The first tranche of the proposed reforms to Australia’s foreign investment regulation regime has been released, with the Government advising that it expects that the overwhelming majority of investments will not be called in for review.
The Bill and Draft Regulations are part of what is set to be the most comprehensive reforms to Australia’s foreign investment review framework in more than 20 years.
Of interest to the life sciences sector, the Bill has introduced a new category of actions called ‘notifiable national security actions’, which must be notified to FIRB regardless of the value of the investment.
Legal advisory firm, Hall and Wilcox said, “The breadth of the ‘national security business’ definition will likely capture hospitals that provide health services to the Australian Defence Force (‘ADF’), primary health carers with ADF health records and their suppliers including IT, pharmaceutical and medical devices suppliers that may hold personal information of defence or intelligence personnel.”
The second tranche of the exposure draft legislation is due out in September. Largely focusing on technical amendments, it is also expected to include:
- the reinstatement of monetary screening thresholds
- exemptions for certain investments made by entities which are currently classified as ‘Foreign Government Investors’ where no foreign government investor has or could be perceived to have influence or control over the investment or operational decisions of the entity or any of its underlying assets.
A FIRB app has been designed by Hall & Willcox to help foreign investors, investees and advisors determine whether Foreign Investment Review Board approval is required before a proposed transaction or acquisition is implemented. The app is updated as the FIRB rules and requirements change (including during COVID-19).
The exposure drafts of the Foreign Investment Reform (Protecting Australia’s National Security) Bill 2020 (Bill) and Foreign Investment Reform (Protecting Australia’s National Security) (National Security Business) Regulations 2020 (Draft Regulations) are available here. If adopted, these changes are set to commence on 1 January 2021.