AUSTRALIA: Government Response to the Evaluation of the Foreign Investment Reforms

Tuesday February 15 2022

The Government has released the Secretary to the Treasury’s evaluation of the foreign investment reforms that commenced on 1 January 2021, as well as the Government’s response to the evaluation. The evaluation was a requirement under the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020, and was delivered to the Treasurer on 10 December 2021. It concluded that in their first year of operation, the reforms were striking the appropriate balance between supporting foreign investment into Australia and protecting the national interest. However, the evaluation also found that the framework should continue to be monitored to ensure it keeps pace with developments in the foreign investment landscape.

The Government’s response to the evaluation includes a package of regulation amendments for introduction in early 2022 to support streamlining the framework, and a public consultation on broader reform options to be considered later in the year.

The regulation amendments address the foreign investment framework’s treatment of moneylending, Australian media businesses, unlisted entities, securities investments that do not increase an investor’s overall interest in an entity, and acquisitions by foreign custodians. The Exposure Draft Regulations and Explanatory Statement for the amendments can be found on the Treasury’s consultation website. Written submissions on these changes are welcome before 11:59pm AEDT on 25 February 2022.

For the public consultation, a Discussion Paper published on the Treasury website seeks stakeholders’ views on other elements of the foreign investment framework that could be enhanced in a second package of reforms for introduction later in 2022. Written submissions responding to that paper are welcome before 11:59pm AEDT on 11 March 2022.

Further detail about the evaluation of the 2021 foreign investment reforms are available on the Treasury’s website.

Click on the above link for further information.