The Foreign Arrangements Scheme commenced on 10 December 2020. Its purpose is to ensure that arrangements between State or Territory governments (and their entities) and foreign entities do not adversely affect Australia's foreign relations and are not inconsistent with Australia's foreign policy.

The Scheme provides for States and Territories and their entities to notify or seek approval from the Minister of Foreign Affairs (the Minister) if they propose to negotiate, or enter, or have entered a foreign arrangement. It creates obligations in respect of both future arrangements and existing arrangements. It also deals with subsidiary arrangements entered into for the purposes of implementing a foreign arrangement.