AUSTRALIA has "no power" to pursue or punish foreign government-owned companies flouting Australia's foreign investment rules.
Senate inquiry testimony from Foreign Investment Review Board officials has also revealed:
THERE is no real monitoring of whether foreign entities are thumbing their nose at Australia's requirements - FIRB officials say they "monitor newspapers".
SCREENING of purchases made by foreign governments is not required by law - it is only "government policy".
ALL land which is not farmed year-round is bizarrely classed as "urban land" for foreign investment; not "rural land".
FIRB chairman Mervyn Phillips confirmed Australia could neither prosecute a foreign government nor cancel a sale of land to it - even if it had flouted Australian rules by keeping the purchase secret.
Australia had "no power" to do so, he said.
Liberal Senator Bill Heffernan criticised the policy.
"If you get away with it, you have gotten away with it," Senator Heffernan said.
Treasury foreign investment and trade policy general manager Frank Di Giorgio said government had a "compliance regime" to identify foreign investors breaking the rules.
This involved educating the community about "rules and regulations", he said.
"People phone in with cases they believe do not meet the criteria and we follow those up. We also monitor newspapers," Mr Di Giorgio said.
Mr Phillips admitted a mine site would be classed "urban" but a farm next door would be classed "rural".
Asked if the FIRB had access to land titles, company and immigration records, he said it had "access to immigration records and we can make inquiries".
Treasury confirmed its Foreign Investment and Trade Policy Division could access Land Titles and the ASIC database.