Order under subsection 69(2) - Disposal of Interest - 80 Corrimal Street, Wollongong NSW

Overview

The Foreign Acquisitions and Takeovers Act 1975 (FATA) was enacted to safeguard Australia's national security and economic interests by regulating foreign acquisitions of Australian businesses and assets. This legislation was introduced to address the problem of potentially harmful foreign acquisitions that could negatively impact the national interest. The Act empowers the Treasurer to intervene in acquisitions that are deemed contrary to the national security or economic interests of Australia. The FATA is administered by the Parliament of Australia, which established this framework to ensure that foreign investments are thoroughly assessed for their implications on national security and economic stability. The policy objective of the FATA is to maintain a balance between facilitating foreign investment and protecting Australia's strategic assets and interests. In 2018, an order was made under the FATA to direct Daqin Shen to dispose of his interest in Australian land situated at Lot 4 in Deposited Plan 154460, known as 80 Corrimal St, Wollongong, NSW. This order was issued by Simon Hellmers, acting Assistant Commissioner at the Australian Taxation Office, based on the satisfaction that the acquisition of the land was contrary to the national interest. The order mandates the disposal of the interest within three months from the commencement of the order, ensuring that the land is transferred to a non-associate entity. This action underscores the commitment of the Australian government to enforce the provisions of the FATA and safeguard the nation's interests against potentially detrimental foreign acquisitions.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 (FATA) applies to any foreign person who seeks to acquire an interest in Australian land or businesses, including any associated entities. This Act governs transactions that may be considered contrary to the national security or national interest of Australia, with a particular focus on foreign acquisitions of Australian land, takeovers of Australian businesses, and certain foreign investments in Australia. The legislation operates on a national level and applies across all states and territories of Australia, thereby ensuring consistent oversight of foreign acquisitions that might pose a risk to national security. The Act may extend its application through subordinate instruments, such as regulations and notifications, to provide further detail or clarification on specific types of acquisitions or entities. However, certain exclusions and exemptions may apply, such as for acquisitions under a specific monetary threshold or those deemed not to impact national security. This order specifically targets Daqin Shen’s acquisition of an interest in Australian urban land, deeming it contrary to the national interest and mandating the disposal of that interest within a stipulated timeframe.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (FATA) is the legislation under which this order is made, with key provisions found in sections 21A, 43, and 69(2). Section 21A(4) of the FATA allows the Treasurer to make an order where a foreign person has acquired an interest in Australian land contrary to the national interest. Section 43 defines what constitutes a significant action for the purposes of the Act, while section 69(2) provides for the making of orders by the Treasurer, in this case, the Acting Assistant Commissioner at the Australian Taxation Office. Under this order, Daqin Shen is required to dispose of his interest in the specified Australian land, located at 80 Corrimal St, Wollongong, NSW, to one or more persons who are not his associates. This disposal must occur by midnight (Canberra time) three months from the date the order commences. The order, which is registered on the Federal Register of Legislation, will commence 30 days after its registration. The Act imposes several obligations on Daqin Shen, including the timely disposal of his interest in the land as per the order. This disposal must be completed in accordance with the specified timeframe, and to parties who are not associates of Daqin Shen. The Act also requires compliance with the conditions stipulated in the order, which in this case is the disposal of the land interest within three months from the order's commencement. Breach of the order made under section 69(2) of the FATA may result in civil and criminal consequences. While the specific penalties for breach are not outlined in the text, the FATA generally provides for fines and imprisonment for contraventions. The maximum penalties for offences under the FATA can include fines of up to 10,000 penalty units (currently AUD 1.7 million) for individuals and 50,000 penalty units (currently AUD 8.5 million) for bodies corporate, as well as imprisonment for up to five years. The seriousness of the breach and the discretion of the court will influence the actual penalties imposed.