11 December 2020

Pre-COVID FIRB Thresholds to be Reinstated on 1 January 2021

This article was written by Malcolm Brennan, Caitlin Rodgers, Katie Haywood and Lily Shen.

Late on 9 December 2020, the Treasurer announced that the current $0 monetary screening thresholds for FIRB applications will be lifted on 1 January 2021, resulting for the most part in the standard monetary thresholds being reinstated. 

At the commencement of the New Year, foreign investors will be subject to the pre-COVID notification thresholds which they were previously familiar with (indexed for 2021).  However, investors should not get too comfortable or become overly complacent as the foreign investment landscape will continue to change after 1 January 2021. 

On the same day the Treasurer announced the removal of the $0 thresholds, Federal Parliament passed the most significant reforms to Australia’s foreign investment regime in over 45 years, with the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020.  

The changes reflect the Australian Government’s continued focus on national security, and echo similar legislative changes in New Zealand, US and UK.  The amendments will come into effect on 1 January 2021, with the primary changes relating to a mandatory pre-investment notification process for acquisitions of national security land and businesses, increased penalties for non-compliance and greater powers for the Treasurer including a call-in power as well as power to give directions. 

With national security at the forefront of political debate, Australia’s foreign investment regime is becoming increasingly difficult to navigate.

What does the lifting of the $0 threshold mean for investors?

The reinstatement of the pre-coronavirus monetary thresholds from 1 January 2021 will be welcomed by many foreign investors whose investments not usually subject to FIRB approval have been delayed during the temporary measures.  

Certain non-foreign government investors who currently have applications before FIRB may look to withdraw non-urgent applications and postpone deals to take advantage of the return to thresholds.  We expect that the reintroduction of the thresholds will see a number of proposals which are currently waiting on approval being withdrawn and hopefully freeing up FIRB and the Treasurer to attend to other ongoing applications.  Alternatively, investors could continue with the application and obtain approval.  However, given the current significant delays that are being experienced by foreign investors awaiting FIRB approval for their investments, this is unlikely to be an attractive option. 

Importantly, investors seeking to invest in sensitive and national security sectors should brace themselves for the continuance of the $0 threshold and heightened scrutiny.  Furthermore, foreign government investors will continue to be subject to the $0 threshold for all investments, as they did prior to the introduction of the temporary measures. 

The Reforms

The implementation of the new national security test, which is accompanied by a $0 threshold, allows the Treasurer “to impose conditions or block investment by a foreign person on national security grounds regardless of the value of investment”. 

Importantly, national security land and businesses will be carved out of the moneylending exemption.  Further detail on the moneylending exemption will not be available until the regulations are released.  We are expecting this to occur in the final weeks of December.  It is hoped that the significant negative feedback in respect of the proposed changes to the moneylending exemption has gained traction and the regulation when released will reflect that feedback.

The national security amendments grant enhanced monitoring and investigation powers to the Treasurer, alongside stronger enforcement options and harsher penalties for non-compliance.

The Treasurer will also have the power to ‘call-in’ non-notifiable investments for review, if the Treasurer believes the action could pose a national security concern.  Investors may make voluntary filings to require the Treasurer to decide whether to exercise the call-in power within a certain period of time.  

Uncharted waters ahead

Whilst the definitions of national security land and businesses are yet to be finalised in the accompanying regulations, national security land will include Defence premises, land where the national intelligence community holds a determinable interest, and land declared by the Treasurer or Parliament to be national security land.  National security businesses will include activities involved in or connected with critical infrastructure, telecommunications, Defence, the national intelligence community and their supply chains.

As it is currently understood, critical infrastructure comprises critical assets in water, electricity, gas and ports. However, proposed amendments to the Security of Critical Infrastructure Act 2018 (SOCI Act), which are expected to pass early- to mid-2021, could expand the definition to include assets in areas as broad as banking and finance, health, food, data, education and transport.  

This will likely prove to be problematic for investors considering investing in sectors that are included in, or incidental to, the new scope of “critical infrastructure”, particularly in the early months of the reforms where precedent will be lacking. 

Voluntary process?

We strongly encourage investors to take advantage of the voluntary process offered by FIRB to check if a proposal is caught by the national security reforms.  With these amendments, foreign investors will need to take care if they are investing in sensitive national security land or businesses.  Investors should err on the side of caution by choosing to make voluntary filings before they make investments.  FIRB says time spent on the voluntary assessment will be credited against the processing of the application if notification is required.  However, it is hard to see a national security matter being dealt with in the minimum 30 day decision period. So continue to expect extensions of decision periods as the norm.

The FIRB amendments also promised a reformed fee framework that is “fairer and simpler for foreign investors”.  Unfortunately, though unsurprisingly, fees have been increased across the board, with higher value deals and agricultural investments particularly hard hit.

In these unprecedented times…

The scope of national security land and businesses remain unclear, and this uncertainty is further exacerbated by critical infrastructure reforms currently being undertaken by the Department of Home Affairs.

In light of these changes, we recommend that all foreign investors promptly familiarise themselves with the new regime.  Where possible, commercial deadlines should take into consideration the need to obtain FIRB approval and the likelihood for delay.

