Australia is seeking to toughen its foreign investment regulations to protect its assets from an overseas entity if it threatens national security, the government said on Friday.
The reform will give more power to the Foreign Investment Review Board to analyze investment agreements in companies that are "sensitive national security businesses" without considering their acquisition value, Treasurer Josh Frydenberg said.
Currently, it only requires the approval of the regulator when the foreign investment is more than A$275 million ($191 million) million or A$1.2 billion if an investment originates from countries listed under Free Trade Agreement, reports Efe news.
The government expects the new measures to be in place from January 2021 and will affect companies related to telecommunications, technology, energy, infrastructure, and supply chains.
Frydenberg, in a joint press conference with Prime Minister Scott Morrison, said some cases of foreign investment are "used for strategic objectives not purely commercial".
He reiterated that the measure of foreign investment is more significant since its establishment in 1975.
In late March, the Australian government had temporarily toughened the requirements of foreign investments to mitigate the strong impact on its economy due to the COVID-19 pandemic.
Through these measures, all the foreign investment proposals had to be approved by Frydenberg regardless of the amount and a revision period of the proposals extended to six months from 30 days.
The toughening of foreign investment law comes amid a crisis due to COVID-19 that has affected Australian businesses.
The move is also expected to cause an escalation in tension with China that has criticized Australia over several measures adopted over the concerns related to foreign interference and espionage.
The Australian government constantly denies that the toughening of the regulations are directed towards China.
However, it had previously blocked purchases from the Asian country citing that they were against its national interests.
Of the total foreign investments in Australia that round to about A$4 billion, China makes up for 5 per cent, the UK and Japan add 10 per cent each while the US contributes some 20 per cent, according to Frydenberg.
( With inputs from IANS )