An Informational Resource in a New Era of Foreign Agents Registration Act Enforcement.
What is FARA?
The Foreign Agents Registration Act (“FARA”) imposes disclosure requirements and other legal obligations on any individual or entity that becomes an “agent of a foreign principal” unless an exemption applies.
FARA is a public-disclosure statute originally enacted in 1938 as a legislative response to extensive foreign propaganda activities in the U.S. during the run-up to World War II, which included a 20,000-person rally held in Madison Square Garden. Congress hoped that, through FARA, the “spotlight of pitiless publicity [would] serve as a deterrent to the spread of pernicious propaganda.” FARA has since been amended 10 times, with the most significant overhaul occurring in 1966.
Any association, corporation, organization, or “combination of persons” that either was established under a foreign country’s laws or maintains its principal place of business in a foreign country; and
Any individual outside the United States (other [than] a U.S. citizen who is also domiciled in the U.S.).
In other words, foreign government entities, political organizations, businesses, nonprofits, state-owned enterprises, and even individuals are all “foreign principals” under FARA.
An “agent” is an individual or entity that acts “within the United States” at the order, request, direction, or control of either: (1) a “foreign principal”; or (2) a person “any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a “foreign principal.” An individual or entity can become an “agent” even without a contractual relationship or formal agreement with a “foreign principal.”
Courts have used the Restatements of Agency as a guide in assessing “agent” status, but they have also departed from traditional conceptions of agency law at times by, for instance, finding that common personnel, shared facilities, and coincidence in views were insufficient to create an “agent”-“principal” relationship under FARA.
An “agent” is typically identified through practical indicators, such as contractual language, reporting lines, payment streams, and statements found within emails, internal files, and work product that appear to indicate one party is working for another.
Acting within the United States at another’s order, request, direction, or control is insufficient by itself to create “agent” status under FARA, though. In order to be an “agent,” an individual or entity must also engage in FARA-registrable activity.
In order to be an “agent,” an individual or entity must perform one of the following specified FARA-registrable activities within the United States “for or in the interests of” its “foreign principal”:
Engage in “Political Activities”—“Political activities” are activities intended to “in any way influence” either “any agency or official of the Government of the United States” or “any section of the public within the United States,” with reference to “the domestic or foreign policies of the United States or … the political or public interests, policies, or relations of a government of a foreign country of a foreign political party.” This is a broad term that covers lobbying, public-relations activities, and even tourism promotion.
Provide Certain Public Relations or Politically Related Services
“Public Relations Counsel”—Someone who informs, advises, or represents a foreign principal in a public-relations matter involving the principal’s public or political interests, policies, or relations.
“Publicity Agent”—Someone who publishes or disseminates information for a foreign principal.
“Information-Service Employee”—Someone who furnishes, disseminates, or publishes information about a foreign principal’s political, industrial, employment, economic, social, cultural, or other benefits, advantages, facts or conditions.
“Political Consultant”—Someone who informs or advises a foreign principal either about S. domestic or foreign policies or about the principal’s political or public interests, policies, or relations.
Solicit, Collect, Disburse, or Dispense Money or Other Things of Value
Represent Interests before Any Agency or Official of the U.S. Government
An individual or entity acting at the order, request, direction, or control of a principal within the United States can trigger “agent” status under FARA by engaging in any single one of the above-listed activities.
An individual or entity who fits the definition of “agent of a foreign principal” may nonetheless not be required to register under FARA if an exemption applies. FARA exempts several categories of “agents” from its registration requirements, including the following:
Persons Engaged in “Private and Non-Political Activities” that Further “Bona Fide Trade or Commerce”—An “agent” representing a foreign business, nonprofit, or individual may utilize this exemption to engage in commercial activities without triggering registration. This exemption is not available to those representing foreign governments or foreign political parties, and it does not cover direct or grassroots lobbying-type activity, other than “routine inquiries” made of government officials.
Persons Registered under the Lobbying Disclosure Act—An “agent” representing a foreign business, nonprofit, or individual need not register under FARA if they instead register under the federal Lobbying Disclosure Act, which is another disclosure statute administered by Congress. This exemption is not available to those representing foreign governments or foreign political parties, or to those engaged in activities where “the principal beneficiary” of the representation is a foreign government or foreign political party.
Persons Engaged Only in Activities that Further the Fine Arts or “Bona Fide Religious, Scholastic, Academic, or Scientific Pursuits”
Attorneys Representing Clients before a Court of Law or Agency—An attorney representing any type of foreign principal need not register under FARA for work closely connected to a court or agency proceeding, where the attorney discloses the foreign principal’s identity.
Foreign Diplomatic, Consular, or Government Officials Who are Accredited or Formally Recognized by the U.S. State Department
Persons Engage in Activities “Not Serving Predominantly a Foreign Interest”—An “agent” representing a foreign business, nonprofit, or individual need not register under FARA if their work: (1) furthers “bona fide commercial, industrial, or financial operations; (2) is not “directed by a foreign government or foreign political party”; and (3) does not “directly promote the public or political interests of a foreign government or of a foreign political party.” This exemption is not available to those representing foreign governments or foreign political parties. This exemption is similar to the “bona fide trade or commerce” exemption described above, except that this exemption allows an “agent” to engage in lobbying and other “political activities” without triggering FARA registration.
