Bills Digest no. 52 2015–16
PDF version [810KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Paula Pyburne
Law and Bills Digest Section
23 November 2015
Contents
The
Bills Digest at a glance
Purpose of the Bills
History of the Bills
Structure of the Bills
Background
Committee consideration
Policy position of non-government parties
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions—Schedule 1
Schedule 2
Schedule 3
Schedule 4
Fees Imposition Bill
Date introduced: 20
August 2015
House: House of
Representatives
Portfolio: Treasury
Commencement: various
days detailed in the body of this Bills Digest.
Links: The links to the Bills, their
Explanatory Memoranda and second reading speeches can be found on the Bills’
home pages for the Foreign
Acquisitions and Takeovers Legislation Amendment Bill 2015 and the Foreign
Acquisitions and Takeovers Fees Imposition Bill 2015 can be found on the Bills’
home pages or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The Foreign Acquisitions and
Takeovers Legislation Amendment Bill 2015 repeals and replaces all but sections
1 and 2 of the existing Foreign Acquisitions and Takeovers Act 1975.
That being the case, the Amendment Bill represents a complete rewrite of the Foreign
Acquisitions and Takeovers Act. Much of the Amendment Bill is a plain
English version of the existing law.
The key changes in the Amendment Bill operate to:
- incorporate the existing rules relating to foreign government investors
and acquisitions of interests in land which are currently set out in Australia’s
Foreign Investment Policy into the Foreign
Acquisitions and Takeovers Act to give them legislative force
- increase the substantial interest threshold which
triggers the requirement to give notice of the acquisition to the Treasurer
from 15 per cent to 20 per cent. This will align with the threshold set out in
Australia’s corporate
takeover rules in section 606 of the Corporations Act 2001
- simplify the structure of the Foreign Acquisitions and
Takeovers Act so that relevant transactions are broadly
grouped into two categories: significant actions which are
subject to voluntary notifications, and notifiable actions which
are subject to mandatory notifications
- extend the current rules which require prior approval for acquisitions
of interests in Australian urban land to all land in Australia,
including agricultural land, unless an exemption applies
- introduce civil penalties and stronger criminal penalties for serious
offences, as well as providing for the issue of infringement notices for less
serious offences and
- introduce fees for applications under the Foreign
Acquisitions and Takeovers Act.
The Foreign Acquisitions and Takeovers Fees Imposition
Bill 2015 complements the Amendment Bill by setting the amounts of fees which
are payable in respect of various categories of application.
The purpose of the Foreign Acquisitions and Takeovers
Legislation Amendment Bill 2015 (the Amendment Bill) is to repeal and replace
all but two provisions of the Foreign Acquisitions and Takeovers Act 1975[1]
(FATA). The purpose of the Foreign Acquisitions and Takeovers Fees
Imposition Bill 2015 (the Fees Imposition Bill) is to impose fees on all
foreign investment applications.
The Bills are part of a package of Bills which is intended
to strengthen Australia’s foreign investment framework and which also includes
the Register of Foreign Ownership of Agricultural Land Bill 2015[2]
(Register Bill).
At the time of writing this Bills Digest, all of the Bills
in the package had been passed by the House of Representatives.[3]
In addition, both the Fees Imposition Bill and the
Register of Foreign Ownership of Agricultural Land Bill 2015 had been passed by
the Senate with no amendments.[4]
However, the Amendment Bill has been the subject of some
debate in the Senate and amendments have been proposed by representatives of
the non-government and minor parties.[5]
The Amendment Bill consists of four Schedules:
- Schedule
1 contains the rewritten FATA comprising the following parts:
- Part
1: sets out preliminary matters including all of the relevant definitions
- Part
2: identifies the conduct which constitutes significant action
and notifiable action
- Part
3: contains the powers of the Treasurer in the event that significant
action has been taken
- Part
4: requires a foreign person who proposes to take a notifiable action to give
notice to the Treasurer before doing so
- Part
5: sets out the offences and civil penalties that arise if a provision of the FATA
is contravened. In many cases this is done by applying the Regulatory Powers
(Standard Provisions) Act 2014[6]
(Regulatory Powers Act) which is discussed below
- Part
6: contains provisions about the fees that are payable under the FATA
- Part
7: relates to record-keeping and confidentiality of information
- Part
8: contains relevant miscellaneous provisions
- Schedule
2 contains amendments to the FATA which are contingent on the
commencement of the Acts and Instruments (Framework Reform) Act 2015[7]
- Schedule
3 sets out various application and transitional provisions and
- Schedule
4 amends confidentiality provisions in the Anti-Money Laundering and
Counter-Terrorism Financing Act 2006,[8]
the Income Tax Assessment Act 1997[9]
and the Taxation Administration Act 1953.[10]
The Fees Imposition Bill comprises three Parts:
- Part
1 sets out preliminary matters
- Part
2 imposes the fees which are payable under Part 6 of the Amendment Bill and
- Part
3 contains a regulation making power.
Current foreign investment
framework
Australia’s foreign investment review framework consists of
the FATA, its associated Regulations,[11]
and Australia’s Foreign Investment Policy (the Policy).[12]
The Policy is based on the premise that ‘the Government welcomes foreign
investment. It has helped build Australia’s economy and will continue to
enhance the wellbeing of Australians by supporting economic growth and
prosperity’.[13]
The FATA provides the legislative framework to
review foreign investment proposals and provides the Treasurer with a range of
powers, including the ability to order divestments of assets, to block proposals,
or to apply conditions to proposals to ensure that they are not contrary to Australia’s
national interest.
How the Policy operates
Assessing the national interest
The Policy sets out the matters which are broadly considered
in assessing the national interest for business acquisitions including
national security, competition and other Government policies such as taxation;
the impact on the economy and the community; and the investor’s character.
Where a proposal involves a foreign government investor, the Government also
considers the commerciality of the investment.[14]
Policy for agricultural investments
For agricultural investments there are additional
factors that are typically considered when assessing foreign investment
proposals against the national interest such as:
- the
quality and availability of Australia’s agricultural resources, including water
- land
access and use
- agricultural
production and productivity
- Australia’s
capacity to remain a reliable supplier of agricultural production, both to the
Australian community and our trading partners
- biodiversity
and
- employment
and prosperity in Australia’s local and regional communities.[15]
Policy for residential real estate
The foreign investment policy in relation to residential
real estate aims to ensure that any foreign investment increases Australia’s
housing stock. The policy operates as follows:
- applications
by foreign persons to procure new dwellings are approved without conditions—as
this type of investment increases Australia’s housing stock
- temporary
residents can apply to purchase an established dwelling to use as a residence
while they live in Australia. The purchase of an established dwelling is
conditional on the foreign person selling the property within three months of
leaving Australia.
It is a requirement that each proposed acquisition of real
estate be individually notified by the foreign person and reviewed by the
Foreign Investment Review Board (FIRB).
Advanced off-the-plan certificate
The requirement for individual purchases to be approved by
the FIRB does not apply to property developers (whether the developer is an Australian
or a foreign developer). Instead property developers can apply for an advanced off‑the‑plan
certificate (called exemption certificates in the Amendment Bill)
to sell all new dwellings in a development of 100 or more dwellings to foreign
persons. However, in that case the developer is required to market the development
locally as well as overseas. Foreign persons purchasing dwellings in a
certified development do not require separate approval.
The FIRB, a non-statutory advisory body, is responsible
for examining proposals and advising on the national interest implications of investment
proposals. The Treasurer retains responsibility for making decisions.
House of Representatives
inquiry
In March 2014, it was reported that Credit
Suisse had estimated that:
... Chinese investors are snapping up 18 per cent of all new
apartments and houses in Sydney and 14 per cent in Melbourne.
In Brisbane, an estimated 7 per cent of new apartments are
bought by Chinese investors. The figures do not include the purchase of
existing homes by foreign buyers. The report predicted growing overseas demand
was good news for local building suppliers, construction jobs and developers, but
likely to drive property prices even higher.[16]
The perception that there was a high level of foreign
investment in the Australian residential real estate market gave rise to fears
that first home buyers may be locked out.[17]
Subsequently, the Treasurer, Joe Hockey, referred concerns about foreign
investment in residential real estate to the House of Representatives Standing
Committee on Economics (House Economics Committee) for inquiry.[18]
The House Economics Committee, which was chaired by Kelly
O’Dwyer received 92 submissions[19]
and made 12 recommendations.[20]
The report by the House Economics Committee, although directed only at foreign
investment in real estate, is comprehensive. Many of its recommendations have
been adopted in the Bill.[21]
The House Economics Committee received evidence as to the
amount of investment which the FIRB had approved, which is set out in
the table below.
Table 1: FIRB approved investment in real estate, $
million (includes residential and commercial properties)
Country
|
2012-13
|
2011-12
|
2010-11
|
2009-10
|
2008-09
|
2007-08
|
USA
|
4406 (3)
|
8162 (1)
|
3404 (3)
|
3369 (1)
|
-
|
11998 (1)
|
UK
|
1671 (5)
|
3783 (4)
|
4610 (1)
|
2264 (3)
|
-
|
4430 (3)
|
China
|
5932 (4)
|
4187 (3)
|
4093 (2)
|
2421 (2)
|
-
|
1491 (5)
|
Singapore
|
2008 (1)
|
5705 (2)
|
1487
|
2113 (4)
|
-
|
1779 (4)
|
UAE
|
885
|
-
|
1088
|
11
|
-
|
4712 (2)
|
Germany
|
769
|
1020
|
1128
|
1247 (5)
|
-
|
1289
|
Malaysia
|
1600
|
1791
|
1863 (4)
|
612
|
-
|
268
|
Canada
|
4926 (2)
|
2457 (5)
|
807
|
375
|
-
|
590
|
Netherlands
|
229
|
-
|
1691 (5)
|
936
|
-
|
1452
|
South Africa
|
953
|
1736
|
826
|
497
|
-
|
433
|
South Korea
|
903
|
443
|
497
|
1165
|
-
|
1153
|
Japan
|
895
|
1743
|
598
|
368
|
-
|
275
|
Hong Kong
|
649
|
777
|
404
|
404
|
-
|
463
|
Switzerland
|
346
|
523
|
455
|
497
|
-
|
407
|
Sweden
|
-
|
-
|
-
|
397
|
-
|
1011
|
New Zealand
|
644
|
864
|
64
|
45
|
-
|
274
|
France
|
100
|
426
|
45
|
34
|
-
|
51
|
India
|
-
|
148
|
163
|
53
|
-
|
144
|
Russia
|
-
|
47
|
245
|
-
|
-
|
88
|
Thailand
|
-
|
34
|
13
|
-
|
-
|
-
|
Others
|
10541
|
13494
|
12280
|
2762
|
8500
|
10454
|
Source: Standing Committee on Economics, Report
on foreign Investment in residential real estate, House of
Representatives, Canberra, November 2014, p. 45, accessed 26 October 2015.
