ByMalcolm Brennan and Alison Black  King & Wood Mallesons’Canberra Office

Tbrennan_mhe Treasurer, through the Foreign Investment Review Board (FIRB), has been given additional power to scrutinise the sale of critical infrastructure assets to private foreign investors, with a clear focus on national security.

The changes to the Foreign Acquisition and Takeovers Regulation 2015 will impact all non-government related foreign investors seeking to invest in any level of Australian government-owned infrastructure assets including: airports; ports; electricity, gas, water and sewerage systems; roads; railways; inter-modal transfer facilities; telecommunications networks; and nuclear facilities (Critical Infrastructure Assets).

Previously, foreign private investors did not need FIRB approval to acquire an interest in Australian land from the Commonwealth, a State or a Territory or even a local government. Now the scope of this exemption is much narrower. Investors will not be exempt from FIRB scrutiny when acquiring an interest from government entities of interests in land or assets comprising:

  • Critical Infrastructure Assets; or
  • an Australian business, which holds interests in Critical Infrastructure Assets.

Foreign government investors never had the benefit of this exception, and this remains unchanged. Also, there was never an exemption for the acquisition from government entities of interests in Corporations Act entities and this position continues.

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