On 29 March 2020, the Treasurer, Josh Frydenberg, announced several temporary changes to the foreign investment review framework in response to COVID-19.
For the duration of the COVID-19 crisis:
- all monetary screening thresholds under the Foreign Acquisitions and Takeovers Act 1975 (Cth) have been temporarily reduced to $0; and
- the standard 30-day review and decision-making timeframe is being extended by up to six months.
Due to all monetary thresholds being reduced to $0, from 29 March 2020 every purchase by a foreign person (including by a foreign corporation or government) of an interest in Australian agricultural land or of a 10% or more equity interest in an Australian agribusiness will require Foreign Investment Review Board (FIRB) approval, unless an exemption applies.
The changes will add another level of complexity to sales of agricultural land worth less than $15,000,000, being the former threshold below which FIRB approval was generally not required (although there were already situations in which the threshold was $0).
The parties to a transaction should carefully consider how FIRB requirements will affect the likely timing of the transaction and ensure the contract for sale makes adequate provision for the process.
Thynne + Macartney’s Agribusiness team specialises in transactions involving agricultural land.