In response to the severe economic implications of the COVID-19 crisis, the Australian Government has announced temporary changes to Australia’s foreign investment framework
The following changes took effect from 10:30pm AEDT, 29 March 2020 (Effective Date):
the monetary screening thresholds for all foreign investments under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (Act) have been reduced to $0;
the Foreign Investment Review Board (FIRB) will be extending its statutory review deadline from 30 days to up to 6 months to allow sufficient time to review and process all foreign investment approval applications; and
the FIRB will prioritise urgent applications for investments that directly protect and support Australian businesses and jobs.
The new measures do not change the meaning of a ‘significant action’ or a ‘notifiable action’ under the Act. However, the measures affect the monetary threshold component of those definitions.
Prior to the Effective Date, there were already a range of proposed acquisitions that were subject to $0 thresholds under the existing rules, for example all acquisitions by foreign government investors and residential land proposals.
Under the changes all proposed foreign acquisitions into Australia subject to the Act will now be considered a ‘notifiable action’, regardless of the value of the investment, and require approval from the Treasurer before the action can be taken. From a property perspective, the blanket $0 threshold will most significantly impact acquisitions of interests in developed commercial land. Previously these acquisitions had a monetary threshold of $275 million (unless the proposed acquisition was considered to be sensitive,1 in which case the threshold was $60 million, or by a privately owned investor from one of Australia’s free trade agreement partner countries or regions,2 in which case the threshold was $1,192 million), and so only a very small percentage of these transactions in Western Australia required approval.
These changes also extend to investments in Australian agricultural land, which were previously subject to a minimum cumulative threshold of $15 million.
The $0 threshold will only apply to agreements entered into after the changes were announced. That is, the changes will not apply to agreements for the acquisition of Australian assets entered into prior to the Effective Date, including in relation to those acquisitions that have not yet occurred, regardless of whether there are unmet conditions or not.
As a result of the reduction to all monetary screening thresholds, the FIRB expects to receive a high volume of applications. New applicants as well as those with applications currently in the screening process, should expect the decision period for your foreign investment application involving significant actions and/or exemption certificates to extend beyond the 30 day period provided under the Act to make a determination. 3
An ‘urgent application’ will be determined on a case by case basis.
Priority will be given to urgent applications for investments that directly protect and support Australian businesses and Australian jobs, taking account of any commercial deadlines related to the proposed investment.
If your application has any commercial imperatives or broader economic impacts for Australia or if there are any commercial deadlines related to your proposed investment, evidence supporting these facts should be submitted together with your application. For those applications currently in the screening process, this evidence should be submitted to your FIRB case officer, along with your FIRB case number, as soon as practicable.
In light of the changes to Australia’s foreign investment framework, parties to real estate transactions should be alive to the following issues:
We expect that further information will be released in due course on the legislative regime that will underpin the monetary threshold changes. In the meantime, please contact us if you wish to discuss how these changes may impact your proposed transaction or if you require assistance amending or preparing a sale contract to capture these changes.
 Sensitive businesses include media; telecommunications; transport; defence and military related industries and activities; encryption and securities technologies and communications systems; and the extraction of uranium or plutonium; or the operation of nuclear facilities (see section 52(6) of the Foreign Acquisitions and Takeovers Regulations 2015 (Cth) (Regulations).
 Australia’s free trade agreement country or region investors are those from the United States of America, New Zealand, Chile, Japan, the Republic of Korea, China, Singapore, a country (other than Australia) for which the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership, done at Santiago on 8 March 2018, is in force (CPTPP) (as at 1 January 2020, the CPTPP is in force for: Canada, Japan, Mexico, New Zealand, Singapore and Vietnam), and the region of Hong Kong, China.
 Section 60, Regulations.