US Free Trade Agreement Implementation Act 2004 (120 of 2004)

Schedule 5   Foreign acquisitions and takeovers amendments

Foreign Acquisitions and Takeovers Act 1975

9   After Part I

Insert:

Part IA - Exempt foreign investments

17A Exempt foreign investments in prescribed corporations etc.

(1) Section 18 applies in relation to a prescribed corporation as if neither of the following were a foreign person for the purposes of that section:

(a) a prescribed foreign investor that is covered by subsection 17B(1) or (2) in relation to the corporation;

(b) a prescribed foreign government investor that is covered by subsection 17C(1) in relation to the corporation.

(2) Section 20 applies in relation to an Australian corporation as if neither of the following were a foreign person for the purposes of that section:

(a) a prescribed foreign investor that is covered by subsection 17B(1) or (2) in relation to the corporation;

(b) a prescribed foreign government investor that is covered by subsection 17C(1) in relation to the corporation.

(3) Sections 19 and 21 apply in relation to a business as if neither of the following were a foreign person for the purposes of those sections:

(a) a prescribed foreign investor that is covered by subsection 17B(3) in relation to the business;

(b) a prescribed foreign government investor that is covered by subsection 17C(2) in relation to the business.

(4) Section 26 applies in relation to an Australian corporation as if neither of the following were a person covered by that section:

(a) a prescribed foreign investor that is covered by subsection 17B(1) or (2) in relation to the corporation;

(b) a prescribed foreign government investor that is covered by subsection 17C(1) in relation to the corporation.

(5) In applying section 18, 19, 20, 21 or 26 in relation to an entity that is neither a prescribed foreign investor nor a prescribed foreign government investor, do not apply subsection (1), (2), (3) or (4) for the purposes of:

(a) determining whether 2 or more persons (whether or not those persons are associates) hold an aggregate controlling interest in a corporation; or

(b) determining whether 2 or more persons (whether or not those persons are associates) together are in a position to control an amount of the voting power in a corporation; or

(c) determining whether 2 or more persons (whether or not those persons are associates) together hold interests in the issued shares in a corporation; or

(d) determining whether 2 or more persons (whether or not those persons are associates) together are in a position to determine the policy of a business or corporation.

17B Asset thresholds for exempt foreign investments in prescribed corporations etc. - prescribed foreign investors

(1) A prescribed foreign investor is covered by this subsection in relation to a corporation if:

(a) the corporation, or a subsidiary of the corporation, carries on a business wholly or partly in a prescribed sensitive sector in relation to the prescribed foreign investor; and

(b) for a corporation covered by paragraph 13(1)(a), (b), (c), (g) or (h) - the value of the corporation's total assets, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph; and

(c) for a corporation covered by paragraph 13(1)(d), (e) or (f) because the corporation, or another corporation or other corporations, held certain assets on a particular date - the value of those assets on that date, determined in accordance with section 13, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph.

(2) A prescribed foreign investor is covered by this subsection in relation to a corporation if:

(a) neither the corporation, nor a subsidiary of the corporation, carries on a business wholly or partly in a prescribed sensitive sector in relation to the prescribed foreign investor; and

(b) for a corporation covered by paragraph 13(1)(a), (b), (c), (g) or (h) - the value of the corporation's total assets, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph; and

(c) for a corporation covered by paragraph 13(1)(d), (e) or (f) because the corporation, or another corporation or other corporations, held certain assets on a particular date - the value of those assets on that date, determined in accordance with section 13, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph.

(3) A prescribed foreign investor is covered by this subsection in relation to a business if:

(a) both of the following conditions are satisfied:

(i) the business is wholly or partly in a prescribed sensitive sector in relation to the prescribed foreign investor;

(ii) the value of the total assets of the business, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this subparagraph; or

(b) both of the following conditions are satisfied:

(i) the business is neither wholly nor partly in a prescribed sensitive sector in relation to the prescribed foreign investor;

(ii) the value of the total assets of the business, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this subparagraph.

(4) Regulations made for the purposes of a particular provision of this section may provide for different amounts for different prescribed foreign investors, depending on all or any of the following:

(a) the kind of prescribed foreign investor concerned;

(b) in relation to subsection (1) or paragraph (3)(a) - the kind of prescribed sensitive sector concerned;

(c) in relation to subsection (1) or (2) - the kind of corporation concerned;

(d) in relation to subsection (3) - the kind of business concerned;

(e) any other matter.

