Order under Subsection 68(1) - Lihua Liang

Overview

The Foreign Acquisitions and Takeovers Act 1975 was enacted to provide the Australian government with the power to review and, where necessary, regulate foreign acquisitions of Australian assets. This legislation was introduced to address the growing concerns over foreign influence on critical industries and national security. The Act empowers the Treasurer to prohibit or impose conditions on acquisitions by foreign persons or entities that are contrary to Australia's national security or contrary to the public interest. The enacting body was the Commonwealth Parliament, and the policy objective is to ensure that foreign investment aligns with Australia's economic and national security interests. The order under subsection 68(1) of the Act, as demonstrated in the case of Lihua Liang's proposed acquisition of land in Glen Waverly, Victoria, is a direct application of this legislative framework to safeguard Australian assets from potentially harmful foreign influence.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to foreign persons who propose to acquire interests in Australian land, businesses, and other assets, thereby regulating foreign investment in Australia. This Act encompasses both direct acquisitions by foreign persons and indirect acquisitions through entities controlled by foreign persons. The Act’s jurisdictional reach is national, extending across all states and territories of Australia, thereby applying uniformly throughout the Commonwealth. The Act allows the Treasurer to prohibit or impose conditions on proposed acquisitions if they are deemed not to be in the national interest, with specific consideration given to national security, foreign policy, and the economic order. The Act includes mechanisms for reviewing and varying its application through subordinate instruments, enabling the Treasurer to respond to evolving economic conditions and national interests. This specific order, issued under subsection 68(1) by Kathryn Dolan, a delegate of the Treasurer, temporarily prohibits Lihua Liang from acquiring an interest in the Australian land specified in the notice, reflecting the Act's function in safeguarding Australia's strategic and economic interests.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (the Act) contains several key sections relevant to the proposed acquisition of Australian land by Lihua Liang, a foreign person. Under section 67, the Treasurer can prohibit a proposed acquisition if it is not in the national interest, while section 68 allows the Treasurer to delegate their power to prohibit to another individual, as seen with Kathryn Dolan in this case. Section 68(1) specifically authorises the delegate to make an order prohibiting the acquisition, which is the action taken here. This prohibition is effective for a specified period, in this instance, 90 days from the date of publication in the Gazette (sections 67(1) and 68(2)). The Act imposes several obligations and requirements on the parties involved in the proposed acquisition. Lihua Liang, as the foreign person seeking to acquire an interest in Australian land, must notify the Treasurer of his intention to acquire under section 65. This notification triggers the review process under the Act and must include details of the proposed acquisition. The Treasurer, or their delegate, then has the responsibility to consider whether the proposed acquisition is contrary to the national interest and to make an order if necessary. In this case, Kathryn Dolan, acting as the delegate, has made an order prohibiting the acquisition. The Act also outlines specific offences, penalties, and consequences for breaches of its provisions. For instance, section 125 provides that any person who contravenes or fails to comply with an order made under the Act is liable to a penalty. The maximum penalty for an individual contravening a prohibition order is 500 penalty units, which as of 2023, equates to AUD 111,000. Additionally, a corporation can be fined up to 5,000 penalty units, or AUD 1,110,000, for such breaches. These penalties serve as a deterrent to non-compliance and reinforce the seriousness with which the Australian government regards foreign acquisitions that may threaten the national interest. Furthermore, the prohibition order itself can be enforced through legal action, and continued contravention can lead to additional criminal or civil penalties.