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New Zealand’s new foreign investment rules: Know all about them

New Zealand’s new foreign investment rules have widened the government’s powers to block foreign investment that could pose a threat to national security.

Nov 19, 2019 17:43 IST
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New Zealand has tightened its foreign investment rules in case of strategic assets. This means that the foreign investors who were looking to buy strategic assets will now have to convince the government that it is in the interest of the nation.

The new rules give the New Zealand government the power to reject foreign investments in areas deemed sensitive to the nation. The information was shared by New Zealand’s Associate Finance Minister David Parker.

David Parker, however, clarified that the power will only be used when it is deemed necessary to protect the interests of the nation. The rules aim to stop only those investments, which could potentially put the nation’s security or public order at risk.

Also read: Haryana to set up new Foreign Cooperation department

Significance

The new foreign investment rules will apply to all crucial areas such as airports, ports, telecommunications sector, intelligence and military technology and electricity networks.

The new rules will also give the power to the New Zealand government to reject any foreign investment in media firms if it has the potential to threaten the democratic structure of the nation.

How will the new rules change foreign investment in New Zealand?

The foreign investors looking to invest in the strategic assets of New Zealand will now need to convince the government that their deal is in the national interest to get a go-ahead.

Foreign investors from which countries will be affected by the new rules?

New Zealand’s Associate Finance Minister David Parker clarified that the new rules are not aimed at targeting China, which is one of New Zealand's largest trading partner. The new rules will be applicable to all foreign investors, regardless of which country they belong to.

The new rules will be applicable to which sectors?

The new foreign investment rules will apply to all sensitive areas of the nation including important infrastructure, airports, ports, telecommunications sector, power, intelligence agencies and firms developing military technology.
 
How will be new rules help New Zealand?

The new foreign investment rules will give the New Zealand government the power to reject all the foreign investments in important and sensitive areas, which it feels might be against the nation’s interest.

Background

This is not the first instance of screening foreign investment, as previously also foreign investments have been screened based on the buyer’s character or financial capability to complete the transaction.

The intelligence agencies also have the power to screen military and infrastructure projects, keeping in mind national security.

Also read: David Attenborough conferred with Indira Gandhi Prize for Peace

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