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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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Australia | Publication | July 2020
On 23 July 2020, the Building Industry Fairness (Security of Payment) and other Legislation Amendment Bill 2020 (Qld) (with amendments) (the BIF Amendment Bill) received royal assent. The Bill amends various legislation, including the Building Industry Fairness (Security of Payment) Act 2017 (the BIF Act) and the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act).
Readers may recall that a key concept in the BIF Act was the introduction of Project Bank Accounts (PBAs) in an effort to increase security of payment for subcontractors.
The implementation and effectiveness of the reforms under the BIF Act, including operation of PBAs, was subject of review by the Building Industry Fairness Reforms Implementation and Evaluation Panel (Panel), which released a report in March 2019 making 20 recommendations to improve the underlying objectives of the Act. Additionally, the Queensland Government established the Special Joint Taskforce (Taskforce) to investigate subcontractor non-payment within the building industry, which made a number of recommendations in June 2019 in relation to the regulation of building industry participants.
The BIF Amendment Bill aims to address the recommendations of the Panel and the Taskforce, which were to:
Additionally, the BIF Amendment Bill aims to address failures in the building certification process, and improve legislative compliance by architects and registered professional engineers.
The BIF Amendment Bill has simplified the framework for trust accounts. Under the new framework:
The requirement to establish a project trust account will apply to new contracts entered on a date that is yet to be proclaimed, however there is limited retrospective operation of the trust account requirements in certain circumstances.
The BIF Amendment Bill provides a detailed framework for the setting up and administration of project trust accounts, including that:
The key requirements for a retention trust account include:
The penalties for contravening provisions regarding the trustee’s obligations are severe, with some contraventions resulting in a penalty of up to 300 penalty units or up to 2 years imprisonment.
The provisions in part 4 of the BIF Amendment Bill relating to the project trust and retention trust regime (i.e. the replacement of chapter 2 of the BIF Act) commence on a date to be proclaimed. Although the timeframe for the implementation of the reforms has not yet been prescribed, we understand that the initial rollout to State projects between $1million and $10million (with an ‘opt in’ for State authorities) will occur in March 2021. Initial indications are that the new regime will take a staggered approach to implementation, with the regime rolling out to higher value projects and private sector projects over time.
It is important that both principals and contractors start taking steps now to prepare for the implementation of the retention trust account regime. This should include:
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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