Order under subsection 69(2)

Overview

The Foreign Acquisitions and Takeovers Act 1975 (FATA) was enacted to protect Australia’s national security and economic interests by regulating foreign acquisitions of Australian assets. This Act empowers the Treasurer to assess and, if necessary, intervene in significant foreign acquisitions that could be detrimental to the national interest. The FATA was introduced to address the problem of foreign entities acquiring Australian assets without adequate scrutiny, which could potentially compromise national security or economic stability. The policy objective of the Act is to ensure that acquisitions of Australian assets by foreign entities are subject to appropriate levels of review and oversight. In this context, the Australian Taxation Office, under the authority of the Treasurer, exercises its powers to make orders under the FATA. In this specific instance, Evergreen Developments Pty Ltd, a foreign entity, acquired an interest in Australian urban land before December 2015, an acquisition deemed contrary to the national interest. Consequently, an order has been made directing Evergreen Developments Pty Ltd to dispose of its interest in the specified land within six months to a person or persons who are not their associates. This order reflects the legislative intent to mitigate potential risks associated with foreign acquisitions of Australian assets.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to foreign persons or entities seeking to acquire an interest in Australian assets, including land, businesses, and shares. The Act is designed to protect Australia's national security and economic interests by regulating foreign acquisitions and takeovers. The Act applies to acquisitions that occur after the commencement of the order and involves interests in Australian land, such as the urban land at 100 Spring Road, Thornlie, WA. The geographic reach of the Act is national, applying to acquisitions by foreign persons or entities across all states and territories of Australia. The Act includes certain exclusions and thresholds, such as the size and value of the assets, and the nationality of the acquirer. The Act can also extend or restrict its application through subordinate instruments, allowing for adjustments based on changing circumstances or national interests. This order specifically applies to Evergreen Developments Pty Ltd, directing them to dispose of their interest in the specified Australian land within six months of the order's commencement, ensuring compliance with national security and economic interests.

Key Provisions

This order, made under subsection 69(2) of the Foreign Acquisitions and Takeovers Act 1975 (FATA), pertains to Evergreen Developments Pty Ltd's acquisition of an interest in Australian land, specifically Lot 16 on Plan 8723 at Thornlie, known as 100 Spring Road, Thornlie, WA, 6108. The order directs Evergreen Developments Pty Ltd to dispose of this interest within six months from the commencement of the order, which occurs 30 days after it is registered on the Federal Register of Legislation (subsection 69(2)). The directive is to sell the interest to one or more persons who are not associates of Evergreen Developments Pty Ltd. Under the FATA, certain acquisitions of interests in Australian land by foreign entities are subject to scrutiny, particularly if they are deemed contrary to the national interest. In this case, the acquisition by Evergreen Developments Pty Ltd, a foreign entity, of an interest in Australian urban land is considered a significant action taken before 1 December 2015. The Acting Assistant Commissioner, Jennifer Farley, has determined that this acquisition was contrary to the national interest based on specific criteria outlined in the legislation, including item 6(1) of Schedule 3 to the Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 and section 43 of the FATA. The obligations imposed by this order are clear: Evergreen Developments Pty Ltd must divest its interest in the specified land to non-associates within the stipulated timeframe. This requirement is intended to mitigate any perceived threat to national security or other interests arising from the foreign entity's control over the land. The order's commencement is tied to its registration on the Federal Register of Legislation, ensuring transparency and legal effect. The FATA also includes provisions for enforcement and penalties. Breaches of the Act, including failure to comply with orders such as this one, can result in substantial penalties. While specific penalties for non-compliance with this order are not detailed in the notifiable instrument, general provisions within the FATA include fines of up to $10 million for companies and $1.5 million for individuals for contraventions of the Act (section 118). Additionally, directors or officers found in breach may face disqualification from managing corporations (section 1317J). These severe consequences underscore the importance of adhering to the requirements set out in the order.