However, the House Economics Committee identified that
there was a lack of timely and accurate data on foreign investments in
residential real estate so that the information in the table may not be a
correct reflection of the true position—that is, some approvals may not have
led to an actual purchase and some purchases may not have been through the
approval process. It considered that the consequences of this lack of accurate data
include:
- an
inability to determine the real number and value of these investments
- difficulty
in assessing economic and social benefits such as the contribution to housing
supply
- difficulty
in ascertaining levels of non-compliance with the regulatory framework
- potential
eroding of public confidence in the value of foreign investment in the housing
market and
- inadequacy
of the evidence base upon which policy makers can make informed choices.[22]
Policy announcement
In February 2015, the Government announced its
intention that the Australian Taxation Office (ATO) would take responsibility
for both approving foreign investment in residential real estate and administering
a new register of foreign investment in agricultural land.[23] In a further media
release on 2 May 2015, the Government formally announced its proposed reforms
to strengthen Australia’s foreign investment framework, including that:
- the ATO will immediately commence compliance activities to ensure
foreign investors who have invested in Australian residential property are
meeting their obligations under the FATA
- from 1 July 2015, the ATO will be responsible for
a register related to foreign ownership of agricultural land
- from 1 December 2015, the ATO will be responsible for the collection of
fees in relation to all foreign investment applications
- from 1 December 2015, the ATO will be responsible for administering all
aspects of the FATA in relation to residential real estate (including
the screening of applications) and
- from 1 July 2016, the ATO will also be responsible for a register
related to foreign ownership of residential real estate.[24]
The package of Bills implements the measures
in that announcement.
Consultation
Consistent with the announcement, on 18 May
2015 the Government published an options paper to canvas views on ways to
modernise the foreign investment framework such as:
- incorporating policy only notification and prior approval requirements
under Australia's foreign investment policy into the legislative framework
- updating the legislation to reflect current administrative practices
and regulatory concepts, as well as for modern business and corporate finance
practices
- exempting proposals that are unlikely to affect the national interest
and increase the consistency of exemptions across the different acquisition
types and
- amending the legislation so that it applies irrespective of the
transaction structuring (for example, moving from shares to securities,
inclusive of units in trusts, and providing similar outcomes whether a direct
or indirect acquisition).[25]
Twenty-two submissions were received in
response to the options paper, seven of which were published.[26]
In July 2015, Treasury issued an exposure
draft of the proposed legislation.[27]
The Amendment Bill is in broadly equivalent terms to exposure draft.
Senate Economics Committee
On 20 August 2015, the package of Bills was referred to the Senate
Economics Legislation Committee (Senate Economics Committee) for inquiry and
report.[28]
The Senate Economics Committee, which was chaired by Liberal Party Senator,
Sean Edwards, received only 12 submissions, some of which were copies of
earlier submissions to the Treasury consultation.
The report of the Senate Economics Committee was published
in October 2015.[29]
The majority of the Economics Committee recommended that the Bills be passed.[30]
However the Labor Senators dissented from that view, recommending instead that
the Government separate the three Bills. In that event:
- the
Register Bill should be passed without amendment
- the
Fees Imposition Bill should be amended to establish a more consistent, simpler
and streamlined approach to fees and
- the
Government should further consult with industry, and commission a broader
evaluation of the proposed changes, before seeking further passage of this Bill
and the Fees Imposition Bill.[31]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
(Scrutiny of Bills Committee) commented on the absence of merits review or
review under the Administrative Decisions (Judicial Review) Act 1977[32](the
ADJR Act)—although judicial review remains available under the Judiciary
Act 1903.[33]
The Scrutiny of Bills Committee noted the rationale for that
absence in the Explanatory Memorandum. That is:
The Bill does not provide for the review of decisions on
their merits because the decisions under the Act involve complex questions of
government policy that can have broad ranging implications for persons other
than those immediately affected by the decision. For example, when making a
decision under the Act it may be proper for the Treasurer to take into account
a broad range of factors, including national security, competition, Australian
Government policies (including tax), impacts on the economy and the community,
and character of the foreign investor. It is therefore not appropriate for
decisions that have such a high political content to be subject to merits
review. The provision of merits review might also result in applicants being
less willing to provide sensitive information which is relevant to the decision
if they believe there is a risk that such information may be disclosed during
such proceedings.[34]
Whilst the Scrutiny of Bills Committee did not necessarily
agree that the availability of judicial review under section 39B of the Judiciary
Act 1903 was a sufficient reason to exclude decisions from review under the
ADJR Act, it decided to leave the question of the appropriateness of
merits review and review under the ADJR Act to the Senate as a whole.[35]
The Scrutiny of Bills Committee also commented on a number
of other elements of the Bill, which are discussed below under ‘Key issues and
provisions’.
As stated above, Labor gave qualified support to the package
of Bills. In relation to the imposition of fees, Gary Gray stated:
In this year's budget, the government announced $735 million
in new application fees for foreign investors. I think this is a terrific idea.
It is a good idea to make that charge. It is a good idea to make that charge on
the entities that will be using the Foreign Investment Review Board, and it is
the right way to go about placing that charge on such investors.[36]
The Australian Greens (the Greens) state that part of
their policy on foreign ownership of land includes legislating ‘a stronger
national interest test to be applied by the Foreign Investment Review Board for
purchases of agricultural land and water resources’.[37]
The position of major interest groups are canvassed in the
Key issues and provisions section of this Bills Digest.
According to the Explanatory Memorandum, the package of Bills
is expected to result in a $667.2 million increase to consolidated revenue
over four years. The introduction of application fees on foreign
investment applications from 1 December 2015 is estimated to raise
$735.0 million in revenue over the forward estimates period.[38]
The 2015‑16 Budget included additional funding for
the Treasury ($19.7 million over four years), the Australian Taxation
Office ($47.5 million over four years) and the Department of
Agriculture ($0.6 million over four years) to support additional
screening and compliance activities associated with the reforms.[39]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[40]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights (the
Human Rights Committee) determined that none of the Bills in the package of
Bills required additional comment as they ‘promote human rights or contain justifiable
limitations on human rights’.[41]
The amendments in Schedule 1 to the Amendment Bill commence
on 1 December 2015.
Part 1—preliminary matters
Part 1 of the Bill contains relevant definitions and
explanations. Importantly, for the purposes of the FATA, the definition
of foreign person is expanded to include a foreign
government or any other person, or any other person that meets the
conditions, prescribed by the regulations.[42]
The main changes to the definition of foreign
person under the Amendment Bill are:
- that foreign person now captures Australian citizens who
are not ordinarily resident in Australia[43]
- that an Australian entity will now be deemed to be a foreign
person if a foreign individual, foreign corporation or foreign
government holds a substantial interest—that is, a 20 per cent
interest in the entity (this is an increase from 15 per cent.)[44] and
- the inclusion of a new foreign government definition. An
entity will be a foreign government if it is a body politic of a foreign
country, being an entity established by, and acting on behalf of, the state of
a foreign country.[45]
Key issue—foreign person includes a
foreign government
Whilst the Financial Institute of Australia (FINSIA) states
that it ‘affirms the importance of national security concerns’, it also makes
the point that its consultation with its members identified that ‘automatically
subjecting investments from state-owned enterprises to FIRB review may
potentially be prohibitive of critical foreign investment’.[46]
FINSIA notes that:
... in the period 2006–2012, [state-owned enterprises]
accounted for 94% of total inbound Chinese [foreign direct investment] in
Australia (when measured by value). Additionally,
the paper found that foreign [state-owned enterprises] are for the most part
commercially driven, profit-seeking firms that compete with other [state-owned
enterprises] and private firms, with no substantive evidence to indicate that [state-owned
enterprises] engage in non-commercial or strategic behaviour to advance the
interests of their respective governments.[47]
However, it should be noted that the Policy already
contains rules about foreign government investors and the Amendment Bill merely
gives these legislative force.[48]
Regulations providing for
exemptions
Existing section 39 of the FATA contains a broad
power to make regulations which are necessary or convenient to be prescribed
for carrying out or giving effect to the Act. Proposed section 37
contains a power to make regulations that provide that the FATA, or
specified provisions of the FATA, do not apply to:
- acquisitions
of the kind or in the circumstances prescribed by the regulations
- interests
of the kind or in the circumstances prescribed by the regulations
- Australian
businesses of the kind or in the circumstances prescribed by the regulations or
- foreign
persons of the kind or in the circumstances prescribed by the regulations.
