32Powers of the Minister in relation to breaches of conditions

32 Powers of the Minister in relation to breaches of conditions

(1) If the Minister is satisfied that a FLIC has breached a condition of the scheme the Minister may decide:

(a) not to take any action in respect of the breach (other than to take the breach into account in determining a course of action in respect of any further breaches of conditions by the FLIC); or

(b) to take action under the following subsections.

Note: A decision of the Minister under this section is a reviewable decision (see section 42).

(2) The Minister may take any or all of the following actions in respect of the breach:

(a) give the FLIC written notice of a day by which the breach of condition must be remedied;

(b) if the breach occurred during the licence period—revoke the licence;

(c) decide to remove the concessional status of shares that were issued to shareholders by the FLIC during the licence period.

Note: Section 375‑865 of the Income Tax Assessment Act 1997 provides that shareholders whose shares are affected by a decision under this paragraph lose their entitlement to a deduction for the shares.

(3) If a FLIC that has been notified of a day under paragraph (2)(a) does not remedy the breach of condition by that day, the Minister may make such decision under subsection (1) as the Minister thinks appropriate. (4) If the Minister, in respect of a breach of condition by a FLIC:

(a) makes a decision under paragraph 32(1)(a); or

(b) revokes the FLIC’S licence; or

(c) decides to remove the concessional status of shares in the FLIC;

the Minister must, within 28 days of making the decision, notify the Commissioner of Taxation in writing of the decision. (5) Written notice of a decision of the Minister under this section must:

(a) be given to the FLIC concerned; and

(b) include reasons for the decision.

Note: A FLIC is required as a condition of the scheme to notify each of its shareholders if the Minister makes a decision under section 32 in respect of a breach by the FLIC of a condition (see paragraph 28(c)).

(6) If the Minister’s decision in respect of a FLIC is to revoke the FLIC’s licence, the notice under subsection (5) must also specify the day on which the revocation takes effect.