(5) Regulations made for the purposes of a particular provision of this section may provide for a method for indexing an amount.

(6) Subsections (4) and (5) do not limit the regulations that may be made for the purposes of this section.

17C Asset thresholds for exempt foreign investments in prescribed corporations etc. - prescribed foreign government investors

(1) A prescribed foreign government investor is covered by this subsection in relation to a corporation if:

(a) for a corporation covered by paragraph 13(1)(a), (b), (c), (g) or (h) - the value of the corporation's total assets, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph; and

(b) for a corporation covered by paragraph 13(1)(d), (e) or (f) because the corporation, or another corporation or other corporations, held certain assets on a particular date - the value of those assets on that date, determined in accordance with section 13, does not exceed the amount ascertained in accordance with regulations made for the purposes of this paragraph.

(2) A prescribed foreign government investor is covered by this subsection in relation to a business if the value of the total assets of the business, determined under section 13B, does not exceed the amount ascertained in accordance with regulations made for the purposes of this subsection.

(3) Regulations made for the purposes of a particular provision of this section may provide for different amounts for different prescribed foreign government investors, depending on all or any of the following:

(a) the kind of prescribed foreign government investor concerned;

(b) in relation to subsection (1) - the kind of corporation concerned;

(c) in relation to subsection (2) - the kind of business concerned;

(d) any other matter.

(4) Regulations made for the purposes of a particular provision of this section may provide for a method for indexing an amount.

(5) Subsections (3) and (4) do not limit the regulations that may be made for the purposes of this section.

17D Exempt foreign investments in financial sector companies etc.

(1) Section 18 applies in relation to a financial sector company as if a prescribed foreign investor covered by subsection (3) were not a foreign person for the purposes of that section.

(2) Section 26 applies in relation to a financial sector company as if a prescribed foreign investor covered by subsection (3) were not a person covered by that section.

(3) A prescribed foreign investor is covered by this subsection if the conditions specified in the regulations are satisfied in relation to the prescribed foreign investor.

(4) In applying section 18 or 26 in relation to an entity that is not a prescribed foreign investor covered by subsection (3), do not apply subsection (1) or (2) for the purposes of:

(a) determining whether 2 or more persons (whether or not those persons are associates) hold an aggregate controlling interest in a corporation; or

(b) determining whether 2 or more persons (whether or not those persons are associates) together are in a position to control an amount of the voting power in a corporation; or

(c) determining whether 2 or more persons (whether or not those persons are associates) together hold interests in the issued shares in a corporation; or

(d) determining whether 2 or more persons (whether or not those persons are associates) together are in a position to determine the policy of a business or corporation.

(5) In this section:

financial sector company has the same meaning as in the Financial Sector (Shareholdings) Act 1998.

17E Prescribed foreign investor

(1) An entity is a prescribed foreign investor if:

(a) the conditions specified in the regulations are satisfied in relation to the entity; and

(b) the entity is not a foreign government investor.

(2) The conditions specified in the regulations for the purposes of subsection (1) may include any or all of the following kinds of conditions:

(a) a condition that the entity be a national of a specified foreign country;

(b) a condition that the entity be incorporated under the law of a specified foreign country, or a specified part of a foreign country;

(c) a condition that the entity be constituted or organised under the law of a specified foreign country, or a specified part of a foreign country.

Note: For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003.

(3) Subsection (2) does not limit the regulations that may be made for the purposes of subsection (1).

(4) In this section:

entity includes an individual.

17F Foreign government investor

An entity is a foreign government investor if:

(a) the entity is:

(i) a body politic of a foreign country; or

(ii) a body politic of part of a foreign country; or

(iii) a part of a body politic mentioned in subparagraph (i) or (ii); or

(b) the entity is controlled by an entity mentioned in paragraph (a); or

(c) an entity mentioned in paragraph (a) holds an interest in the entity that satisfies the conditions specified in the regulations.

17G Prescribed foreign government investor

An entity is a prescribed foreign government investor if:

(a) the entity is a foreign government investor; and

(b) the conditions specified in the regulations are satisfied in relation to the entity.

17H Prescribed sensitive sector

A kind of business activity is a prescribed sensitive sector in relation to a prescribed foreign investor if:

(a) the conditions specified in the regulations are satisfied in relation to the prescribed foreign investor; and

(b) the conditions specified in the regulations are satisfied in relation to the kind of business activity.