The Government will keep the Emergency Notification Regime in the Overseas Investment Act 2005 for another 90 days to ensure that New Zealand’s national interest remains protected.
In June 2020, the Government introduced the notification regime to ensure that heightened foreign investment risks caused, and exacerbated, by the COVID-19 pandemic could be managed effectively. The regime requires overseas persons to notify the government of certain controlling investments in existing New Zealand businesses or business assets, even if it those would not ordinarily require consent under the Overseas Investment Act. It also allows the government to impose conditions on transactions, or in cases where no other options are available, to block transactions that are contrary to New Zealand’s national interest.
Ministers are required to review the notification regime at intervals no more than 90 days apart to assess whether the effects of the COVID-19 pandemic justify it remaining in force.
Foreign Affairs Minister Winston Peters, Finance Minister Grant Robertson and Associate Finance Minister David Parker completed the review of the regime on 30 August 2020, and concluded that the effects of the COVID-19 pandemic justify the notification regime continuing for a further 90 days until the next statutory review, due on 28 November 2020.
In making this decision, Ministers were required to consider:
- the economic, social, and other effects of the emergency in New Zealand
- any risks to New Zealand’s national interest associated with transactions by overseas persons, and
- New Zealand’s international relations and international obligations.
In completing this review, Ministers noted that decisions are being made quickly, with most notified transactions approved within 10 days and all transactions processed before the 40 day statutory deadline. There was also no evidence available to indicate that the regime is having a significant negative impact on New Zealand’s attractiveness as a destination for high-quality foreign investment.
A separate review of the Emergency Notification Regime is being carried out to ensure that it remains efficient and effective. This review is expected to be completed after the 2020 General Election.
Once Ministers are satisfied that the notification regime should no longer remain in force, it will be replaced by a narrower national security and public order call in power. This will only apply to investments in strategically important business, such as military technology and critical national infrastructure, that do not normally require consent under the Overseas Investment Act.