D)

Omit “or 21A(4)”, substitute “, 21A(4) or 21B(4)”.

11  After section 26A

Insert:

26B   Compulsory notification of certain section 21B transactions

             (1)  In this section, person to whom this section applies means:

                     (a)  a natural person not ordinarily resident in Australia;

                     (b)  a corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest;

                     (c)  a corporation in which 2 or more persons, each of whom is a natural person not ordinarily resident in Australia or a foreign corporation hold an aggregate substantial interest;

                     (d)  the trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or

                     (e)  the trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.

             (2)  Where a person to whom this section applies:

                     (a)  enters into an agreement by virtue of which he or she acquires an interest in Australian agricultural land and did not, before entering into the agreement, furnish to the Treasurer a notice stating his or her intention to enter into that agreement; or

                     (b)  having furnished a notice to the Treasurer stating his or her intention to enter into an agreement by virtue of which he or she is to acquire an interest in Australian agricultural land, enters into that agreement before:

                              (i)  the end of 40 days after the day on which the notice was received by the Treasurer; or

                             (ii)  the day on which advice is given that the Commonwealth Government does not object to the person entering into that agreement (whether or not the advice is subject to conditions imposed under subsection 25(1A));

                            whichever first occurs;

the person is guilty of an offence and is punishable, on conviction, by a fine not exceeding 500 penalty units or imprisonment for a period not exceeding 2 years, or both.

             (3)  Where:

                     (a)  a person enters into an agreement by virtue of which he or she acquires an interest in Australian agricultural land; and

                     (b)  the provisions of the agreement that relate to the acquisition of the interest do not become binding until the fulfilment of a condition or conditions set out in the agreement;

the person shall not be taken, for the purposes of subsection (2), to have entered into the agreement until the time when those provisions become binding.

             (4)  Without affecting the operation of section 25, this section does not apply to an acquisition of an interest in Australian agricultural land if:

                     (a)  that interest is an interest in a share in a corporation; and

                     (b)  the acquisition occurs because of a shareholder subscribing for shares in the corporation; and

                     (c)  the shares were subscribed for in pursuance of a resolution by the corporation or the directors of the corporation agreeing to make available a number of shares specified in, or ascertained in accordance with, the resolution for allotment to persons who were registered as the holders of shares in the corporation on a day specified in the resolution; and

                     (d)  the proportion of the total shares made available for allotment represented by the shares for which the shareholder so subscribed is as near as practicable to the proportion of the issued shares in the corporation, immediately before the day specified in the resolution, that were held by the shareholder immediately before that day.

             (5)  For the purposes of subsection (4), it is immaterial that the shares in the corporation comprise 2 or more classes of shares to which different rights are attached.

12  Section 27

Omit “or 26A”, substitute “, 26A or 26B”.

13  After subsection 35(4A)

Insert:

          (4B)  The orders that may be made under subsection (1) in relation to the acquisition of an interest in Australian agricultural land include, but are not limited to:

                     (a)  an order restraining the exercise of any rights attached to any interest held by the offender in the land or other thing concerned;

                     (b)  an order prohibiting or deferring the payment of any sums due to the offender in respect of any such interest held by the offender;

                     (c)  an order directing the disposal of any such interest held by the offender; and

                     (d)  an order that any exercise of rights attached to any such interest held by the offender be disregarded.

14  Subsection 35(4)

Omit “and (4A)”, substitute “, (4A) and (4B)”.