In the absence of any commentary in the Explanatory
Memorandum about the reason for this power the Scrutiny of Bills Committee
sought advice from the Minister.[49]
The Minister provided the following explanation:
Exemptions from certain requirements in the Act are currently
included in both the Act and the Foreign Acquisitions and Takeovers Regulation
1989. In response to feedback from some stakeholders that the legislative
scheme as a whole would be easier to navigate if all exemptions were included
in a single location, it was decided that all exemptions would be included in
the regulations to be made under the Act. The decision to include all the
exemptions in the regulations rather than the Bill has helped to minimise the
complexity of the Bill. This also assists with ensuring Australia’s compliance
with complex commitments made in trade agreements.[50]
The Scrutiny of Bills Committee has drawn the attention of
the Senate to the provision as it considers that important exemptions to
legislative schemes should be provided for in the primary legislation itself,
rather than allowing these exemptions to be determined by the executive in
regulations. It stated:
While a desire to reduce the complexity of the primary
legislation is commendable, the committee does not consider that this is, of
itself, sufficient justification for significantly reducing Parliamentary
scrutiny by providing for important matters to be included in regulations.[51]
Part 2—significant action and notifiable
action
Part 2 of the Bill introduces two new concepts; significant
action and notifiable action.
The Bill sets out separate meanings of significant
action in respect of entities[52]
(which includes an agribusiness[53]),
businesses and land.[54]
Significant actions are subject to voluntary notifications, whereas
notifiable actions are subject to mandatory notifications. Notification
to, or approval by, the Treasurer of significant actions is voluntary unless
the action is also a notifiable action.
Test for significant action
The Bill details the conditions to be satisfied in
determining whether an action is a significant action. The Bill
contains specific elements in similar terms which are relevant to entities,[55]
businesses,[56]
land[57]
and actions which are prescribed by regulations.[58]
Steps in the test
In relation to an entity, first the action has to
be of the required kind. Examples of the kinds of action which enliven the new
provisions of the FATA are acquiring interests in securities,[59]
entering into an agreement that results in a change of control of an entity[60]
or acquiring a direct interest in an Australian agribusiness.[61]
The second condition is that the threshold test is
met. Proposed section 51 of the FATA sets out the threshold test
for entities and businesses in table form. Essentially the test is based on a
monetary value which will be calculated in each case based on the nature and
extent of the acquisition. The threshold test for land is met if the land is of
the kind which is prescribed in the regulations. If the land is agricultural
land, the threshold test will be met if the value is more than the value
prescribed by the regulations.[62]
(Whilst the Government has circulated draft regulations, the final form of the
regulations has not been tabled in the Parliament.[63])
The third condition is that the entity is one of
the kinds of entities to which the FATA applies. That is, depending on
the nature of the acquisition, the entity is a corporation which carries on an
Australian business, an Australian unit trust or is a holding entity of an
Australian unit trust.[64]
The final condition is that there would be, or has
been, a change in control of the entity as a result of the action.[65]
The exception is where the action is to acquire a direct interest in an
Australian entity that is an agribusiness. In that case the final condition is
that the action is taken by a foreign person.[66]
Part 3 of the FATA (which is discussed below) sets
out the powers of the Treasurer to prohibit a significant action that is
proposed to be taken from being taken and to order that a significant action be
undone if it has been taken.
Test for notifiable action
Types of action
For an action to be a notifiable action it
must fall into the categories of action which are set out in proposed
section 47 of the FATA.
The first type of action is to acquire a direct
interest in an Australian entity or Australian business that is an agribusiness.[67]
The term direct interest is to be prescribed in regulations.[68]
The exposure draft regulations provide that a direct interest in
an entity or business is an interest of at least 10 per cent in the entity or
business; an interest of at least five per cent if the person who acquires the
interest has entered a legal arrangement relating to the business; or an
interest of any percentage in the entity or business if the person who acquired
the interest is in a position to influence or participate in the central
management and control of the entity or business or to determine its policy.[69]
Similarly, what constitutes an agribusiness
is to be set out in the regulations.[70]
Proposed section 22 of the exposure draft Regulations sets out in table
form those Australian entities and Australian businesses which will be
classified as an agribusiness. Broadly speaking, an Australian
entity or Australian business is an agribusiness if it uses assets in carrying
on a business in specified classes of the ANZSIC Codes[71]
and the value of those assets exceeds 25 per cent of the value of the total
assets of the business.[72]
The ANZSIC Codes are defined in the exposure draft of the Foreign Acquisitions
and Takeovers Regulations which specifies that:
(3) The
business must be carried on wholly or partly in any of the following classes of
the Australian and New Zealand Standard Industrial Classification Codes:
(a) any of the classes in Division A
(agriculture, forestry and fishing);
(b) any
of the classes in Subdivision 11 of Division C (food product manufacturing),
other than any of the following:
(i) class 1113 (cured meat
and smallgoods manufacturing);
(ii) class 1132 (ice cream
manufacturing);
(iii) class 1162 (cereal,
pasta and baking mix manufacturing);
(iv) a class in group 117
(bakery product manufacturing);
(v) class 1182
(confectionery manufacturing);
(vi) a class in group 119
(other food product manufacturing).[73]
The second type of action is to acquire a substantial
interest in an Australian entity.[74]
A person holds a substantial interest in an entity if the person holds an
interest of at least 20 per cent.[75]
The third type of action is to acquire an interest
in Australian land, being a legal or equitable interest in Australian land, but
does not include:
- an
interest under a lease or licence or in a unit in a unit trust
- an
interest in an agreement giving a right (called a profit à prendre) to take
something off another person’s land, or to take something out of the soil of
that land
- an
interest in an agreement involving the sharing of profits or income from the
use of, or dealings in, Australian land.[76]
Threshold test
The action is a notifiable action only if
the entity, business or land meets the
threshold test which is set out in proposed sections 51 and 52 of
the FATA which is the same threshold test as is used to determine
whether an action is a significant action.[77]
Kinds of entities
The third test is that the entity in which the direct
interest, or the substantial interest, is taken is an
Australian corporation (or a holding entity of the corporation) that carries on
an Australian business, whether alone or together with one or more other
persons, or an Australian unit trust (or a holding entity of the unit trust).[78]
Taken by a foreign person
The final test is that the action is, or is to be, taken
by a foreign person.[79]
A notifiable action is different from a significant action
because there does not need to be a change in control.
Part 4 of the FATA (which is discussed below) sets
out the requirement that a person who proposes to take a notifiable
action must give notice to the Treasurer before taking the action.
Key issue—lack of clarity about
agribusiness
As stated above, an action to acquire a direct
interest in an Australian entity or Australian business that is an agribusiness
is a notifiable action. The difficulty is that the relevant definition of
agribusiness is in draft Regulations, rather than the Amendment Bill itself
(although this may be amended in the Senate). According to one commentator:
The ongoing sensitivity to foreign government
investment in the agricultural sector has resulted in a difficult approach to
ascertaining whether an acquisition is notifiable ...
Whilst there is finally a definition of agribusiness,
an operation need only have 25% of its assets or earnings before interest and
tax made up of primary production activities ... to be an agribusiness. There
will be practical difficulties when ascertaining whether this threshold is met—most
businesses do not report such a break up of activities. With agribusiness
having a lower threshold (currently $55 million) and with the higher penalties
for non-compliance, investors will need to be careful when making acquisitions
in targets that have agri sector connections.[80]
According to the Australian Food and Grocery Council:
Prior to the 2013 election, the Coalition made a commitment
to lower the threshold for Foreign Investment Review Board scrutiny to $55
million for agribusiness... The expansion of the definition of ‘agribusiness’
beyond the agricultural sector (Division A of the ANZSIC Code) to include
‘first stage processing’ represents a departure from this election commitment.
Given the integrated nature of food processing companies, who undertake both
first stage and advanced manufacturing processes in the food sector, this
‘scope creep’ is of serious concern for the food sector.
In the absence of a clearly articulated public policy
objective the additional regulatory burden on food processing has not been
justified. Furthermore, if the proposed changes are about transparency in
relation to sensitive sectors then alternative approaches should first be
considered rather than the blunt instrument of applying these legislated
changes to more than half of Australia’s food manufacturing sector.[81]
Exemption certificates
An exemption certificate is a certificate
given by the Treasurer that specifies an interest or an interest of a kind
that, if acquired by a foreign person, does not give rise to a significant
action or a notifiable action. The certificate may
specify conditions that are required to be complied with.[82]
The Amendment Bill provides for three types of
exemption certificates:
- for
new dwellings, that is a dwelling that will be, is being, or has
been built on residential land and that has not been previously sold as a
dwelling and either has not been previously occupied, or if the dwelling is contained
in a development which was sold by its developer, has not been previously
occupied for more than 12 months in total[83]
- for
foreign persons who propose to acquire one or more kinds of interests in
Australian land[84]
and
- for
established dwellings, being a dwelling on residential land that
is not a new dwelling.[85]
In each case, the Treasurer must be satisfied that the
acquisition of the interest by the foreign person is not contrary to the
national interest.[86]
The effect of these amendments is to move provisions from the current Foreign
Acquisitions and Takeovers Regulations into the FATA.[87]
Part 3—powers of the Treasurer
Part 3 of the Amendment Bill contains the powers of the
Treasurer if a significant action is proposed to be taken, or has
been taken. The powers are not significantly different from those which already
reside in the FATA.[88]
However the Bill sets them out in table form to provide the nexus between the
relevant action and the orders that the Treasurer may make in respect of the
action.
