Advisers warned on foreign ownership laws
Advisers who knowingly assist foreign investors to flout Australian laws will face fines under legislation implemented today, Treasurer Scott Morrison warns.
Following the passage of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 last week, new civil penalties supporting divestment orders and ensuring people who break the rules do not profit from their actions, come into effect.
"These include forfeiting any capital gains made on divestment of a property and fines for third parties who knowingly assist foreign investors to break the rules," Morrison said.
"Under these new arrangements, foreign investors who fail to comply with the foreign investment rules will not be able to profit from doing so.
"Foreign investment rules need to be strong, effective and enforceable.
"Foreign investors who have breached the residential real estate rules had until yesterday to voluntarily come forward under the reduced penalty period. From today, any investors caught in breach of the rules will face severe penalties.
"The ATO has taken over full responsibility for enforcing residential real estate purchases by foreign citizens and existing criminal penalties have been increased to $135,000 or three years' imprisonment, or both for individuals; and up to $675,000 for companies."
Morrison added that the package of reforms would also improve scrutiny and transparency around foreign ownership of Australia's agricultural production.
"The Government is also expanding the agricultural land register to include residential land and water entitlements," he said.
"The package of reforms also includes long overdue amendments that modernise the foreign investment framework, reduce red tape, and provide greater certainty for investors and the Australian community. Foreign government investors are now subject to the new legislation."
AUTHOR
Nicholas O'Donoghue
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
