Declarations in relation to foreign arrangements

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).