Under this Part, the Minister may make a declaration that a foreign arrangement between a State/Territory entity and a foreign entity is invalid and unenforceable, required to be varied or terminated, or not in operation (depending on the nature of the arrangement), to the extent specified in the declaration. If the Minister makes such a declaration, the entities will also be prohibited from giving effect to the arrangement and from holding out that they are able to give effect to the arrangement, to the extent specified in the declaration.
There are 2 situations in which the Minister may make the declaration. The first is where the Minister is satisfied that the arrangement:
(a) adversely affects, or is likely to adversely affect, Australia’s foreign relations; or
(b) is, or is likely to be, inconsistent with Australia’s foreign policy.
The second is where the arrangement was entered in contravention of a declaration made by the Minister under Part 3 (which is about non‑core arrangements).
There are particular matters that the Minister must take into account when making a decision to make a declaration about a foreign arrangement (see section 51).
Declarations in relation to subsidiary arrangements
Under this Part, the Minister may also make a declaration that a subsidiary arrangement of a foreign arrangement is invalid and unenforceable, required to be varied or terminated, or not in operation (depending on the nature of the subsidiary arrangement), to the extent specified in the declaration. If the Minister makes such a declaration, the parties to the subsidiary arrangement will be prohibited from giving effect to the arrangement and from holding out that they are able to give effect to the arrangement, to the extent specified in the declaration.
Two conditions must be satisfied before the Minister may make such a declaration in relation to a subsidiary arrangement.
The first is that any of the following apply to the foreign arrangement:
(a) the Minister has made a declaration that the foreign arrangement is invalid and unenforceable, required to be varied or terminated, or not in operation (depending on the nature of the foreign arrangement);
(b) the foreign arrangement was entered in contravention of subsection 22(1) or 36(3);
(c) clause 4, 5 or 6 of Schedule 1 applies to the foreign arrangement.
The second is that the Minister is satisfied that the subsidiary arrangement:
(a) adversely affects, or is likely to adversely affect, Australia’s foreign relations; or
(b) is, or is likely to be, inconsistent with Australia’s foreign policy.
There are particular matters that the Minister must take into account when making a decision to make a declaration about a subsidiary arrangement (see section 51).
Division 2—The Minister’s power to make declarations about foreign arrangements that are in operation
Subdivision A—When the Minister may make declarations about foreign arrangements
40 When the Minister may make declarations under this Division
(1) The Minister may make a declaration under this Division in relation to an arrangement between a State/Territory entity and a foreign entity if:
(a) the Minister is satisfied that the arrangement:
(ii) is, or is likely to be, inconsistent with Australia’s foreign policy; or
(b) the State/Territory entity entered the arrangement in contravention of subsection 36(3).
Note: The Minister must take into account certain matters when making a decision to make a declaration under this Division (see section 51).
Matters that are not relevant
(2) The Minister may make the declaration, irrespective of whether:
(a) the arrangement was entered before or after the commencement day; or
(b) the Minister previously decided:
(i) not to make a declaration under this Division in relation to the arrangement; or
(ii) to make a different declaration under this Division in relation to the arrangement; or
(c) if the arrangement is a core foreign arrangement—the Minister gave approval under subsection 24(2) or 28(2) for the core State/Territory entity to enter the arrangement; or
(d) if the arrangement is a non‑core foreign arrangement—the Minister did not make a declaration under subsection 36(2) prohibiting a State/Territory entity entering the arrangement.
Subdivision B—Declarations about legally binding foreign arrangements
41 Foreign arrangements that are legally binding under Australian law
(1) The Minister may make a declaration under subsection (2) or (3) in relation to an arrangement between a State/Territory entity and a foreign entity if:
(b) apart from the declaration, the arrangement would be legally binding under an Australian law.
Note 1: The Minister must take into account certain matters when making a decision to make a declaration under subsection (2) or (3) (see section 51).
Note 2: Section 44 deals with general matters about the declaration (such as revocation and giving notice to the State/Territory entity).
Declaration that arrangement is invalid and unenforceable
(a) the arrangement:
(i) is invalid and unenforceable to the specified extent and from the specified day; or
(ii) if the arrangement was entered in contravention of subsection 36(3)—is, and is taken to have always been, invalid and unenforceable to the specified extent; and
(b) the State/Territory entity must, within the specified period, notify the foreign entity that:
(ii) the arrangement is invalid and unenforceable, to the specified extent;
(c) the State/Territory entity must, as soon as practicable after complying with paragraph (b), notify the Minister, in writing, of its compliance with that paragraph; and
(iii) hold out, or conduct itself on the basis, that the arrangement is valid or enforceable; and
(iii) hold out in Australia, or conduct itself in Australia on the basis, that the arrangement is valid or enforceable.
(b) the State/Territory entity must, in accordance with any specified requirements, vary or terminate the arrangement; and
(c) the State/Territory entity must, as soon as practicable after complying with paragraph (a) or (b), notify the Minister, in writing, of its compliance with that paragraph; and
(4) The State/Territory entity must comply with the declaration to the extent that it applies to the entity.
(5) The foreign entity must comply with the declaration:
(a) if it has been a given a copy of the declaration as required by paragraph (2)(b) or (3)(a); and
(6) For the purposes of paragraph (3)(b), the declaration may require that the arrangement be varied or terminated:
(a) in accordance with the Australian law; or
(c) in accordance with both the Australian law and other requirements.
42 Foreign arrangements that are legally binding under foreign law
(1) The Minister may make a declaration under subsection (2) in relation to an arrangement between a State/Territory entity and a foreign entity if:
(b) the arrangement is legally binding under a foreign law.
Note 1: The Minister must take into account certain matters when making a decision to make a declaration under subsection (2) (see section 51).
Note 2: Section 44 deals with general matters about the declaration (such as revocation and giving notice to the State/Territory entity).
(b) the State/Territory entity must, in accordance with any specified requirements, vary or terminate the arrangement; and
(c) the State/Territory entity must, as soon as practicable after complying with paragraph (a) or (b), notify the Minister, in writing, of its compliance with that paragraph; and
(3) The State/Territory entity must comply with the declaration to the extent that it applies to the entity.
(4) The foreign entity must comply with the declaration:
(a) if it has been a given a copy of the declaration as required by paragraph (2)(a); and
(5) For the purposes of paragraph (2)(b), the declaration may require that the arrangement be varied or terminated:
(a) in accordance with the foreign law; or
(c) in accordance with both the foreign law and other requirements.
(6) A declaration made under subsection (2) is not a legislative instrument.
Subdivision C—Declarations about non‑legally binding foreign arrangements