Proposed actions
Essentially, where a significant action that
would be contrary to the national interest is proposed to be taken, the
Treasurer may make an order prohibiting the action either in whole or in part.[89]
In addition, the Treasurer is empowered to make interim orders for a specified
period of not more than 90 days for the purpose of making an order prohibiting
a person from taking significant action.[90]
Actions that have been taken
Where the Treasurer is satisfied that significant
action, the result of which is not in the national interest, has been
taken he, or she, may make one of two orders. The first is an order that, within
a specified period, the person dispose of the interest that has been acquired.[91]
The second is an order that the person refrain from doing
specified acts of a specified kind.[92]
In that case, the purpose of the order must be to restore the control of the
entity or business as closely as possible to the position in which it was
before the significant action was taken or to prevent the occurrence of a
change in control of the entity or business.[93]
The Treasurer may vary an order which has been made under proposed sections
68 and 69 of the FATA provided that doing so is not contrary to the
national interest, the person consents to the variation and the Treasurer is
satisfied that the variation does not disadvantage the person.[94]
No objections notifications
The Bill provides that the Treasurer may, in relation to certain
significant actions, decide not to object to the action and give the person a no
objection notification which imposes no conditions on the acquisition.
In that case the no objection notification must be given to the
person before the end of 10 days after the date of the decision.[95]
In the alternative, the Treasurer may give a person a no
objection notification which imposes conditions or which varies or
revokes existing conditions (provided that any variation of a condition is not
contrary to the national interest).[96]
The effect of giving a no objection notification
is that, where any conditions or time limits have been imposed in respect of
the no objection notification, the Treasurer is not able to make
a disposal order in relation to the action. The exceptions to this general rule
are any of the following:
- the
person is convicted of an offence because a condition included in the
notification was contravened (section 87 of the FATA applies) or an
order is made under section 19B of the Crimes Act 1914 in respect of the
offence or
- a
civil penalty order is made against the person under the Regulatory Powers
Act for a contravention relating to a condition included in the
notification (sections 93, 96 or 97 of the FATA apply).[97]
Time limits
Under the Amendment Bill, the Treasurer must make
decisions in relation to orders, interim orders and no objection notifications within
the decision period—that is, within 30 days after the day the
Treasurer receives a notice from a person stating that a significant action is proposed
to be taken, or such longer period as the Treasurer has agreed to in writing.[98]
Key issue—the nature of the
national interest
Currently, the FATA takes a flexible approach to
this test and does not prescribe what constitutes the national interest. The
same approach is replicated in the Amendment Bill. According to the Explanatory
Memorandum to the Amendment Bill:
The question of whether a particular investment is contrary
to the national interest is a matter for the Treasurer.
While each proposal is considered on a case-by-case basis, the factors that are
typically considered by the Treasurer when considering any non-residential
proposal include the impact of the proposed
investment on Australia‘s national security, the economy and the community,
competition, other Government policies (including taxation), and the character
of the investor.[99]
However, FINSIA expressed its concerned that the
national interest test confers on the Treasurer ‘a largely unbounded discretion’
that ‘allows the politicisation of the approval of foreign investment
transactions’.[100]
It argues that the omission of a prescribed national interest test in the
Amendment Bill:
... has the potential to send a strong signal to foreign
investors that the Australian foreign investment regulatory regime is arbitrary
and overly restrictive, while being driven by politically determined
requirements as opposed to the rule of law. Indeed, the OECD regards Australia
as having a more restrictive foreign investment regulatory regime relative to
the OECD average, as well as comparable economies including the United States
and the United Kingdom.[101]
Part 4—giving notice to the Treasurer
Part 4 of the FATA requires a foreign person who
proposes to take a notifiable action to give a notice to the
Treasurer before taking the action.[102]
Part 5 of the FATA (which is discussed below) sets out the offences and
civil penalties which arise from a failure to comply with the requirement to
give notice under Part 4. A notice has no effect if it is not given in the
manner and form which is approved, in writing by the Secretary.[103]
Limitation on taking significant
action
The FATA sets out the time limits which apply to a
foreign person who notifies the Treasurer that he, or she, proposes to take a
significant action (including a significant action that it a notifiable action).[104]
In that case, the foreign person must not take the action before the earliest
of:
- the
day that is 10 days after the end of the decision period[105]
- if
an interim order is made—the end of the period specified in the order
- the
day a no objection notification is given to the person.[106]
Part 5—offences and civil penalties
Part 5 of the FATA sets out the circumstances that
give rise to a criminal offence and the circumstances in which a person
contravenes a civil penalty provision.
Offences
A person commits an offence in the following
circumstances:
- the
person is a foreign person who takes an action which is a notifiable action and
a compulsory notice of a notifiable action has not been given in relation to
the action before it is taken[107]
- the
person is a foreign person who gives a notice to the Treasurer stating that a
significant action is proposed to be taken, the person takes the action before
the end of the limitation period (set out in proposed section 82) and a
change in control has occurred in relation to an action which is a significant
action[108]
- the
person engages in conduct which contravenes an order made by the Treasurer[109]
- the
person engages in conduct which contravenes a condition which has been included
in a no objection notification imposing conditions or an exemption
certificate which includes a condition.[110]
A person (the developer) commits an offence
if he, or she, disposes of an interest in a dwelling to a foreign person
without advertising the dwelling in Australia, contrary to a condition in an exemption
certificate given in relation to an interest in Australian land requiring
the sale of the dwelling to be advertised in Australia.[111]
In each of the offences outlined, the penalty for a person
is imprisonment for three years, or 750 penalty units, or both.[112]
However, if a body corporate is found guilty of any of the offences, subsection
4B(3) of the Crimes Act allows a court to impose a fine equivalent to
3,750 penalty units—that is, five times higher than the penalty that can be
imposed on a natural person.[113]
Civil penalties
The Bill contains three separate circumstances that
give rise to civil penalties. The first is that a person has contravened
an order which has been made by the Treasurer under Part 3.[114]
The maximum penalty is 250 penalty units.[115]
However, under paragraph 82(5)(a) of the Regulatory Powers Act the
maximum pecuniary penalty that can be imposed on a body corporate that
contravenes the provision is 1,250 penalty units.[116]
The second is about actions that are not in
relation to residential land.[117]
In that case, civil penalties arise where:
- a
foreign person fails to give a notice to the Treasurer of a proposed notifiable
action before taking the action[118]
- a
foreign person who proposes to take a significant action takes
the action before the end of the limitation period set—that is, 10 days after
the decision period,[119]
the end of any period specified in an order or the day that a no objection
certificate is given to the person[120]
- a
person who is given a no objection notification contravenes a condition
specified in the notification[121]
- a
person who is specified in an exemption certificate contravenes a condition of the
certificate.[122]
In each of the above circumstances the maximum penalty is 250
penalty units.[123]
The third circumstance is about actions that are
in relation to residential land. They fall into the following categories:
- where
a foreign person acquires residential land without providing the requisite
notification.[124]
In that case the maximum penalty for the contravention is the greater of, 10
per cent of the consideration for the residential land
acquisition, or 10 per cent of the market value of the interest in the relevant
residential land[125]
- where
a foreign person who is a temporary resident holds an interest in more than one
established dwelling at the same time[126]
or a foreign person who is a not temporary resident holds an interest in an
established dwelling[127]
- where
a person who is given a no objection notification relating to a
residential land acquisition contravenes a condition that is set out in the
notification or where a person contravenes a condition of an exemption
certificate[128]
The maximum penalty for either of those contraventions is the
amount of the capital gain that was made, or would be made, on the disposal of
the interest;[129]
or 25 per cent of the consideration for the acquisition of that interest;[130]
or 25 per cent of the market value of that interest—whichever is the greatest[131]
and
- where
a person contravenes conditions in a no objection notification that
require the person to notify the Treasurer when the person acquires or disposes
of an interest in residential land, or to advertise the sale of a dwelling in
Australia.[132]
In that case, the maximum penalty is 250 penalty units.[133]
Key issue—extent of penalties
According to Hickey Lawyers:
Wide-reaching powers (and especially the threat of criminal
sanctions) could ultimately result in the reduction of development and the
subsequent reduction in job creation. The introduction of criminal sanctions
clearly sends a negative message that foreign investment is so fraught with
danger that, unless done strictly within the confines of the regime, it is a
criminal act.[134]
However, the Government has signalled its determination
that penalties should apply stating:
Consistent with the recommendations of the House Economics
Committee, the Bill introduces a range of new and stricter penalties that are
commensurate with the severity of the breach and ensure that those who break
the rules do not profit by their actions.
Criminal penalties will be increased from $90,000 to $135,000
for individuals and will be supplemented by civil pecuniary penalties and
infringement notices for less serious breaches of the residential real estate
rules.
Third parties such as real estate agents, migration agents,
conveyancers and lawyers who knowingly assist a foreign investor to breach the
rules will also now be subject to both civil and criminal penalties.[135]
Operation of the Regulatory Powers
Act
The Regulatory Powers Act provides for a framework
of standard regulatory powers exercised by agencies across the Commonwealth. It
reflects the Guide to Framing Commonwealth Offences, Infringements Notices
and Enforcement Powers[136]
and applies to regulatory schemes which trigger its provisions through primary legislation.[137]
Each civil penalty provision under the FATA is
enforceable under Part 4 of the Regulatory Powers Act.[138]
In addition, the Treasurer is an authorised applicant for the purposes of the Regulatory
Powers Act.[139]
Part 4 of the Regulatory Powers Act operates so
that a provision of the FATA will be an enforceable civil
penalty provision[140]
and the Treasurer may apply to a relevant court[141]—within
four years of the alleged contravention—for an order that a person pay the
Commonwealth a pecuniary penalty.[142]
Where the court is satisfied that the person has contravened the civil penalty
provision, it may order the person to pay to the Commonwealth a pecuniary
penalty.[143]
A pecuniary penalty is a debt payable to the Commonwealth and is recoverable as
a judgement debt.[144]
Those civil penalties that relate to residential land
(proposed subsections 94–97) are subject to an infringement notice under Part 5
of the Regulatory Powers Act.[145]
The Secretary may appoint a person who holds (or performs the duties of) an APS
6 or higher position within the ATO as an infringement officer for
the purposes of the Regulatory Powers Act. The Secretary is the relevant
chief executive.[146]
Part 5 of the Regulatory Powers Act operates so
that an infringement notice may be given if the infringement officer believes
on reasonable grounds that a person has contravened a provision which is subject
to an infringement notice. An infringement notice must be given within 12
months after the day on which the contravention is alleged to have taken place.[147]
The required contents of an infringement notice are set out in detail in the Regulatory
Powers Act and include:
-
the maximum penalty that a court could impose if the provision
were contravened and
-
the time and day of, and the place of, the alleged contravention.[148]
The Regulatory Powers Act also sets out the manner
in which the maximum penalty for an alleged contravention of an infringement
notice provision is to be calculated.[149]
The above provisions of the Regulatory Powers Act do
not apply to the civil penalty provisions in relation to residential land
(proposed subsections 94–97).[150]
Instead, the FATA provides for a two-tiered infringement notice regime.[151]
An infringement notice is a tier 1 infringement
notice if it relates to an alleged contravention by a person of a civil penalty provision and the person notified
the Commonwealth of conduct that was the same, or substantially the same, as
the conduct alleged in the notice and that notification occurred before an
infringement notice was issued. The penalty for a tier 1 infringement
notice is 12 penalty units for an individual and 60 penalty units for a
corporation.[152]
An infringement notice is a tier 2 infringement
notice if it relates to an alleged contravention by a person of a civil penalty provision and it is not a tier
1 infringement notice. The penalty for a tier 2 infringement
notice is 60 penalty units for an individual and 300 penalty units
for a corporation.
