2020 saw a continuing trend of increased foreign investment regulation right across the globe. Many nations are placing an increasing emphasis on national sovereignty and seek to protect their country’s assets, people and general well-being from a range of threats including geo-political, military, food security, data security and security of energy supplies and key infrastructure. All of these matters heightened a general trend of increased regulation of foreign investment.
Of course, none of this was new in 2020.
However, the general trend collided with the COVID-19 pandemic in 2020 and its threat to life, social well-being, economic well-being, businesses and supply chains.
The collision intensified the increased regulation of foreign investment, in particular, in Australia. This had a seismic impact on the number of foreign acquisition proposals and their success rates. Midway through 2020, the government announced that Foreign Acquisitions and Takeovers Act 1975 (FATA) would receive a significant overhaul. The centrepiece of which was the introduction (effective 1 January 2021) of new regulated actions and new powers on the part of the Treasurer relating to national security risks. While the zero monetary threshold was scrapped as of 1 January 2021 and the thresholds returned to the usual levels, the changes to the law and FIRB focus mean ongoing scrutiny of foreign investment transactions will continue to be intense.
Getting the Deal Through - Foreign Investment Review provides an overview of Australian governments’ powers to control and block foreign investment. It covers:
an overview of law and policy towards oversight of foreign investment
powers of the regulators to intervene on national interest grounds and threshold issues
procedure: notification and filing submissions, timelines for clearance, regulatory guidance, lobbying
assessment: tests for clearance, interagency and international consultation, remedies and appeals