Temporary overseas investment screening rules retained

The Government will retain 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 Emergency Notification Regime was introduced to ensure that heightened foreign investment risks caused and exacerbated by the COVID-19 pandemic could be managed effectively. The regime allows the Government to screen transactions that do not ordinarily require consent under the Overseas Investment Act, and to impose conditions or block transactions found 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. A first review was completed on 30 August 2020, with Ministers deciding to retain the notification regime until 28 November 2020.

Finance Minister Grant Robertson, Associate Minister of Finance David Parker and Foreign Affairs Minister Nanaia Mahuta have completed the second 90-day review of the regime and concluded that the COVID-19 pandemic justifies it continuing for a further 90 days. 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.

Retaining the regime for 90 days will ensure that the government can manage any foreign investment risks that may emerge as the economy recovers from the initial shock caused by COVID-19. The Ministers also noted that decisions continue to be made quickly under the regime, with most notified transactions being approved within 10 days.

Ministers’ next decision on whether the emergency notification regime should be retained is due by 24 February 2021. When Ministers are satisfied that the emergency 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 businesses that do not normally require consent under the Overseas Investment Act, such as those involved in military technology or critical national infrastructure.