Maintaining strong compliance with Australia’s foreign investment legislation is a priority for the Australian Government, to ensure that foreign investment is not contrary to the national interest (or national security, as the case requires).
The Treasurer and the Treasury have a range of tools available to assess whether obligations under Australia’s foreign investment legislation are being complied with and to respond to non-compliance. We seek to understand risks posed by investors and others in our regulatory framework along a compliance continuum (see Compliance Framework Policy Statement for more information on this continuum). This helps direct the posture of our regulatory and compliance responses which may range from education to criminal prosecution.
Treasury aims to ensure that, for those seeking to invest in Australia, their obligations under the Foreign Acquisitions and Takeovers Act 1975 (the Act) are clear and easy to understand.
Treasury also uses intelligence sources to target potential non-compliance. This enables pro-active detection and allows for early intervention to mitigate any risks to the national interest (or national security, as the case requires).
Treasury undertakes a range of activities for the purpose of assessing and assuring compliance, which includes audits, monitoring and assessing information provided by foreign investors. These activities aim to achieve a balance between ensuring strong compliance with the foreign investment legislation and supporting foreign investors to do the right thing. Treasury seeks to undertake these activities in a way that is professional, transparent, risk-based and proportionate to the level of risk, in accordance with the Regulator Performance Framework.
Where non-compliance is identified or suspected, a risk-based and proportionate response will be taken to rectify non-compliance and may include enforcing compliance through penalties and sanctions. The recent changes to Australia’s foreign investment legislation mean new compliance and enforcement powers are available to prevent, identify and respond to instances of non-compliance. These powers include the power to direct investors to take or cease particular actions, or to give an infringement notice where there is a reasonable belief that non-compliance has occurred.
Investors have specific record keeping obligations under the Act. Having good record keeping practices in place will help demonstrate compliance with obligations under Australia’s foreign investment laws.
If you have information about a suspected breach of Australia’s foreign investment laws, you can report this to the ATO or Treasury (as appropriate).
More detail on your compliance and reporting obligations and Treasury’s approach to managing investor compliance is available in Your compliance obligations under the Foreign Acquisitions and Takeovers Act 1975 [DOCX 223B].
Foreign investment compliance roles and responsibilities
Treasury is responsible for compliance and enforcement activities for proposals within its areas of screening responsibility, including business, agricultural and some commercial land foreign investment proposals. Further information on how Treasury approaches these activities is included in the Statement.
The Australian Taxation Office (ATO) is responsible for compliance and enforcement activities for proposals within its screening responsibility, including residential real estate and some commercial land proposals. Further information on how the ATO approaches these activities can be found in the Compliance – Residential Guidance below.
Foreign investment compliance and enforcement activities may also be supported by other regulatory regimes and specialist advice from other entities, including Australian Government regulators, as required.
Investor reporting requirements
For further information on the requirements for investor reporting, see the Investor reporting requirements.