A State/Territory entity that proposes to enter a non-core arrangement must notify the Minister about that proposal. If the entity enters the arrangement, it must also notify the Minister about that.

The Minister may make a declaration prohibiting a State/Territory entity from negotiating or entering a non-core arrangement. Broadly, the Minister may only make such a declaration if the Minister is satisfied that the negotiation or arrangement:

       (a)     would adversely affect, or would be likely to adversely affect, Australia's foreign relations; or

      (b)     would be, or would be 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 (see section 51).

If a State/Territory entity enters a non-core arrangement with a foreign entity in contravention of a declaration by the Minister, then that will be a ground on which the Minister may make a declaration under Part 4 about the arrangement (which could result in the arrangement being invalid and unenforceable, required to be terminated, or not in operation (depending on the nature of the arrangement).

Subsidiary arrangements of the unlawfully entered arrangement may also be affected (see Division 3 of Part 4).