Order under Subsection 68(1) - Yin-Chen Tseng and Shu-Shan Tsen

Overview

The Foreign Acquisitions and Takeovers Act 1975, enacted by the Australian Parliament, was established to address concerns over the potential adverse impacts of foreign acquisitions and takeovers on national security, foreign investment, and the Australian economy. This Act provides the Treasurer with the authority to review and regulate foreign acquisitions of Australian land and interests in Australian businesses. The underlying policy objective of the Act is to safeguard Australia’s national security and economic interests by ensuring that foreign investments are beneficial and do not pose a risk to the nation. In this instance, the Act was invoked to prohibit the acquisition of Australian land by foreign persons Yin-Chen Tseng and Shu-Shan Tseng, reflecting the government's commitment to carefully scrutinise and manage foreign investment activities that could affect national security or economic stability.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 is an Australian legislative instrument designed to regulate the acquisition of Australian assets by foreign persons, including individuals, entities, and foreign governments. This Act applies to transactions that involve the acquisition of Australian land or an interest in an Australian business, aiming to prevent or control acquisitions that could be detrimental to Australia's national security or economic interests. The Act's jurisdiction extends across the Commonwealth, thereby encompassing all states and territories within Australia. The Act's application is not limited by specific thresholds and can cover a broad range of industries and types of assets, including land, shares, and business entities. However, the Act provides certain exemptions, such as for small-value acquisitions and acquisitions by entities from countries with which Australia has a specific foreign investment arrangement. Additionally, the Act can be extended or restricted through subordinate instruments, allowing the government to adapt the legislation to evolving economic and security considerations. In this particular case, the order issued under subsection 68(1) of the Act temporarily prohibits the proposed acquisition of an Australian land by two foreign persons for a period of 90 days, pending further review and consideration by the relevant authorities.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975, as evidenced by the Order under subsection 68(1) (Gazette), addresses the acquisition of Australian assets by foreign entities or individuals. Specifically, section 68(1) empowers the Treasurer to delegate the authority to prohibit certain acquisitions. In this case, the Senior Adviser from the Foreign Investment and Trade Policy Division of the Department of the Treasury, Kathryn Dolan, has exercised this delegation to prohibit the proposed acquisition of land at 42 Relowe Crescent, Balwyn, Victoria, by Yin-Chen Tseng and Shu-Shan Tseng. This prohibition is a temporary measure, effective for 90 days from the date of publication in the Gazette. Under this legislation, foreign persons such as Yin-Chen Tseng and Shu-Shan Tseng must notify the Treasurer before acquiring any interest in Australian land. The notification triggers a review process to determine if the acquisition aligns with national security and other relevant considerations. In this instance, the proposed acquisition was notified on 27 November 2015, and the Treasurer’s delegate has subsequently issued a prohibition order, indicating concerns that warrant further scrutiny. The Act imposes several obligations on the parties involved in foreign acquisitions. Foreign persons must provide detailed information regarding the acquisition, including the nature of the assets, the identity of the parties, and the reasons for the acquisition. The Treasurer, through their delegate, is required to review these notifications and make a determination within a specified timeframe. If the Treasurer believes that the acquisition may be contrary to the national interest, they can issue a prohibition order to halt the transaction temporarily. Failure to comply with the requirements of the Act, such as providing the necessary notification, can lead to significant consequences. Under section 127 of the Act, an unauthorised acquisition is itself an offence. Additionally, any person who contravenes the Act or an order made under it can face civil or criminal penalties. Specifically, for contravening a prohibition order, the maximum penalty is 10,000 penalty units or imprisonment for five years, or both, reflecting the seriousness with which the Australian government views potential threats to national security through foreign acquisitions.