Foreign Acquisitions and Takeovers (GetSwift Technologies Limited) Interim Order 2020

Overview

The Foreign Acquisitions and Takeovers Act 1975 (the Act) was enacted to regulate and control foreign acquisitions of Australian businesses and assets, with a view to ensuring that such acquisitions are not detrimental to Australia's national security or economic interests. The Act empowers the Treasurer to prohibit or approve foreign acquisitions and takeovers, providing a mechanism for the assessment of transactions on the basis of national security and other relevant considerations. The Foreign Acquisitions and Takeovers (GetSwift Technologies Limited) Interim Order 2020 was made under the authority of the Act to address the proposed acquisition of GetSwift Limited by GetSwift Technologies Limited, a foreign entity. The interim order was issued by David Woods, as a delegate of the Treasurer, to prohibit the acquisition until 1 January 2021, allowing for further assessment of the potential implications for Australia's national security and economic interests. This demonstrates the Act's role in safeguarding Australia's interests in the context of foreign investments.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to any acquisition of control of an Australian entity by foreign persons and certain significant transactions, with the aim of regulating foreign investment to protect national security and other important interests. The Act applies to transactions where a foreign person seeks to acquire an interest in an Australian entity, including shares, voting rights, or control. The geographic reach of the Act is national, as it pertains to acquisitions of Australian entities by foreign persons, regardless of where those persons are based. The Act also extends its application through subordinate instruments such as the Foreign Acquisitions and Takeovers (GetSwift Technologies Limited) Interim Order 2020, which was made to temporarily prohibit a proposed acquisition by GetSwift Technologies Limited of GetSwift Limited. The order demonstrates the Act's capacity to intervene in specific cases to ensure the protection of national interests. There are various exclusions and thresholds defined within the Act, such as certain low-value transactions that do not require notification or approval.

Key Provisions

The main operative sections of the Foreign Acquisitions and Takeovers (GetSwift Technologies Limited) Interim Order 2020 (subsection 68(1) of the Foreign Acquisitions and Takeovers Act 1975) prohibit the proposed acquisition of GetSwift Technologies Limited by GetSwift Technologies Limited for the period ending on 1 January 2021. This prohibition is put in place as a precautionary measure while the Treasurer considers whether to make an order under section 67 of the Act. The prohibition applies to the acquisition of up to a 100 per cent interest in GetSwift Limited by GetSwift Technologies Limited, which was notified to the Treasurer on 4 September 2020. The Act imposes several obligations and requirements on the parties involved. Firstly, GetSwift Technologies Limited must refrain from completing the acquisition until the prohibition period expires or the Treasurer makes a final determination. Secondly, the Treasurer must consider the implications of the acquisition on national security and foreign policy, as well as any other relevant factors. During this period, GetSwift Technologies Limited may be required to provide additional information to the Treasurer to assist in this assessment. Furthermore, the Treasurer may consult with other government agencies and stakeholders to gather further insights into the potential impact of the acquisition. There are potential consequences for non-compliance with the Act or the interim order. If GetSwift Technologies Limited proceeds with the acquisition in breach of the interim order, it could face civil or criminal penalties. The Act provides for fines of up to $10 million for individuals and $100 million for bodies corporate, as well as potential imprisonment for serious breaches. Additionally, the Treasurer may seek an injunction or other court orders to prevent or unwind the acquisition if it poses a risk to national security or foreign policy. It is important for GetSwift Technologies Limited to comply with the interim order and cooperate with the Treasurer to avoid these adverse outcomes.