Back in October 2020, we highlighted the Australia’s Foreign Relations (State and Territory Arrangements) Bill 2020 and summarised how it would impact governments and other bodies such as public universities, including some of the practical considerations that might need to be considered in dealing with foreign government entities.

By way of update, the bill progressed quickly through Parliament and survived relatively unscathed despite from some vocal criticism from opposition parties, resulting in the Australia’s Foreign Relations (State and Territory Arrangements) Act 2020 (the Foreign Relations Act) which came into effect on 10 December 2020.

The Foreign Relations Act is expected to have far reaching consequences for state and local governments and other government entities, including public universities, and is likely to influence how those bodies contract with certain foreign entities going forward. Of particular note are the powers granted to the Foreign Affairs Minister to:

  • prohibit government entities from negotiating or entering into arrangements caught by the Foreign Relations Act with certain foreign entities; or
  • declare as invalid and unenforceable, not in operation, or to vary or terminate any arrangements that are inconsistent with Australia’s foreign policies or arrangements that adversely affect Australia’s foreign relations.

These powers extend to arrangements that are legally binding under Australian or foreign laws, as well as arrangements that are not legally binding. ‘Subsidiary arrangements’ are also caught by the Foreign Relations Act.

The clock is already ticking!

For those public sector bodies caught by the Foreign Relations Act, the most pressing exercise is to comply with the broad disclosure requirements regarding existing foreign arrangements.

To summarise:

  • ‘core State/Territory entities’ (being a State or Territory and their respective Departments and agencies) are required to notify the Foreign Affairs Minister of pre-existing foreign arrangements by no later than 10 March 2021; and
  • pre-existing ‘non-core foreign arrangements’ (being existing foreign arrangements entered into by a public university or other designated public body) are required to be disclosed to the Foreign Affairs Minister by no later than 10 June 2021.

Any new arrangements proposed to be entered into on and from 10 March 2021 also now need to be approved or notified (as appropriate).

A failure to meet the meet the minimum notification requirements can result in the arrangement being declared invalid and unenforceable, or having to be varied or terminated, or ceasing to be in operation (depending on the nature of the arrangement).

Whether an arrangement with a foreign entity is caught by the Foreign Relations Act will need to be considered on a case by case basis.

Should you require any assistance with navigating the scope of the Foreign Relations Act or would welcome a more detailed discussion regarding its application to your business, please contact any of our team below.


Australian Chair and Global Co-Head of Restructuring

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