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- 16 -FOREIGN INVESTMENT REVIEW BOARDAND GENERAL FOREIGN INVESTMENT ISSUESCornwall StodartBackground to FIRBThe Foreign Investment Review Board (FIRB) is a non-statutory body established toadvise the federal government on foreign investment policy and its administration. Thepurpose of FIRB is to examine any proposal by foreign persons and governments toundertake direct investment in Australia (Proposal). FIRB then makes recommendationsto the government on whether such Proposals are suitable for approval under thegovernment’s policy.FIRB is advisoryFIRB provides only an advisory service to the federal government. It is the responsibilityof the federal Treasurer to decide on Proposals and the Treasurer is not obliged toaccept FIRB’s advice in making that decision.Foreign acquisitions and investment in AustraliaThe legal framework for foreign investment matters considered by FIRB is outlined in theForeign Acquisitions and Takeovers Act 1975 (FATA or Act). FATA regulates foreignpersons buying certain land interests, acquiring control of certain business enterprises,or acquiring mineral rights in Australia.Foreign governments and foreign persons proposing to invest in Australia may need toobtain prior approval before making a direct investment in Australia. Different monetarythresholds apply to US and New Zealand investors.Approvals of acquisitions or transactions required under the ActThe following Proposals require the prior approval of the Treasurer:• acquisitions of substantial interests in Australian businesses with total assets of$248 million or more ($1078 million for US and NZ investors) or if the Proposalvalues the business at $248 million or more ($1078 million for US and NZinvestors);• takeovers of offshore companies whose Australian subsidiaries or assets arevalued at $248 million or more ($1078 million for US and NZ investors), oraccount for more than 50 per cent of the Target’s global assets;• direct investments of any nature by foreign governments or their agenciesirrespective of size;• acquisitions of interests in Australian urban land (including interests that arise vialeases, financing and profit sharing arrangements and the acquisition of interestsin urban land corporations and trusts) that involve:P950592_191.doc