Title Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Bill 2020
Database Explanatory Memoranda
Date 14-04-2020 11:31 AM
Source House of Reps
System Id legislation/ems/r6503_ems_2e302f6c-098e-4bd8-bdee-fc5d67d02cc6


Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Bill 2020

2019 -2020

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Bill 2020

 

 

 

 

EXPLANATORY MEMORANDUM

and

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

 

 

 

Circulated by the authority of

Bob Katter MP


Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Bill 2020

 

OUTLINE

The object of this bill is to keep under the ownership and control of the people of Australia assets that are vital for the functioning of the economy and the development of our productive resources, as well as those that are vital to our defensive capabilities. 

 

The bill achieves this through preventing foreign persons or entities from acquiring a 10 per cent or greater interest in Australian land, water or other assets that are either of “strategic economic importance” or “strategic defensive importance” to Australia.   An interest in Australian land will include, inter alia, both substantive leases and sales.

 

The determination of whether an asset is of “strategic economic importance” or “strategic defensive importance” is to be determined by the Foreign Ownership Assessment Board (FOAB), a new Board the composition of which is to be determined by a majority of the Senate.

 

Any determination by the FOAB can be appealed to a Tribunal, where if a party to the proceeding is not represented by a lawyer then no other party to the proceeding may be represented by a lawyer.  The Tribunal’s decision can be appealed to a Court of law.

 

If an asset is determined or accepted to be of “strategic economic importance” or “strategic defensive importance” to Australia and its proposed acquisition is of greater than 10 per cent, then that interest cannot be acquired by a foreign person or entity.  However, up to a 45 per cent interest in the asset can be acquired by a foreign person or entity if both Houses of Parliament pass a resolution by at least a two thirds majority.

 

 

FINANCIAL IMPACT

The Bill will require the establishment of a new body, the Foreign Ownership Assessment Board, to be paid out of normal budget supply.

 

 

STATEMENT ON COMPATIBILITY WITH HUMAN RIGHTS

 

The Statement of Compatibility with Human Rights appears at the end of this Explanatory Memorandum.

 

 

NOTES ON CLAUSES

Clause 1 – Short title
This clause provides for the Act, when enacted, to be cited as the Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Act 2020.

 

Clause 2 – Commencement

This clause provides for the Act to commence on the later of;

(a)    the day after it receives Royal Assent; or

(b)      the day the Consolidated Revenue Fund is appropriated under an Act to the Department in which this Act is administered for payment to the Foreign Ownership Assessment Board.

Clause 3 — Schedule

This clause provides for the amendment of the Foreign Acquisitions and Takeovers Act 1975 in accordance with the items set out in the Schedule.

 

Schedule 1 — Amendments

 

Foreign Acquisitions and Takeovers Act 1975

 

Item 1 — After Section 2 insert:

 

2A Ban on acquisition of assets of strategic economic importance or strategic defensive importance to Australia

 

Subsection (1) provides that a foreign person cannot acquire a 10 per cent or greater interest in Australian land, water or other assets that are of strategic economic significance or strategic defence significance to Australia.

 

Subsection (2) provides that Subsection (1) does not apply in relation to an acquisition if:

(a)   each House of the Parliament, following notice of a motion given in that House, passes a resolution by at least a two‑thirds majority authorising the acquisition; and

(b)   the acquisition is for no more than 45 per cent of the interest in the Australian land, water or other asset.

 

Subsection (3) provides that the regulations must provide for:

(a)   the establishment of a Foreign Ownership Assessment Board (FOAB) to determine whether an asset is of strategic economic importance or strategic defensive importance to Australia for the purposes of subsection (1);

(b)   the FOAB to constitute a Board chosen by a majority of the Senate of Australia; and

(c)   any determination of the FOAB to be reviewable by an appeals tribunal.

 

Subsection (4) provides that if any party to an appeal against the decision of the FOAB chooses not to be represented by a lawyer (however described), then no other party to the proceedings may be represented by a lawyer.

 

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Foreign Acquisitions and Takeovers Amendment (Strategic Assets) Bill 2015

 

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

 

 

Overview of the Bill

 

The object of this bill is to keep under the ownership and control of the people of Australia assets that are vital for the functioning of the economy and the development of our productive resources, as well as those that are vital to our defensive capabilities. 

 

The bill achieves this through the protection of assets from acquisition by foreign entities that are either of “strategic economic importance” or “strategic defensive importance” to Australia.

 

Human rights implications

 

This Bill does not unacceptably limit any of the applicable rights or freedoms.

 

Conclusion

 

This Bill is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Hon Bob Katter MP