Foreign Acquisitions and Takeovers Regulation 2015 (Cth)

PART 5 - SIGNIFICANT ACTIONS AND NOTIFIABLE ACTIONS  

Division 2 - Prescribing significant actions and notifiable actions  

SECTION 56   ACTIONS BY FOREIGN GOVERNMENT INVESTORS  

56(1)    
An action is a significant action and a notifiable action if the action is a foreign government investor:

(a)    acquiring a direct interest in an Australian entity or Australian business; or

(b)    starting an Australian business; or

(c)    acquiring:

(i) a legal or equitable interest in a tenement; or

(ii) an interest of at least 10% in securities in a mining, production or exploration entity.

56(2)    
A person acquires an interest in a tenement even if:

(a)    the person has previously acquired an interest in a tenement; or

(b)    the interest is an increase in the amount of an existing interest of the person in a tenement.

Note: Not all interests in tenements are interests in Australian land. A similar rule applies in relation to interests in Australian land (see subsection 12(3) of the Act).

Exception - subsidiaries of foreign government investors

56(3)    
Paragraph (1)(a) does not apply in relation to an acquisition of a direct interest in an Australian entity by a foreign government investor if the foreign government investor acquires the direct interest in the Australian entity by establishing a new wholly-owned subsidiary.

Exception - non-material interests in businesses that are not sensitive businesses or national security businesses

56(4)    
Paragraph (1)(a) does not apply in relation to an acquisition of a direct interest in an Australian entity by a foreign government investor if:

(a)    the foreign government investor acquires the direct interest in the Australian entity by acquiring an interest in securities in a foreign entity; and

(b)    

the total asset value for the foreign entity is less than 5% of the value of the total assets of that entity; and

(c)    

the total asset value is less than $60 million; and

(d)    

none of the assets taken into account in working out the total asset value are assets of a sensitive business or a national security business.

Note 1: The total asset value only takes into account assets in Australia (see section 20 ). The total assets of the entity mentioned in paragraph (4)(b) may include assets that are outside Australia.

Note 2: The total asset value prescribed by paragraph 56(4)(c) is indexed under section 58 .

Exception - acquisition of initial interest by entity established by consortium

56(5)    

Paragraph (1)(a) does not apply in relation to an acquisition of an initial direct interest in an Australian entity by a foreign government investor if the entity is established by one or more persons for the purposes of the entity making a later acquisition that is a significant action and a notifiable action.

Exception - increasing percentage of interests without acquiring additional interests in securities

56(6)    

Paragraph (1)(a) does not apply in relation to an acquisition of a direct interest in an Australian entity that is taken to occur because of the operation of section 18A of the Act if the foreign government investor held a direct interest in the entity immediately before the acquisition occurred.

56(7)    

Subparagraph (1)(c)(ii) does not apply in relation to an acquisition of an interest in securities in a mining, production or exploration entity that is taken to occur because of the operation of section 18A of the Act if the foreign government investor held an interest of 10% or more in securities in the entity immediately before the acquisition occurred.