1. Who are the investment authorities in Australia?

The foreign investment policy decision-making body is the Department of the Treasury (The Treasury).

The Foreign Investment Review Board (FIRB) is responsible for foreign investment approvals.

The Treasurer, or his or her delegate, has the authority to review an investment application, in consultation with security, tax and other authorities, to determine whether the application is contrary to Australia’s national interest.

On the basis of the FIRB’s recommendations, the Treasurer may reject an investment application or impose conditions on the transaction.

2. What are notifiable actions?

In 2020, Australia introduced the Foreign Investment Reform (Protecting Australia’s National Security) Regulations 2020 (Cth) (the Regulations) as a key reform to create a national security review system. The Regulations amend the Foreign Acquisitions and Takeovers Regulation 2015 (the Principal Regulation) to further implement reforms, based on a new national security test, to strengthen the integrity of the foreign investment framework, make a series of technical changes, reintroduce the monetary thresholds and simplify the treatment of less sensitive types of investment.

The Regulations introduces a range of new concepts and behavioural norms, gives greater powers to the Treasurer, and provides for civil and criminal penalties. It also introduces the concept of “notifiable national security actions” which identifies two types of actions that may pose a national security risk:

• one being the acquisition of national security land interests, and
• the other being the acquisition of direct interests in national security business.

Both actions, regardless of their size and value, require the approval of the Treasurer.

3. In what circumstances, does a foreign investor need to submit an application?

According to the Regulations, foreign investors are required to submit an application to the Treasurer before engaging in certain transactions known as “notifiable actions” or “notifiable national security actions”. Generally, foreign investors should seek professional legal advice if they are unsure whether their proposed transaction is a “notifiable action” or “notifiable national security action”. If a foreign investor fails to file an application for a proposed transaction that is required to be notified to the Treasurer, they may be subject to penalties. In such cases, the foreign investor will be at risk of an injunction or disposal order.

4. The latest data on the approval status

From 1 July 2022, The Treasury publishes quarterly reports on the regulation of foreign investment in Australia, detailing key data on the operation of Australia’s foreign investment regulatory framework. The most recent available quarterly report is from 1 July to 30 September 2023. The report shows that during that quarter:

• the number of approved business investment proposals was 283, with a total value of $49.5 billion;
• 98 investment proposals were withdrawn during the quarter; and
• no prohibition orders were issued.

The report also shows that, the top four sources of commercial foreign investment in Australia are respectively:

• the United States ($31.3 billion);
• France ($4.7 billion);
• Canada ($2 billion); and
• China ($1.6 billion).