The Business Council of Australia welcomes the opportunity to make a submission to the Treasury on the exposure draft of the Foreign Investment Reform (Protecting Australia’s National Security) Bill 2020. This submission reflects member views on the proposed changes and broader aspects of the investment screening framework.
The Business Council recognises the need to strengthen the foreign investment framework where there are risks to national security. The challenge is to achieve this while remaining globally competitive and able to attract foreign investment. It is a balancing act which is compounded by the unprecedent global downturn induced by the COVID economic shock. The Government needs to carefully consider the extent to which the system will accelerate or unintentionally constrain recovery.
Our key recommends include:
- Streamlining the Foreign Investment Review Board (FIRB) system for non-sensitive cases by introducing a registration process, rather than substantive approval process, for non-sensitive transactions, and removing some transactions from the regulatory net altogether;
- Getting the balance right between retaining the broad, discretionary scope of what transactions are caught in FIRB’s net, and the imposition of harsher penalties, robust compliance, monitoring and enforcement powers;
- Including a prescribed list (what’s covered) approach to ‘national security’ and ‘national security businesses’;
- Clearly defining and narrowing the scope of a ‘national security concern’ for the exercise of the ‘call-in’ power;
- Introducing improved safeguards around the ‘last resort’ power;
- Retaining 30-day processing times;
- Boosting FIRB resourcing, financed by a strict fee-for-service model.