June 5, 2020 / 4:41 AM / a month ago

FACTBOX-Australia's new foreign investment rules: What will change?

    SYDNEY, June 5 (Reuters) - Australia plans to give its
foreign investment regulator sweeping new powers to intervene in
all takeovers from overseas interests, citing security concerns.

    Below are the some of the proposed changes: 
    
    NEW RULES
    -- All bids for a sensitive national security business will
be screened, whether it is from a private entity or state-owned
one
    -- Treasurer will have the power to block any investment by
a foreign entity on national security grounds regardless of the
value of investment
    -- Treasurer can 'call in' an investment before, during or
after an acquisition for review if it raises national security
risks
    -- Treasurer can forcibly divest an approved deal if
national security risks emerge after the approval of the
transaction, though the last resort power is not retrospective,
and only applicable to future investments
        
    CURRENT RULES
    -- Only investments from foreign government-owned entities
are screened regardless of the value of the acquisition
    -- Private investments below A$275 million ($190.88
million)are not put under scrutiny 
    -- Investments up to A$1.2 billion ($832.92 million) made by
companies from countries that are in free trade agreements with
Australia such as United States, Japan and China are not
screened
    
    INDICATIVE TIMELINE FOR NEW FOREIGN INVESTMENT RULES 
     June 2020        Announcement of reforms
     July 2020        Release of draft law
     July-Aug 2020    Legislation consultation 
     Oct 6, 2020      2020-21 federal budget
     Oct 2020         Introduction and passage of law
     Jan 1, 2021      Commencement of new rules   
 ($1 = 1.4407 Australian dollars)

 (Reporting by Renju Jose; editing by Jane Wardell)
  
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