Update on Overseas Investment Amendment Bill
Thanks to the team at Todd & Walker for this update
The Overseas Investment Amendment Bill is currently going through the Committee of the Whole House stage which we expect will be completed this week.
Some recommendations have been made to the Bill during this process. These are mainly administrative but there has been some more clarity around the exemptions that the Minster will be able to grant. We have summarised this new exemption regime below.
Once the Committee of the Whole House stage is completed the Bill will go to the third, and final, reading. We don’t know when this will be yet but will send out an update once we know.
The Bill will come into force 2 months after it gets Royal Assent.
New Exemption Regime under the Overseas Investment Amendment Bill
New sections 61B to 61F are to be added to the Overseas Investment Act which give the Minister power to grant exemptions for a specific transaction or individual or for classes of transactions and individuals.
The power to make exemptions is to ensure that the Act does not have unintended consequences and/or imposes compliance requirements which are "impractical, inefficient and unduly burdensome".
Exemption will be able to be obtained via an individual application for an exemption or the inclusion of an exemption in the regulations. Exemptions may be made subject to conditions and may be amended or revoked by the Minster.
These new sections include the criteria that the Minister will take into account in granting an exemption. An exemption will be granted if the Minister considers the circumstances mean it is “necessary, appropriate or desirable to provide an exemption” and where the extent of the exemption is not broader than is reasonably necessary.
In making its decision to grant an exemption, the specific criteria the Minister is to consider includes:
- The purpose of the Act.
- The extent to which effective ownership or control is changed by the overseas investment or remains with persons who are not overseas persons;
- The extent to which a sensitive asset is already held in overseas ownership or control;
- The extent to which the acquisition is the result of the operation of other legislation or an event outside the control of the overseas person;
- The extent of time an overseas person is likely to have ownership or control of a right or an interest, for what purpose, and the likely impact on the sensitive asset of that overseas ownership or control; and
- Any other factors that seem to the Minister to be relevant.
Thanks to Todd & Walker for this post