Liability of officers of corporations
The FATA provides that an officer of
an entity includes, but is not limited to, the following:
- the
director of a corporation
- the
trustee of a unit trust
- a
person who is in a position to determine the investments or policy of the
entity or a trustee of the entity
- a
person who makes decisions that affect the whole, or a substantial part of, the
business of the entity
- a
person who has the capacity to affect significantly the financial standing of
the entity
- an
administrator under a deed of company arrangement executed by the entity and
- a
liquidator of the entity appointed in a voluntary winding up.[153]
An officer of a corporation commits an offence if the
corporation is convicted of an offence under the FATA and the person
authorised or permitted the commission of the offence by the corporation.[154]
Similarly, an officer of a corporation may be liable to a civil penalty in
respect of a corporation if the officer authorised or permitted the
contravention of a civil penalty provision by the corporation.[155]
Recovering unpaid penalties
If a court finds that a person has contravened a civil
penalty provision and a pecuniary penalty is imposed, the penalty is a debt
that is due and payable to the Commonwealth.[156]
Under the FATA, the Treasurer may, in specified circumstances, declare
that a charge applies on the Australian land in which the person has an
interest. The purpose of the charge is to secure the payment of the penalty.[157]
In that case, the charge has priority over any other interest in the land—even
if another charge, such as a mortgage, has been registered on a land register.[158]
A declaration made by the Treasurer must specify the period during which the
declaration is in force and the land to which it applies.[159]
According to the Explanatory Memorandum to the Bill the
rationale for these provisions is that ‘where pecuniary penalties are ordered
against a foreign person, recovery of debts will be difficult if the person is
not in, or has few assets in Australia’. The declaration of charge ‘seeks to
minimise the risk that proceeds are not available for payment of penalties’.[160]
To this end, the charge is not affected by any change in ownership of the land.[161]
How the charge works
Essentially the imposition of a charge on Australian land[162]
operates as follows:
- the
charge is created when the civil penalty is imposed or the Treasurer makes a
declaration[163]
- the
charge remains in force until the penalty and any costs incurred by the
Commonwealth are paid or the interest in land is disposed of by the Treasurer[164]
- at
the end of three months (or a longer term determined by the Treasurer), the
interest in the Australian land vests in the Commonwealth in equity[165]
- the
Treasurer then executes all necessary documents to comply with the registration
requirements of the relevant state or territory in which the Australian land is
located.[166]
Once this has occurred, the interest in the Australian land vests in the
Commonwealth at law
- the
Treasurer must take action to dispose of the interest in Australian land when the
time allowed for lodging an appeal against the decision that a person has
contravened a civil penalty provision has elapsed[167]
or, where an appeal has been lodged, disposal may take place at the time that
the appeal lapses or is determined.[168]
An exception to the general rule that a charge is created
over a person’s interest in Australian land is where a restraining order or
forfeiture order under Parts 2-1 and 2-2 of the Proceeds of Crime Act 2002
respectively are in force.[169]
Part 6—fees
Part 6 of the Amendment Bill sets out the circumstances in
which fees are payable.[170]
The amounts of the fees are set out in Part 2 of the Fees Imposition Bill which
is discussed later in this Bills Digest. Fees are to be paid before the
Treasurer exercises his, or her, powers.[171]
However, the Treasurer may waive or remit the whole or part of a fee if it is
not contrary to the public interest to do so.[172]
Part 7—record-keeping and
confidentiality of information
A person must make records of the acts, transactions,
events or circumstances relating to:
- the
taking of a significant action, a notifiable action
or an action that is specified in an exemption certificate[173]
- complying
with a condition in a no objection notification or an exemption
certificate[174]
and
- the
disposal of an interest in residential land.[175]
An offence of strict liability arises where a person who
is required to make and keep records, fails to do so.[176]
The maximum penalty is a fine not exceeding 30 penalty units.[177]
The Bill provides that information which is obtained under,
or in accordance with, the FATA (with some specified exceptions[178])
is protected information.[179]
The Bill sets out the circumstances in which disclosure of protected
information is authorised—for example, to specified Commonwealth Ministers and
Commonwealth entities.[180]
A person commits an offence if the person obtains information that is protected
information and makes a record of the information, discloses or
otherwise uses it in the making of the record, and the disclosure or the use of
the information was not authorised. The maximum penalty is imprisonment for two
years or 120 penalty units, or both.[181]
The offence does not apply to a person who makes a record of, discloses or
otherwise uses protected information in performing his, or her,
functions or duties or in exercising his, or her, powers under the FATA if
the person does so in good faith.[182]
Part 8—miscellaneous provisions
Part 8 contains miscellaneous provisions which build on
Part III of the existing FATA.
Treasurer’s power to obtain
information
The Treasurer may, by notice in writing given to the
person, require the person to give or to produce documents to the Treasurer, or
his delegate.[183]
The impetus for the giving of the notice is that the Treasurer has reason to
believe that the person can give the information or produce the specified
documents.
A person who has been given a notice commits an offence if
the person fails to comply with it. The penalty is imprisonment for six months
or 30 penalty units, or both.[184]
However, a person who fails to comply with the relevant notice does not commit
an offence if the person complies with the notice to the extent to which the
person is capable of complying with it. A defendant bears an evidential burden
in relation to this defence.[185]
Importantly, a person is not excused from giving
information or producing a document on the ground that doing so may tend to
incriminate her or him.[186]
The Scrutiny of Bills Committee drew attention to this provision and noted the
comments in the Explanatory Memorandum that:
The removal of the privilege, subject to a use or derivative
use immunity, assists the Treasurer and the Commissioner to monitor and enforce
compliance with this Act and thereby assist in the effective administration of
this Act. That is in circumstances where information may be held offshore and
information necessary to administer the Act may not otherwise be available. The
effective administration of this Act is vital to ensuring that the Australian
public continues to have confidence in the way foreign investment is regulated
in Australia.[187]
Regulation making power
The Governor-General is empowered to make regulations
about matters that are required or permitted by the FATA or are
necessary or convenient to be prescribed for carrying out or giving effect to
the FATA.[188]
There is a specific power for the regulations to deal with
a matter by applying, adopting or incorporating, with or without modification,
any matter contained in any other instrument or other writing as in force or
existing from time to time.[189]
This provision overrides subsection 14(2) of the Legislative Instruments Act
2003.[190]
The Scrutiny of Bills Committee, whilst noting that the
Explanatory Memorandum contained useful examples of how this provision may
operate, considered that the drafting of the subsection did not limit its use
to the examples provided. That being the case, the Scrutiny of Bills Committee
preferred that the provision either explicitly be restricted to those examples,
or that the provision include a requirement for free and public access to any
incorporated material.[191]
The provisions in Schedule 2 to the Amendment Bill
commence immediately after the commencement of Schedule 1 to the Acts and
Instruments (Framework Reform) Act 2015.[192]
That Act received Royal Assent on 5 March 2015 and commences on the
earlier of a single day to be fixed by Proclamation or 5 March 2016.
The Acts and Instruments (Framework Reform) Act
amends the Legislative Instruments Act to establish:
... a new category of instruments called notifiable
instruments, which will be able to be registered in authoritative form. The new
category of notifiable instruments is designed to encompass instruments that
are not appropriate to register as legislative instruments, but for which
public accessibility and centralised management is desirable.
Notifiable instruments will be published in a register known
as the Federal Register of Legislation, which will also incorporate the
existing Acts database established under the Acts Publication Act 1905 and
the existing Federal Register of Legislative Instruments. [193]
The amendments in Schedule 2 to the Amendment Bill will be
required once the Acts and Instruments (Framework Reform) Act commences.
The amendments in Schedule 3 to the Amendment Bill commence
on 1 December 2015.
Schedule 3 to the Amendment Bill contains application and
transitional provisions. Item 1 of Schedule 3 contains relevant
definitions, including transitional period which means the period
beginning on 1 March 2015 and ending on 30 November 2015. Items 2 and 3
of Schedule 3 to the Amendment Bill provide that certain notices given under
old sections of the FATA or by the Treasurer under the Policy before the
commencement of the Amendment Bill or during the transitional period are deemed
to have been made under the FATA as amended by the Bill.
The amendments in Schedule 4 to the Amendment Bill apply to
the confidentiality provisions of the Anti-Money Laundering and
Counter-Terrorism Financing Act 2006,[194]
the Income Tax Assessment Act 1997[195]
and the Taxation Administration Act 1953[196]
(TA Act). The amendments in Schedule 4 to the Bill commence on
1 December 2015.
In particular, the amendments to the TA Act insert proposed
Division 354—Power to obtain information about rights or interests in property into
Schedule 1 of that Act. The Bill empowers the Commissioner, by notice in
writing, to require a person to provide information about a property right
or interest—that is, a legal or equitable interest in the property or a
right, power or privilege in connection with the property whether the interest
is present or future and whether vested or contingent.[197]
The notice must specify the property to which the notice applies, the
information required, the period within which the information is to be given
and the manner of giving the information.[198]
The period specified in the notice must be at least 14 days after the notice is
given—unless the Commissioner is satisfied that a shorter period is necessary.[199]
Comments by the Scrutiny of Bills
Committee
The Scrutiny of Bills Committee noted that under new
Division 354, a person who fails to comply with a notice to give information
under proposed subsection 354-5(1) of Schedule 1 to the TA Act
may be guilty of an offence against subsection 8C(1) of that Act. However, the
effect of subsection 8C(1B) is that a person does not commit an offence to the
extent to which the person is not capable of complying with the obligation. A
defendant bears an evidential burden in relation to this matter.
The Scrutiny of Bills Committee noted that the use of the
reverse onus of proof was justified in the Explanatory Memorandum on the basis
that it ‘is appropriate because generally only the defendant will know the
reason why she or he will was (sic) unable to fully comply with the notice’.
That being the case, ‘to the extent this provision might be considered to limit
the presumption of innocence the limitation is reasonable in all the
circumstances’.[200]
The main protection for taxpayer confidentiality is
contained in Subdivision 355-B of the TA Act. It is an offence for
taxation officers to disclose tax information that identifies an entity, or is
reasonably capable of being used to identify an entity, except in certain
specified circumstances. However, there are exceptions to that general rule. In
particular section 355-55 of the TA Act allows for specified disclosure
to Ministers and section 355-65 allows for disclosures for other government
purposes. Items 4–8 of Schedule 4 amend those sections to accommodate
the altered foreign investment framework. In addition, item 9 repeals
and replaces section 355-75 of Schedule 1 of the TA Act to allow limited
disclosure to courts and tribunals for the purposes of the FATA.
Commencement
Sections 1–4 commence on Royal Assent. Sections 5–13
commence on the later of the day after Royal Assent or the commencement of
Schedule 1 to the Foreign Acquisitions and Takeovers Legislation Amendment
Act 2015. However, the provisions do not commence if the Foreign
Acquisitions and Takeovers Legislation Amendment Act 2015 does not
commence.
Key provisions
The Fees Imposition Bill provides that the fees that are
payable under Part 6 of the FATA (as amended) are imposed as a tax.[201]
The fees payable for applications for exemption certificates
are based on whether the exemption certificate is for new dwellings ($25,000),
established dwellings ($5,000 if the consideration for the acquisition is
$1,000,000 or less—otherwise worked out by a statutory formula[202]),
land ($25,000 if the consideration for the acquisition is $1 billion or less—otherwise
$100,000) or whether the relevant certificate is one of an additional kind of
certificate provided for by regulations (not more than $25,000).[203]
The fee for a variation of an exemption certificate is $5,000.
A fee is payable for giving a notice of a notifiable action.
The amount of the fee varies depending on whether the notifiable action relates
to the acquisition of, for instance, an agribusiness (($25,000 if the
consideration for the acquisition is $1 billion or less—otherwise $100,000), an
interest in residential land or agricultural land (($5,000 if the consideration
for the acquisition is $1,000,000 or less—otherwise worked out by a statutory
formula[204]),
commercial land ($10,000 if the land is vacant, otherwise $25,000) or a mining
tenement ($25,000).
Where one agreement covers more than one action for which a
fee is payable, then:
- in
relation to each acquisition of an interest in residential land covered by the
agreement a separate fee is payable
- in
relation to any additional acquisitions other than in residential land covered
by the agreement the fee is the highest fee payable in respect of those acquisitions.[205]
The Fees Imposition Bill provides that regulations may set
lower fees than those that are specified.[206]
This may be by way of setting a new amount or by changing the statutory formula
for some fees.[207]
The amount of fees, whether as specified in the Fees
Imposition Bill or in subsequent regulations, is to be indexed annually in
accordance with the formula which is set out in the Bill.[208]
Item 10 of Schedule 3 to the Amendment Bill provides that indexation
applies for each financial year starting on or after 1 July 2016.
Key issue—amount of the fees
Currently the FIRB does not charge fees. That being the
case, the fees that are to be imposed are a significant departure from the
current position. Whilst all stakeholders seem to be in favour of charging a
fee, some would prefer if they were lower than those which are proposed[209]
and that they were subject to the Australian
Government’s Charging Framework.[210]
According to the Australian Financial Markets Association:
The proposed fees will act as a tax on foreign investment,
albeit a small one. It should be noted that the effective incidence of the
proposed fees will fall on both foreign investors and the resident vendors of
domestic assets. As the Henry review
observed, foreign direct investment has a particularly high elasticity with
respect to tax rates given the international mobility of foreign capital and
the discretionary nature of foreign investors’ exposure to Australian
regulation. The application fees would also amplify the deterrent effect
arising from uncertainty in relation to the Treasurer’s discretion to reject
applications or impose conditions on approvals on effectively open-ended
‘national interest’ grounds. Australia recently ranked relatively poorly in an
international comparison of foreign investor perceptions of the rule of law.[211]
However, as stated above, the Fees Imposition Bill has been
passed by the Senate with no amendment.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Foreign Acquisitions and
Takeovers Act 1975, accessed 21 October 2015.
[2]. Parliament
of Australia, ‘Register
of Foreign Ownership of Agricultural Land Bill 2015 homepage’, Australian
Parliament website, accessed 21 October 2015.
[3]. Ibid.
See also: Parliament of Australia, ‘Foreign
Acquisitions and Takeovers Legislation Amendment Bill 2015 homepage’ and ‘Foreign
Acquisitions and Takeovers Fees Imposition Bill 2015 homepage’, Australian
Parliament website, accessed 23 November 2015.
[4]. Parliament
of Australia, ‘Register
of Foreign Ownership of Agricultural Land Bill 2015 homepage,’ and Foreign
Acquisitions and Takeovers Fees Imposition Bill 2015 homepage’, op. cit.
[5]. Parliament
of Australia, ‘Foreign
Acquisitions and Takeovers Legislation Amendment Bill 2015 homepage’, op.
cit.
[6]. Regulatory Powers
(Standard Provisions) Act 2014, accessed 2 January 2015.
[7]. Acts and Instruments
(Framework Reform) Act 2015, accessed 26 October 2015.
[8]. Anti-Money Laundering
and Counter-Terrorism Financing Act 2006, accessed 26 October 2015.
[9]. Income Tax Assessment
Act 1997, accessed 26 October 2015.
[10]. Taxation Administration
Act 1953,
accessed 26 October 2015.
[11]. Foreign Acquisitions and
Takeovers Regulations 1989, accessed 26 October 2015.
[12]. Foreign
Investment Review Board (FIRB), ‘Policy’, FIRB website,
accessed 26 October 2015.
[13]. Foreign
Investment Review Board, Australia’s
foreign investment policy, FIRB, Canberra, June 2015, p. 1, accessed 26
October 2015.
[14]. Ibid.,
p. 8.
[15]. Ibid.,
p. 9.
[16]. S
Maiden, ‘Foreign
home ownership in the spotlight’, Sunday Territorian, 16 March 2014, p. 8, accessed 26
October 2015.
[17]. N
Bita, ‘Foreigners
in splurge on houses’, Weekend Australian, 1 March 2014, p. 1; R
Harley, ‘2014:
the year of the Chinese developer’, Australian Financial Review, 6
March 2014, p. 41’ J Irvine, ‘Asian
cash adds to home price pressure’, Adelaide Advertiser, 8 March
2014, p. 5; T Condon, ‘Asian
dynamic drives housing’, Weekend Australian, 12 July 2014, p. 25,
accessed 26 October 2015.
[18]. Details
of the terms of reference of the inquiry, submissions to the House Economics
Committee, transcripts of oral hearings and the final report are available on the
inquiry
homepage, accessed 26 October 2015.
[19]. House
of Representatives Standing Committee on Economics, Report on foreign
investment in residential real estate, Commonwealth of Australia,
Canberra, November 2014, p. 3, accessed 26 October 2015.
[20]. Ibid.,
pp. xvii–xix.
[21]. Treasury,
‘Australian
Government response to the House of Representatives Standing Committee on
Economics report: Foreign investment in residential real estate’, Treasury
website, 19 August 2015, accessed 2 November 2015.
[22]. Ibid.,
p. 74.
[23]. T
Abbott (Prime Minister) and J Hockey (Treasurer), Government
to strengthen Australia’s foreign investment framework, media release,
25 February 2015, accessed 2 November 2015.
[24]. T
Abbott (Prime Minister) and J Hockey (Treasurer), Government
strengthens the foreign investment framework, media release, 2 May
2015, accessed 20 November 2015.
[25]. Treasury,
Modernising
Australia’s foreign investment framework, options paper, Treasury,
Canberra, 18 May 2015, accessed 2 November 2015.
[26]. Treasury,
‘Submissions:
modernising Australia’s foreign investment framework’, Treasury website, accessed
2 November 2015.
[27]. Treasury,
Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015: exposure
draft, Treasury, Canberra, 6 July 2015, accessed 2 November 2015.
[28]. The
terms of reference, submissions to the Economics Committee and the final report
are available on the inquiry
homepage, accessed 21 October 2015.
