Order Under Subsection 21A(2) - Mohammad Saeid Khorram

Overview

The Foreign Acquisitions and Takeovers Act 1975, enacted by the Parliament of Australia, was established to address the need for regulating foreign acquisitions and takeovers to protect Australia's national security and economic interests. This Act was introduced to fill a legislative gap concerning the oversight and control of significant acquisitions by foreign entities that could potentially compromise national security or economic stability. The policy objective of the Act is to ensure that foreign acquisitions and takeovers are assessed to prevent any actions that could be detrimental to Australia's interests. In light of these objectives, the Treasurer, under the authority conferred by the Act, has the power to prohibit certain acquisitions if they are deemed contrary to the national interest. This power was exercised in the case of Mohammad Saeid Khorram, who proposed to acquire an interest in Australian urban land, a transaction that was subsequently prohibited due to its potential adverse impact on national security. This demonstrates the Act's role in safeguarding Australia's critical assets and interests from potentially harmful foreign influence.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to any foreign person who wishes to acquire an interest in Australian assets, including land, businesses, and significant shares in Australian companies. This Act covers acquisitions that are deemed contrary to Australia's national security or economic interests. The Act's jurisdiction extends across the Commonwealth, ensuring a unified approach to reviewing and regulating foreign acquisitions. The scope of the Act includes any proposed transactions that meet the threshold criteria, which are typically assessed based on the value and nature of the assets involved. There are exclusions and exemptions, such as transactions below a specified monetary threshold, which are detailed in the Act and its regulations. The application of the Act can be extended or restricted through subordinate instruments, allowing for adjustments to the thresholds or categories of acquisitions subject to scrutiny. In the case of Mohammad Saeid Khorram's proposed acquisition of urban land in Canterbury, Victoria, the Treasurer has prohibited the transaction on the grounds that it would be contrary to the national interest.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (Act) governs the acquisition of interests in Australian assets by foreign persons and entities, with significant implications for national security and economic interests. Section 21A(2) of the Act allows the Treasurer to prohibit certain acquisitions if they are deemed contrary to the national interest. In this specific instance, the Treasurer, Scott Morrison, has exercised his authority to prohibit Mohammad Saeid Khorram, a foreign person, from acquiring an interest in Australian urban land at 315 – 317 Canterbury Road, Canterbury, Victoria, 3126. This prohibition is based on the belief that the acquisition would be contrary to the national interest, as stated in the order issued on 2015. Under the Act, foreign persons are required to notify the Treasurer of their intention to acquire an interest in Australian assets, as outlined in section 26A. This notification must include detailed information about the proposed acquisition. In this case, Mohammad Saeid Khorram furnished the required notice on 8 July 2015. The Treasurer's power to prohibit an acquisition under section 21A(2) hinges on whether the acquisition meets the criteria of being contrary to the national interest. The obligations imposed on foreign persons include timely and accurate notification, ensuring transparency and allowing the Treasurer to assess the implications of the proposed acquisition. Failure to comply with the provisions of the Act, including the notification requirements, can lead to significant legal consequences. Section 21A(3) of the Act stipulates that any person who contravenes a prohibition order can face civil or criminal penalties. The specific penalties can vary, but under section 138 of the Act, the maximum penalty for civil contraventions can include substantial fines, while criminal contraventions can lead to imprisonment and additional fines. These stringent measures underscore the importance of adhering to the Act's requirements to avoid severe repercussions.