June 5, 2020 / 5:07 AM / a month ago

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

SYDNEY (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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