[29]. Senate
Standing Committee on Economics, Inquiry
into the provisions of the Foreign Acquisitions and Takeovers Legislation
Amendment Bill 2015 and related bills, The Senate, Canberra, October
2015, accessed 26 October 2015.
[30]. Ibid.,
p. 30.
[31]. Labor
Senators, Dissenting report, Senate Standing Committee on Economics, Inquiry
into the provisions of the Foreign Acquisitions and Takeovers Legislation
Amendment Bill 2015 and related bills, The Senate, Canberra, 2015, pp.
31–35, accessed 26 October 2015.
[32]. Administrative Decisions
(Judicial Review) Act 1977, accessed 6 November 2015.
[33]. Judiciary Act 1903,
accessed 6 November 2015.
[34]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015 and related Bills, p. 71, accessed 6 November 2015.
[35]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 9, 2015, 9 September, pp. 5–15 and p. 19, accessed 2 November
2015.
[36]. G
Gray, ‘Second
reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015 and related Bills’, House of Representatives, Debates, 16
September 2015, p. 10451, accessed 6 November 2015.
[37]. Australian
Greens (AG), ‘Foreign ownership
of land’, Australian Greens policy document, accessed 6 November 2015.
[38]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015 and related Bills, op. cit., p. 8.
[39]. Ibid.
[40]. The
Statement of Compatibility with Human Rights can be found at pages 139–159 of
the Explanatory
Memorandum to the Bill.
[41]. Parliamentary
Joint Committee on Human Rights, Twenty-seventh
report of the 44th Parliament, 8 September 2015, p. 2, accessed
27 October 2015.
[42]. Foreign
Acquisitions and Takeovers Act, proposed section 4.
[43]. Foreign
Acquisitions and Takeovers Act, proposed section 5 provides that a
person is ordinarily resident in Australia if the person is in
Australia for 200 days or more in any 12 month period.
[44]. Foreign
Acquisitions and Takeovers Act, proposed section 4 provides that a
person holds a substantial interest in an entity if the person
holds an interest of at least 20 per cent in the entity.
[45]. R
Lou and S Lilly, ‘Foreign Investment & FIRB Update—Bills to amend Foreign
Acquisitions and Takeovers Act’, Norton Rose Fulbright
website, August 2015, accessed 18 November 2015.
[46]. Financial
Services Institute, Submission
to the Senate Standing Committee on Economics, Inquiry into the provisions
of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and
related bills, 18 September 2015, p. 1, accessed 18 November 2015.
[47]. Ibid.,
p. 2.
[48]. Foreign
Investment Review Board, Australia’s
foreign investment policy, June 2015, op. cit., p. 2.
[49]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 9,
2015, op. cit., pp. 6–7.
[50]. Senate
Standing Committee for the Scrutiny of Bills, Report,
11, 2015, 14 October 2015, pp. 659–660, accessed 6 November 2015.
[51]. Ibid.,
p. 660.
[52]. Foreign
Acquisitions and Takeovers Act, proposed section 4 provides that the
term entity means a corporation or a unit trust.
[53]. Foreign
Acquisitions and Takeovers Act, proposed section 4 provides that an
Australian entity or Australian business is an agribusiness in
the circumstances prescribed by the regulations.
[54]. Foreign
Acquisitions and Takeovers Act, proposed section 4 provides that the
term land includes a building (including a new dwelling or an
established dwelling) or a part of a building and subsoil of land.
[55]. Foreign
Acquisitions and Takeovers Act, proposed section 40.
[56]. Foreign
Acquisitions and Takeovers Act, proposed section 41.
[57]. Foreign
Acquisitions and Takeovers Act, proposed section 43.
[58]. Foreign
Acquisitions and Takeovers Act, proposed section 44.
[59]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 40(2)(b).
[60]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 40(2)(d).
[61]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 40(2)(a).
[62]. Foreign
Acquisitions and Takeovers Act, proposed subsections 40(3) and 52(2).
[63]. Treasury,
Foreign Acquisitions and Takeovers Regulation 2015 and Foreign Acquisitions and
Takeovers Fees Imposition Regulation 2015: exposure
draft, Treasury website, accessed 18 November 2015.
[64]. Foreign
Acquisitions and Takeovers Act, proposed subsection 40(4).
[65]. Foreign
Acquisitions and Takeovers Act, proposed subsection 40(6).
[66]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 40(2)(a) and
proposed subsection 40(5).
[67]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 47(2)(a).
[68]. Foreign
Acquisitions and Takeovers Act, proposed section 4.
[69]. Section
14, Foreign Acquisitions and Takeovers Regulation 2015: exposure
draft, accessed 18 November 2015.
[70]. Foreign
Acquisitions and Takeovers Act, proposed section 4.
[71]. ANZSIC
Codes is defined at section 5 of the exposure draft Regulations, but is not
defined in the Amendment Bill. However, Senator Wong has moved an amendment to
insert an appropriate definition. If the amendment is passed, the following
will be inserted into section 4 of the Foreign Acquisitions and Takeovers
Act: Australian and New Zealand Standard Industrial Classification
Codes means the Australian and New Zealand Standard Industrial
Classification Codes, as in force from time to time, published by the Australian
Bureau of Statistics. This is the definition that appears in the exposure draft
Regulations.
[72]. Foreign
Acquisitions and Takeovers Regulation 2015: exposure
draft, proposed subsection 22(2).
[73]. Foreign
Acquisitions and Takeovers Regulation 2015: exposure
draft, proposed subsection 22(4).
[74]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 47(2)(b).
[75]. Foreign
Acquisitions and Takeovers Act, proposed section 4.
[76]. Foreign
Acquisitions and Takeovers Act, proposed subsection 12(1).
[77]. Foreign
Acquisitions and Takeovers Act, proposed subsection 47(3).
[78]. Foreign
Acquisitions and Takeovers Act, proposed subsection 21(4) defines
the term holding entity for the purposes of the Act.
[79]. Foreign
Acquisitions and Takeovers Act, proposed subsection 47(5).
[80]. M
Brennan and I Eow, ‘The
foreign investment reforms’, King and Wood Mallesons website, 2 November
2015, accessed 18 November 2015.
[81]. Australian
Food and Grocery Council, Submission to the Senate Standing Committee on
Economics, Inquiry into the provisions of the Foreign Acquisitions and
Takeovers Legislation Amendment Bill 2015 and related bills, p. 4, accessed
18 November 2015.
[82]. Foreign
Acquisitions and Takeovers Act, proposed section 57.
[83]. Foreign
Acquisitions and Takeovers Act, proposed sections 4 and 57.
[84]. Foreign
Acquisitions and Takeovers Act, proposed section 58.
[85]. Foreign
Acquisitions and Takeovers Act, proposed section 59.
[86]. Foreign
Acquisitions and Takeovers Act, proposed subsections 57(2), 58(2) and
59(2).
[87]. Foreign
Acquisitions and Takeovers Regulations, paragraphs 3(e) and (r).
[88]. Foreign
Acquisitions and Takeovers Act, section 18.
[89]. Foreign
Acquisitions and Takeovers Act, proposed subsections 67(1) and (2).
[90]. Foreign
Acquisitions and Takeovers Act, proposed section 68.
[91]. Foreign
Acquisitions and Takeovers Act, proposed section 69.
[92]. Foreign
Acquisitions and Takeovers Act, proposed subsections 69(1) and (2).
[93]. Foreign
Acquisitions and Takeovers Act, proposed subsection 69(4).
[94]. Foreign
Acquisitions and Takeovers Act, proposed subsection 71(1).
[95]. Foreign
Acquisitions and Takeovers Act, proposed subsections 75(1)–(3).
[96]. Foreign
Acquisitions and Takeovers Act, proposed subsections 74(2) and (4).
[97]. Foreign
Acquisitions and Takeovers Act, proposed section 70.
[98]. Foreign
Acquisitions and Takeovers Act, proposed section 77.
[99]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015 and related Bills, pp. 11–12.
[100]. Financial
Services Institute, Submission to the Senate Standing Committee on
Economics, Inquiry into the provisions of the Foreign Acquisitions and
Takeovers Legislation Amendment Bill 2015 and related bills, op. cit., p.
2.
[101]. Ibid.
[102]. Foreign
Acquisitions and Takeovers Act, proposed section 81.
[103]. Foreign
Acquisitions and Takeovers Act, proposed section 135.
[104]. Foreign
Acquisitions and Takeovers Act, proposed section 82.
[105]. Proposed
subsection 77(5) of the Foreign Acquisitions and Takeovers Act
defines the decision period as the period of 30 days after the day the
Treasurer receives a notice from a person stating that a significant action is proposed
to be taken or such longer period as the Treasurer has agreed to in writing.
[106]. Foreign
Acquisitions and Takeovers Act, proposed subsection 82(2).
[107]. Foreign
Acquisitions and Takeovers Act, proposed section 84.
[108]. Foreign
Acquisitions and Takeovers Act, proposed section 85.
[109]. Foreign
Acquisitions and Takeovers Act, proposed section 86.
[110]. Foreign
Acquisitions and Takeovers Act, proposed section 87.
[111]. Foreign
Acquisitions and Takeovers Act, proposed section 88.
[112]. Under
section 4AA of the Crimes
Act 1914, a penalty unit is equivalent to $180. This means the maximum
penalty is $135,000.
[113]. The
penalty is equivalent to $675,000.
[114]. Foreign
Acquisitions and Takeovers Act, proposed section 90.
[115]. The
penalty is equivalent to $45,000.
[116]. The
penalty is equivalent to $225,000.
[117]. Foreign
Acquisitions and Takeovers Act, proposed section 89.
[118]. Foreign
Acquisitions and Takeovers Act, proposed section 91.
