United Nations Climate Change
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On 20 August 2015, the Australian government introduced three bills (Bills) into Parliament to amend the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA). The changes are proposed to take effect on 1 December 2015 and will result in all substantive provisions in the FATA being repealed and replaced.
The key changes to the FATA include:
The definition of “foreign person” is central to the FATA as the Act only applies to the acquisition of interests in Australian entities, businesses or assets by foreign persons. The main changes to the definition of “foreign person” under the Bills are:
Other sections of the “foreign person” definition are largely unchanged, including retaining the aggregate substantial interest threshold of at least 40% where two or more “foreign persons” are the holders.
The proposed amendments to the FATA categorise transactions which are subject to Australia’s foreign investment framework into two broad groups:
Various thresholds will apply to both significant actions and notifiable actions which will be set out in the regulations to the FATA.
Although notification of significant actions is not mandatory under the revised FATA, it is expected that (as with the practice under the existing FATA) most foreign persons will choose to notify the Treasurer voluntarily because they will want the certainty offered by a “no objection” response which generally prevents the Treasurer from making a disposal order, especially in connection with a significant transaction.
The proposed changes to the FATA introduce a new concept of “Australian land”, which captures the existing “Australian rural land” concept and expands on the existing “Australian urban land” concept. Australian land now means agricultural land, commercial land, residential land or a mining or production tenement. These types of land are not intended to be mutually exclusive, so an area of land could fall under several types of Australian land.
The acquisition of an interest in Australian land is a significant action and also a notifiable action which enlivens the powers of the Treasurer to make orders under the FATA. An interest in Australian land is broadly defined, and includes:
Agricultural land is defined under the Bills as land in Australia that is used, or could reasonably be used, for a primary production business within Australia’s taxation laws. This includes land which is partially used for a primary production business, or land where only part of the land could reasonably be used for a primary production business.
The acquisition of an interest in Australian land (including agricultural land) also captures the acquisition of any interest in the shares of an agricultural land corporation, which will be defined in the regulations and is expected to include any corporation where the value of its eligible agricultural land assets exceeds 50% of the value of its total assets.
The Australian government now requires all foreign persons to notify the Australian Taxation Office (ATO) of existing interests in agricultural land before 31 December 2015. Foreign persons are required to notify new acquisitions of interests in agricultural land to the ATO within 30 days.
A mining or production tenement is defined under the Bills as a right under a law of the Commonwealth, a State or a Territory to recover minerals, oil or gas in Australia (including offshore). It includes a right to preserve such a right (eg retention titles), but does not include a right to recover minerals, oil or gas for the purposes of prospecting or exploring for minerals, oil or gas. Minerals includes coal or ore.
This definition reverts to the position under earlier versions of the Policy where only the acquisition of an interest in producing tenements or licences required notification.
No fees or charges are currently payable when making an application or giving a notice under the FATA.
Under the new regime, a fee must be paid in respect of a notice or application:
The proposed fees for giving notice of notifiable actions are set out in the table below.
|When is the fee applicable?||Amount of the fee|
To acquire an interest in residential land or agricultural land
Consideration for the acquisition
(capped at $100,000 for agricultural land)
|To acquire an interest in commercial land (other than commercial land that is vacant)||$25,000|
|To acquire an interest in commercial land that is vacant||$10,000|
|To acquire an interest in a mining or production tenement||$25,000|
|To take a notifiable action prescribed by regulations made for the purposes of section 48 of FATA (ie specified actions which are prescribed by the regulations as notifiable actions)||The amount not exceeding $100,000, that is prescribed by regulations, or worked out using the method prescribed by regulations|
The Treasurer may waive or remit the whole or part of a fee that is payable if the Treasurer is satisfied that it is not contrary to the national interest to do so.
The Bills introduce civil penalties and stronger criminal penalties for serious offences, as well as providing for the issue of infringement notices for less serious offences under the FATA.
Under the Bills, a person may be liable if the person:
The maximum penalty for the most serious offences in the FATA will increase to:
The Bills also introduce a number of new civil penalty provisions and an infringement notices regime, which relate mainly to residential land.
As mentioned, the regulations will set out various thresholds for both significant actions and notifiable actions. We expect that they will be comparable to the current relevant monetary thresholds for non-government foreign investors, which are summarised in the table below.
|Investment type||Nationality of the investor||Monetary threshold|
|Australian business –|
US, NZ, Chile, Korea, Japan
|Australian business –|
|Australian business –agriculture|
US, NZ, Chile
$0 for new dwellings
Generally prohibited for existing dwellings except the Foreign Investment Review Board may allow temporary residents to buy one established dwelling for use as their residence in Australia.
US, NZ, Chile, Korea, Japan
|Mining or production tenement||All||$0|
US, NZ, Chile
$15 million cumulative
* Not yet in effect, likely to be introduced on 1 December 2015.
IMO 2020 is almost upon us. Readers are well aware of the impending switch to 0.5 percent fuel mandated by Annex VI of MARPOL which will cause an anticipated drop in HSFO demand, the potential hazards of new untested LSFO blends, the concerns around scrubber operations, the debate over open loop versus closed loop, and the myriad of other risks associated with the impending regulatory change.