Update from David Irvine, Chair of the Foreign Investment Review Board

It is three weeks since the Treasurer announced temporary changes to our foreign investment regime. In this note, I want to thank the Foreign Investment Review Board’s (FIRB) stakeholders for their support and understanding during this period, and provide an update on our progress in implementing these measures.

To recap, on Sunday 29 March 2020, the Treasurer announced two temporary changes to Australia’s foreign investment framework: all proposed foreign investments subject to the Foreign Acquisitions and Takeovers Act 1975 (the Act) would require approval, regardless of value; and to ensure sufficient time for screening applications, the FIRB would work with existing and new applicants to extend timeframes for reviewing applications from 30 days to up to six months.

As I said at the time, the changes are necessitated by extraordinary economic circumstances. As the coronavirus pandemic puts the economy and businesses under intense pressure, these temporary measures are required to protect Australia’s national interest.

But let me be clear: Australia continues to welcome and be open to foreign investment. Foreign investment will play a critical role in Australia’s recovery from this crisis – just as it has been critical to our long-term prosperity.

Understandably, the announcement of the temporary measures caught investors by surprise. In the weeks since, the FIRB has worked closely with stakeholders – including investors, lawyers and industry representatives – to build mutual understanding and address concerns arising from the changes. Many of these issues have already been addressed through Q&As posted on the FIRB website. More will be addressed through an imminent update to the website’s guidance notes.

A particular focus has been timeframes. At the same time as we work with some investors to extend review timeframes to six months, we are introducing measures to ensure the great majority of applications are processed much faster. To deal with the expected substantial increase in applications, we are triaging cases using a risk-based approach and have brought on additional staff to manage the workload. This will help manage both urgent cases supporting Australian businesses and routine applications of lower economic significance. We are committed to meeting commercial deadlines wherever possible during these times of economic crisis.

Finally, an obvious outcome of the threshold changes is that many investments that did not previously require screening now do. It is the responsibility of investors to understand how and if the framework applies to them, and to comply with it. If unsure, foreign investors should seek legal advice. Through a range of channels, FIRB will continue to reach out to investors to ensure they are aware of the changes and their obligation to comply. The Government is committed to ensuring strong compliance with the Act.

As always, further information about the foreign investment framework, including these temporary measures, is available on the FIRB website: www.firb.gov.au.  If investors or their advisers have further questions, they should not hesitate to contact FIRB by calling +61 2 6263 3795 or emailing firbenquiries@treasury.gov.au. Our staff are more than ready to assist.