[119]. Proposed
subsection 77(5) sets out the period within which the Treasurer must make a
decision or make an order as being 30 days after the Treasurer receives the
notice that a significant action is proposed to be taken. The Treasurer may
extend the period if the person makes a written request to the Treasurer to
that effect.
[120]. Foreign
Acquisitions and Takeovers Act, proposed section 92.
[121]. Foreign
Acquisitions and Takeovers Act, proposed subsection 93(1).
[122]. Foreign
Acquisitions and Takeovers Act, proposed subsection 93(2).
[123]. The
penalty is equivalent to $45,000. However, under paragraph 82(5)(a) of the Regulatory
Powers (Standard Provisions) Act the maximum pecuniary penalty that can be
imposed on a body corporate that contravenes the provision is 1,250 penalty
units, being equivalent to $225,000.
[124]. Foreign
Acquisitions and Takeovers Act, proposed section 94.
[125]. Foreign
Acquisitions and Takeovers Act, proposed subsection 94(4).
[126]. Foreign
Acquisitions and Takeovers Act, proposed subsection 95(1).
[127]. Foreign
Acquisitions and Takeovers Act, proposed subsection 95(4).
[128]. Foreign
Acquisitions and Takeovers Act, proposed subsections 96(1) and (2).
The note to subsection 96(1) provides examples of the relevant conditions,
including a condition prohibiting a temporary resident from leasing an
established dwelling.
[129]. Foreign
Acquisitions and Takeovers Act, proposed paragraphs 95(7)(a) and
96(4)(a).
[130]. Foreign
Acquisitions and Takeovers Act, proposed paragraphs 95(7)(b) and
96(4)(b).
[131]. Foreign
Acquisitions and Takeovers Act, proposed paragraphs 95(7)(c) and
96(4)(c).
[132]. Foreign
Acquisitions and Takeovers Act, proposed section 97.
[133]. The
penalty is equivalent to $45,000.
[134]. Hickey
Lawyers, Submission to the Senate Standing Committee on
Economics, Inquiry into the provisions of the Foreign Acquisitions and
Takeovers Legislation Amendment Bill 2015 and related bills, (see
attachment dated March 2015), p. 3, accessed 18 November 2015.
[135]. J
Hockey (Treasurer), ‘Second
reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015’, House of Representatives, Debates, 20 August 2015, p. 8984,
accessed 19 November 2015.
[136]. Attorney-General’s
Department (AGD), Guide
to framing Commonwealth offences, infringements notices and enforcement powers,
AGD, Canberra, September 2011, accessed 16 November 2015.
[137]. Replacement
Explanatory Memorandum, Regulatory Powers (Standard Provisions) Bill 2014,
p. 2, accessed 16 November 2015.
[138]. Proposed
subsection 99(1) of the Foreign Acquisitions and Takeovers Act,
together with sections 78 and 79 of the Regulatory Powers (Standard
Provisions) Act operate to apply Part 4 of that Act to the Foreign
Acquisitions and Takeovers Act.
[139]. Proposed
subsection 99(2) of the Foreign Acquisitions and Takeovers Act.
[140]. Proposed
subsection 99(1) of the Foreign Acquisitions and Takeovers Act
and section 79 of the Regulatory Powers (Standard Provisions) Act.
[141]. Foreign
Acquisitions and Takeovers Act, proposed subsection 99(3).
[142]. Regulatory
Powers (Standard Provisions) Act, subsections 82(1) and (2).
[143]. Regulatory
Powers (Standard Provisions) Act, subsection 82(3).
[144]. Regulatory
Powers (Standard Provisions) Act, section 83.
[145]. Proposed
section 100 of the Foreign Acquisitions and Takeovers Act, together
with subsection 99(2) and section 100 of the Regulatory Powers (Standard
Provisions) Act operate to apply Part 5 of that Act to the Foreign Acquisitions
and Takeovers Act.
[146]. Foreign
Acquisitions and Takeovers Act, proposed subsection 100(4).
[147]. Regulatory
Powers (Standard Provisions) Act, subsection 103(2).
[148]. Regulatory
Powers (Standard Provisions) Act, subsection 104(1).
[149]. Regulatory
Powers (Standard Provisions) Act, subsection 104(2).
[150]. Foreign
Acquisitions and Takeovers Act, proposed subsection 100(5).
[151]. Foreign
Acquisitions and Takeovers Act, proposed subsection 100(6) and
proposed section 101.
[152]. Foreign
Acquisitions and Takeovers Act, proposed subsection 101(1).
[153]. Foreign
Acquisitions and Takeovers Act, proposed section 4.
[154]. Foreign
Acquisitions and Takeovers Act, proposed subsection 102(1).
[155]. Foreign
Acquisitions and Takeovers Act, proposed subsection 102(2).
[156]. Regulatory
Powers (Standard Provisions) Act, section 83.
[157]. Foreign
Acquisitions and Takeovers Act, proposed subsection 104(3).
[158]. Foreign
Acquisitions and Takeovers Act, proposed subsection 106(1).
[159]. Foreign
Acquisitions and Takeovers Act, proposed subsection 105(3).
[160]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015,
p. 85.
[161]. Foreign
Acquisitions and Takeovers Act, proposed subsection 106(3).
[162]. An
interest in Australian land includes an interest under a long term lease. Foreign
Acquisitions and Takeovers Act, proposed section 12 and proposed subsection
104(2).
[163]. Foreign
Acquisitions and Takeovers Act, proposed subsection 104(4).
[164]. Foreign
Acquisitions and Takeovers Act, proposed subsection 106(2).
[165]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 107(2)(a).
[166]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 107(2)(b) and
proposed subsection 107(3).
[167]. Any
appeal would be made under the Judiciary Act.
[168]. Foreign
Acquisitions and Takeovers Act, proposed section 109.
[169]. Proceeds of Crime Act
2002, accessed 17 November 2015.
[170]. Foreign
Acquisitions and Takeovers Act, proposed section 113.
[171]. Foreign
Acquisitions and Takeovers Act, proposed section 114.
[172]. Foreign
Acquisitions and Takeovers Act, proposed section 115.
[173]. Foreign
Acquisitions and Takeovers Act, proposed paragraphs 117(1)(a) and (b).
[174]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 117(1)(c).
[175]. Foreign
Acquisitions and Takeovers Act, proposed paragraph 117(1)(d).
[176]. Foreign
Acquisitions and Takeovers Act, proposed subsection 119. The
imposition of strict liability means that a fault element does not need to be
satisfied, but the offence will not criminalise honest errors and a person
cannot be held liable if he, or she, had an honest and reasonable belief that
they were complying with relevant obligations.
[177]. The
penalty is equivalent to $5,400.
[178]. Foreign
Acquisitions and Takeovers Act, proposed paragraphs 120(1)(a) and (b).
[179]. Foreign
Acquisitions and Takeovers Act, proposed subsection 120(1).
[180]. Foreign
Acquisitions and Takeovers Act, proposed sections 121–127.
[181]. Foreign
Acquisitions and Takeovers Act, proposed section 128. The penalty is
equivalent to $21,600.
[182]. Foreign
Acquisitions and Takeovers Act, proposed section 129.
[183]. Foreign
Acquisitions and Takeovers Act, proposed subsection 133(2).
[184]. This
is equivalent to $5,400.
[185]. Foreign
Acquisitions and Takeovers Act, proposed subsection 133(6).
[186]. Foreign
Acquisitions and Takeovers Act, proposed subsection 133(7).
[187]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015, op. cit., p. 100.
[188]. Foreign
Acquisitions and Takeovers Act, proposed section 139.
[189]. Foreign
Acquisitions and Takeovers Act, proposed subsection 139(3).
[190]. Legislative Instruments
Act 2003, accessed 11 November 2015.
[191]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 9, 2015, op. cit., p. 11.
[192]. Acts and Instruments
(Framework Reform) Act 2015, accessed 2 November 2015.
[193]. Explanatory
Memorandum, Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015 and related Bills, op. cit., p. 105.
[194]. Anti-Money Laundering
and Counter-Terrorism Financing Act 2006, accessed 2 November 2015.
[195]. Income Tax Assessment
Act 1997, accessed 2 November 2015.
[196]. Taxation Administration
Act 1953, accessed 2 November 2015.
[197]. Taxation
Administration Act, proposed subsections 354-5(1) and (2), inserted
by item 3 of Schedule 3 to the Amendment Bill.
[198]. Taxation
Administration Act, proposed subsection 354-5(3).
[199]. Taxation
Administration Act, proposed subsection 354-5(7).
[200]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 9, 2015, op. cit., p. 12.
[201]. Foreign
Acquisitions and Takeovers Legislation Amendment Act, proposed section 5.
[202]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed subsection 6(2).
[203]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed subsection 6(1).
[204]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed subsection 7(2).
[205]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed subsection 9(1).
[206]. The
regulation making power is contained in proposed section 13 of the Foreign
Acquisitions and Takeovers Fees Imposition Act.
[207]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed section 11.
[208]. Foreign
Acquisitions and Takeovers Fees Imposition Act, proposed section 12.
[209]. Property
Council of Australia, Submission to the Senate Standing Committee on
Economics, Inquiry into the provisions of the Foreign Acquisitions and
Takeovers Legislation Amendment Bill 2015 and related bills, 18 September
2015, p. 1, accessed 18 November 2015.
[210]. HIA, Submission
to Treasury, Foreign Acquisitions and Takeovers Regulation 2015 and Foreign
Acquisitions and Takeovers Fees Imposition Regulation 2015: exposure draft,
17 July 2015, p. 1, accessed 8 November 2015.
[211]. Australian Financial
Markets Association, Submission
to Treasury, Foreign Acquisitions and Takeovers Regulation 2015 and Foreign
Acquisitions and Takeovers Fees Imposition Regulation 2015: exposure draft,
17 July 2015, p. 2, accessed 8 November 2015.
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