Order under subsection 69(2) - Disposal of Interest - 6 Valentine Street, Delacombe, Victoria

Overview

The Foreign Acquisitions and Takeovers Act 1975 (FATA) was enacted by the Parliament of Australia to regulate and oversee foreign acquisitions of Australian assets, particularly those that may be detrimental to the national security or economic interests of the country. The Act was introduced to address the problem of foreign entities acquiring significant stakes in Australian businesses and land, which could potentially compromise national interests. The FATA provides the Treasurer with the authority to review and, if necessary, prohibit transactions that are deemed contrary to the national interest. In the case of Jiming Zhang's acquisition of an interest in Australian land, the Assistant Commissioner, Elizabeth Hardcastle, exercised powers under the FATA to order Zhang to dispose of his interest due to the perceived threat to national security, thereby ensuring compliance with the policy objective of protecting Australia’s economic and security interests from potentially harmful foreign acquisitions.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975, as demonstrated in this notifiable instrument, applies to foreign persons who acquire interests in Australian assets, particularly land, that are deemed significant and potentially contrary to the national interest. The Act, which is a Commonwealth law, has a broad jurisdictional reach across Australia and extends to any foreign person acquiring an interest in Australian land, regardless of the location within the country. This legislative instrument applies specifically to Jiming Zhang, who acquired an interest in Australian land at 6 Valentine Street, Delacombe, Victoria, in 2014. The order made under the Act mandates that Jiming Zhang dispose of his interest in the specified land to persons who are not his associates, within a specified timeframe, in response to a determination that the acquisition was contrary to the national interest. The Act does not explicitly state exclusions or exemptions, but it does allow for certain thresholds and conditions to be set out in subordinate instruments, thereby extending or restricting its application based on specific circumstances or additional criteria.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (FATA) outlines specific provisions for the regulation of foreign acquisitions of Australian assets, particularly those deemed to be contrary to the national interest. Under this act, significant actions taken before a certain date, in this case 1 December 2015, are closely scrutinised. Section 69(2) of the FATA allows for the making of an order where a foreign person's acquisition of an interest in Australian land is considered contrary to national interests. This is precisely what has been applied in the case of Jiming Zhang, who acquired an interest in land at 6 Valentine Street, Delacombe, Victoria in 2014. The order, made by Elizabeth Hardcastle, Assistant Commissioner at the Australian Taxation Office, mandates that Jiming Zhang dispose of his interest in the land within three months from the commencement of the order. This disposal must be to one or more persons who are not his associates, ensuring that the interest does not remain within a foreign entity or entities closely connected to the original acquirer. The order will take effect 30 days after it is registered on the Federal Register of Legislation, providing a clear timeline for compliance. The obligations imposed on Jiming Zhang are stringent. He must sell his interest in the specified Australian land to non-associated parties within the stipulated timeframe. Failure to comply with this directive can lead to severe consequences. The Act does not explicitly detail the penalties for non-compliance in this specific order; however, generally, breaches of FATA can result in civil penalties under section 135, which can include fines of up to $50,000 for individuals and $250,000 for corporations. Additionally, criminal penalties may apply, including fines of up to $100,000 for individuals and $500,000 for corporations, alongside potential imprisonment for serious breaches.