FARA also allows the President and the Attorney General to formally exempt “agents” acting on behalf of certain foreign countries under particular circumstances. The Department of Justice advisory opinions can offer more context and information about most of the FARA registration exemptions.
Please note that the burden is initially on the “agent” to show that an exemption applies in a specific situation.
An “agent of a foreign principal” who is not eligible for an exemption must register with the Department of Justice within 10 days after initially either agreeing to be an “agent” or performing FARA-registrable activities. FARA registration, which is typically filed by the law firm, lobbying firm, or public-relations firm, is accomplished by submitting the following forms:
Initial Registration Statement (First-Time Registrants Only)—An Initial Registration Statement requires the “agent” to disclose its principal employees, descriptions of its business activities, payments or other items received prior to registration, and any informational materials distributed prior to registration. Information on the Initial Registration Statement must be amended within 10 days after any change.
Exhibit A—The Exhibit A portion of the FARA registration requires the “agent” to disclose its foreign principal’s contact information and any relationship that its foreign principal has with a foreign government or foreign political party.
Exhibit B—The Exhibit B portion of the FARA registration requires the “agent” to append a copy of its written and executed contract with its foreign principal. If no written and executed contract is available, the “agent” must include a draft contract or the written correspondence that served as the basis for its agreement with the foreign principal. If no written material is available, the “agent” must provide a detailed narrative description of the agreement. Aside from a copy or description of the contract, Exhibit B also requires the “agent” to provide a narrative description of its expected representational activities.
Exhibit C—The Exhibit C portion of the FARA registration does not have a set form, as it is an updated copy of the charter, articles of incorporation, association, constitution, and bylaws of a “agent” that is an organization.
Short-Form Registration (Individuals)—As part of the registration, each individual who performs non-clerical services for a foreign principal must submit a Short-Form Registration, which lists the filer’s name, residential address, nationality, contribution giving history, compensation, and services to be performed for the foreign principal.
A filing fee of $305 must be paid with each FARA registration. A registration is typically submitted through the Department of Justice’s electronic filing system.
After registration, an “agent of a foreign principal” is subject to the following ongoing disclosure requirements and other legal obligations:
File Reports Every Six Months—A registered “agent” must file a report called a Supplemental Statement every six months with the Department of Justice that describes all activities, receipts, and disbursements in connection with services to a foreign principal during the reporting period. The report also lists all political contributions made and informational materials distributed during the reporting period. A filing fee of $305 for each foreign principal must be submitted with the report.
Submit “Informational Material” within 48 Hours after Distribution—A registered “agent” must submit to the Department of Justice two copies of any “informational material” (i.e. a writing that is distributed to two or more people) that is distributed for a foreign principal. The submission deadline is 48 hours after distribution. The “informational material” is made available on the Department of Justice’s website.
Provide Identifying Information in Communications—A registered “agent” must include in any “informational material” distributed for a foreign principal a specific disclaimer that identifies itself and its foreign principal: “This material is distributed by [Name of Agent] on behalf of [Name of Foreign Principal]. Additional information is on file with the Department of Justice, Washington, D.C.” A registered “agent” must also identify its foreign principal in the course of interacting with any U.S. government official or providing testimony to any congressional committee.
Maintain Records Associated with a FARA Representation for Three Years—A registered “agent” must maintain records associated with its work for a foreign principal for a period of three years.
Refuse to Perform FARA-Registrable Work for a “Contingent Fee”— A registered “agent” may not perform work for a foreign principal in exchange for a “contingent fee” (i.e. compensation that is contingent on the occurrence of an official action).
The disclosure requirements and legal obligations imposed on a registered “agent” should be carefully observed with assistance of legal counsel.
The Department of Justice’s FARA Registration Unit is tasked with policing FARA violations. Historically, the Department has encouraged voluntary compliance over bringing enforcement cases, but it has pursued criminal and civil enforcement actions with increasing frequency in recent years.
Criminal enforcement cases are brought when an individual or entity “willfully” fails to register under FARA, makes a false statement of material fact on a FARA filing, or omits a material fact in a FARA filing. A violation is “willful” when the violator is aware that his/her/its conduct is unlawful. Generally, a “willful” violation carries a penalty for the violator of up to five years in prison and up to a $10,000 fine. In the 81-year history of the statute, the U.S. government has pursued a total of 46 criminal cases to resolution.
Civil and administrative enforcement cases are brought when there is “sufficient credible evidence of a significant violation” of FARA. The Department of Justice can file a civil injunction to force a party to register under FARA, but generally does not impose any civil penalty unless it is agreed upon in a settlement agreement. In the 81-year history of the statute, the U.S. government has pursued a total of 18 civil enforcement cases to resolution.
The Department of Justice develops criminal and civil enforcement cases by conducting audits and by sending Letters of Inquiry, which usually include requests for documents and narrative responses, from potential registrants. The Department typically conducts roughly 14 audits and sends approximately 20 Letters of Inquiry on an annual basis.
No private right of action is available under FARA, but the Department of Justice does receive FARA-related complaints from private parties.
An Informational Resource in a New Era of Foreign Agents Registration Act Enforcement.
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