The happy news of course is that if the proposal is not within the national security net and below the reinstated value thresholds, a FIRB application will no longer be required. 

 2021年1月1日起恢复新冠疫情前
澳大利亚外国投资审查委员会(FIRB)审查门槛

澳大利亚财政部长于2020年12月9日宣布,将自2021年1月1日起提高目前0澳元的FIRB审查门槛,恢复大部分投资审查标准金额门槛。

从新的一年开始,外国投资者面对的将是他们所熟悉的新冠疫情前申报门槛(2021年调整后标准)。但由于2021年1月1日后外国投资格局将继续变化,投资者不应过于放松警惕或过早安于现状。 

财政部长宣布取消0澳元审查门槛的同一天,联邦议会也通过了《2020年外国投资改革(保护澳大利亚国家安全)法案》,这是过去45年来澳大利亚外国投资机制最显著的改革。

这些变化反映了澳大利亚政府对国家安全的持续关注,也与新西兰、美国和英国的类似立法变化相呼应。修正案将于2021年1月1日生效,主要变化涉及针对收购国家安全土地和业务的强制性投资前通知程序、增加对违规行为的处罚以及赋予财政部长的更大权力,包括介入审查权及发出指令的权力。

由于国家安全目前是政治辩论最核心的议题,澳大利亚的外国投资机制正在变得越来越难以驾驭。  

提高0澳元审查门槛对投资者来说意味着什么?

2021年1月1日起恢复新冠疫情前审查金额门槛将受到许多外国投资者的欢迎,这些投资者所开展的投资项目通常无需获得FIRB批准,但在临时措施实施期间被迫推迟。

对于已经提交FIRB申请的非外国政府投资者可以考虑撤回非紧急申请并推迟交易,以利用审查门槛恢复的政策利好。我们预计,恢复审查门槛后,一些正在等待批准的提案将被撤回,FIRB和财政部长将有望获得更多时间对其他申请进行审查。投资者们也可以继续等待申请获批,但考虑到目前外国投资者们在等待FIRB批准投资时所面临的长时间延误,这一选择并不具有吸引力。

重要的是,寻求在敏感领域和有关国家安全领域开展投资的投资者们应做好0澳元审查门槛及严格审查措施继续适用的准备。另外,与临时措施生效前相同,外国政府投资者开展所有投资的审查门槛仍为0澳元。

改革

新的0澳元门槛国家安全审查执行后,将与此同时允许财政部长“以国家安全为由对外商投资施加条件或阻止外商投资,无论投资价值的大小”。

重要的是,国家安全土地和业务将不再适用放贷豁免。不过在相关法规出台前,我们无法获知有关放贷豁免的更多详情。我们预计,相关法规将在12月末出台。希望届时对拟议放贷豁免的大量反对意见能够得到采纳并反映在新出台的法规中。

国家安全修正案赋予财政部长更大的监督和调查权力,扩大了执法权力,同时加大了对违规行为的处罚力度。

如果认为可能造成国家安全问题,财政部长还将有权“介入”原本无需通知的投资项目进行审查。投资者可以自愿申报并请求财政部长在一定期限内决定是否行使介入审查权。  

前路似未明朗

尽管国家安全用地和业务的定义尚待在相关法规中最终确定,但国家安全用地将包括国防相关场地、国家情报部门持有可确定权益的土地及财政部长或议会宣布属于国家安全土地的区域。国家安全业务将包括涉及关键基础设施、电信、国防、国家情报部门及其供应链或与之相关的活动。

根据目前的消息,关键基础设施包括水电气和港口中的关键资产。但《 2018年关键基础设施安全法》(SOCI)的拟议修正案有望于2021年年初至年中通过,届时可能会将关键基础设施的定义扩展至包括银行和融资、卫生、食品、数据、教育和运输等领域的资产。

对于正在考虑开展“关键基础设施”新范围内投资或相关行业投资的投资者们而言,这一点可能造成不确定性,尤其是在缺乏先例的改革初期阶段。 

自愿程序?

我们强烈建议投资者们利用FIRB提供的自愿程序来确定投资意向是否属于国家安全改革范围之内。修正案通过后,投资于敏感的国家安全土地或业务的外国投资者们需要格外小心。投资者们应谨慎行事,在开展投资前选择自愿申报。FIRB表示,如果确实需要申报,自愿评估所花费的时间可以用于抵消申请处理所需时间。但是,涉及国家安全的事项很难在30天最低决策期内得到处理。因此,投资者应将决策期延长视为常规。

FIRB修正案还承诺对费用框架进行改革,以实现“对外国投资者而言更加公平和简洁明了”。但是(尽管并不意外),FIRB的费用已全面增加,尤其是对于高价值交易和农业投资方面。

在这前所未有的时期…

国家安全土地和业务的范围尚不明确,而内政部目前正在开展的关键基础设施改革则进一步加剧了这种不确定性。

有鉴于这些变化,我们建议所有外国投资者尽早熟悉新机制。在可能的情况下,交易时间安排应考虑到是否需要取得FIRB批准和延迟的可能性。

当然,值得高兴的是,如果投资意向不属于国家安全考虑范围且并未达到恢复后的申报金额门槛,投资者们将无需再提交FIRB申请。

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