Paul Wentworth and Bree Taylor discuss recent changes by the Government to the Foreign Investment Review Board Guidelines.
On 1 February 2018, the Treasurer, Scott Morrison MP, announced significant changes to Australia’s foreign investment regime. The changes include:
The changes to the foreign investment regime were implemented through amendments to three of the Foreign Investment Review Board’s (FIRB) guidance notes, being:
Open and transparent sale process
The new ‘open and transparent sale process’ requirement is the most significant of the changes, and has been introduced to ensure that as part of the ‘national interest’ test, the Treasurer will consider whether Australians are afforded an opportunity to participate in sales involving agricultural land. Under these changes, foreign investors will only be able to acquire agricultural land where they can demonstrate there has been an open and transparent sale process. This requirement applies specifically in relation to acquisitions of agricultural land, but also more generally as a condition of approval by FIRB to a program of acquisitions of any type of land where the applicant is granted an exemption certificate (see Guidance Note 21).
In relation to agricultural land purchases, Guidance Note 17 states that an ‘open and transparent sale process’ requires that:
In applying to FIRB, a foreign person may be required to demonstrate that the sale was subject to an open and transparent sale process. In addition, foreign persons may be required to set out in detail how they became aware that the agricultural land or agribusiness was for sale. Although this is expressed as an obligation on applicants, sellers of agricultural land need to ensure that they have marketed their land in accordance with these guidelines or face the likelihood that any foreign purchaser of their land may not obtain FIRB approval.
There are a number of exemptions to the open and transparent sale process requirement for agricultural land purchases, including where: