Order under Subsection 68(1) - Long Dang and Xiaoling Qiu

Overview

The Foreign Acquisitions and Takeovers Act 1975 was enacted by the Australian Parliament to address the need for regulation of foreign investment in Australian assets, particularly in relation to national security and economic interests. The Act provides the Commonwealth Government with the authority to review and, if necessary, prohibit acquisitions of Australian assets by foreign persons if such acquisitions are deemed to be against the national interest. This legislative framework was established to safeguard critical infrastructure, sensitive technology, and other assets that are vital to Australia’s economic and national security. The policy objective underpinning the Act is to ensure that significant foreign investments are assessed to mitigate potential risks to Australia’s sovereignty and economic well-being. In the context of the provided document, the Foreign Acquisitions and Takeovers Act 1975 is utilised to prohibit the proposed acquisition of Australian land by Long Dang and Xiaoling Qiu, pending a further review by the relevant authorities.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to any foreign person seeking to acquire an interest in Australian land, including individuals, entities, and partnerships, with a focus on transactions that may impact national security, foreign investment, or the economy. The Act has a broad jurisdictional reach, applying across the Commonwealth of Australia and encompassing all states and territories, ensuring a consistent approach to the scrutiny of foreign acquisitions and takeovers. While the Act is designed to cover a wide range of acquisitions, certain exclusions and exemptions exist, such as transactions below the national security or foreign investment thresholds, and acquisitions by foreign governments and international organisations under specified circumstances. The Act also allows for the extension and restriction of its application through subordinate instruments, enabling the Treasurer to adapt the legislation to evolving national interests and international conditions.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (the Act) contains provisions that govern the acquisition of interests in Australian assets by foreign persons. Section 67 of the Act empowers the Treasurer to prohibit a proposed acquisition if it is not in the national interest, while section 68(1) allows a delegate of the Treasurer to make such orders. In this context, section 68(1) provides the authority for the delegate to issue an order prohibiting a proposed acquisition, as seen in the Gazette notice issued by Kathryn Dolan, Senior Adviser in the Foreign Investment and Trade Policy Division of the Department of the Treasury, on 24 December 2015. The operative sections of the Act in this case are sections 67 and 68(1). Section 67 allows the Treasurer to prohibit an acquisition if it is determined that the acquisition would be contrary to national security or the national interest. Section 68(1) empowers the delegate of the Treasurer to make such orders, and this specific order prohibits Long Dang and Xiaoling Qiu from acquiring an interest in Australian land, specifically at Cambridge Unit 2.08/37 Shepherds Bay Nancarrow Ave, Meadowbank, NSW, 2114. This prohibition is effective for 90 days from the date of publication in the Gazette. Under the Act, the obligations imposed on parties or entities governed by the legislation include notifying the Treasurer of any proposed acquisitions that meet the criteria for foreign acquisition. In this case, Long Dang and Xiaoling Qiu are required to notify the Treasurer under the Act before proceeding with their proposed acquisition of the Australian land. The obligations also include providing sufficient information to allow the Treasurer or their delegate to assess whether the acquisition would be contrary to national security or the national interest. Failure to comply with the provisions of the Act, including providing the required notification, can result in significant consequences. Section 76 of the Act outlines that a person who contravenes an order made under section 67 or 68 is liable to a civil penalty of up to 10,000 penalty units, which is currently equivalent to AUD 1.8 million. Additionally, section 79 of the Act stipulates that a person who contravenes a requirement to give notice under section 62 is liable to a civil penalty of up to 1,000 penalty units, currently AUD 180,000. These penalties highlight the seriousness with which the Act treats non-compliance and underscore the importance of adhering to its provisions.