The Department of Justice (DOJ) has had a surge in the last couple of years in Foreign Agents Registration Act (FARA), 22 U.S.C. 611 et seq., enforcement, releasing DOJ advisory opinions, guidance, and for the first time in 2020, mostly unredacted letters of determination (I’ll call them the “DOJ FARA Materials”). These developments are certainly due to the DOJ’s focus on foreign influence on the American public.
Lawyers should be well-versed in FARA requirements because ordinary client engagements may have FARA implications. The DOJ FARA Materials clarify that what you may think is just a normal activity that you perform during the course of representing your client could in fact require you and your law firm to register under FARA or face criminal charges.
This is a two-part post. In Part 1, I will discuss the history of FARA and when it applies. Then, in Part 2, I will cover FARA enforcement and exceptions to the statute.
FARA was enacted in 1938 to combat Nazi propaganda during World War II. Now, FARA is used to promote transparency in the United States political process, media and public relations sector, and other areas with respect to foreign influence. DOJ guidance explains that, “The Purpose of FARA is not to restrict speech, but rather to identify it as the speech of a foreign principal, and thus to enable American audiences to consider the source in evaluating the message.” In 2016, the DOJ Inspector General audited DOJ’s FARA enforcement, finding that there had been a decline in FARA registrations since the 1990s. There had only been seven FARA prosecutions between 1966 and 2015. Due to the concerns of foreign interference in the 2016 election, the DOJ has focused its efforts on FARA and has issued sixteen letters of determination since 2017.
What Triggers the Need to Register under FARA?
FARA requires certain agents of foreign principals who are engaged in political activities or other activities specified under the statute to register with the DOJ within 10 days of becoming, or agreeing to become, such an agent—and the registration must happen before engaging in any registrable activity. The statute does have certain exemptions (covered in Part 2). The statute also requires these agents to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts, and disbursements in support of those activities specified under the statute.
The most common issue under FARA is whether the person qualifies as an “agent.” So, that’s the focus of most of the DOJ FARA Materials.
Generally, individuals or entities may qualify as agents to foreign principals if they represent the foreign principal before the U.S. government, engage in political activities, act as a public relations counsel or political consultant, or raise funds within the United States on behalf of a foreign government, foreign political party, or person, company, or organization outside of the United States. Importantly, FARA registration can be triggered by merely giving a foreign principal advice. No money or payments need to be involved.
One part of the DOJ FARA Materials clarifies the scope of who is an “agent of a foreign principal” under FARA. “The ultimate test for agency under FARA is whether it is ‘fair to draw the conclusion that an individual is not acting independently, is not simply stating his or her own views, but is acting as an agent or alter ego of the foreign principal.” Further, a formal relationship with the foreign principal is not needed but merely that the conduct and activities be undertaken on behalf of a foreign principal. The DOJ’s definition (provided in the guidance) of agent is broad and formally defines it as “behavior in ‘any other capacity’ at the ‘order,’ ‘request,’ or ‘under the direction or control’ of a foreign principal.
In addressing whether a person should be viewed as an “agent” for purposes of FARA, according to the guidance, DOJ will consider the following relevant factors:
- Whether those requested to act were identified with specificity by the principal. A foreign government’s general plea to large groups for generalized political support does not make them agents if they respond.
- The specificity of the action requested. Again, general pleas for political or financial support are less likely to constitute as requests under FARA.
- Whether the request is compensated or coerced. DOJ states that compensation may take different forms, including: monetary payments, in-kind benefits, the promise of future business, or favorable regulatory treatment. A foreign government could also leverage conduct through threats. If the person is being compensated or coerced, it is more likely that the person is acting under the direction or control of the foreign principal and not of her own volition.
- Whether the political activities align with the person’s own interests. DOJ will look at whether a person is acting on behalf of a foreign principal by considering whether the person appears to be advancing his own interests or those of a U.S. person, versus advancing the interest of a foreign principal.
- Whether the position advocated aligns with the person’s subjective viewpoint. For example, if a person is persuaded on a matter by a foreign principal and then advances that position is not, standing alone, sufficient to make her an agent.
- The nature of the relationship between the person and the foreign principal. Factors that DOJ takes into consideration that may be evidence of a foreign principal-agent relationship are: whether there is an ongoing relationship between the person and the foreign principal, whether the person’s actions are coordinated with the foreign principal, whether the person seeks feedback on her performance, the frequency of meetings, whether there is a written agreement, or whether the action is a one-off or part of a pattern.
Although DOJ has been more transparent and has issued guidance regarding FARA compliance, the statute is broad and there are serious consequences for non-compliance, including criminal charges. As a result, it is important for attorneys, individuals, and businesses who represent foreign principals to carefully evaluate whether their conduct and activities trigger FARA registration.
Part 2 will discuss activities that are exempted from FARA registration and specific instances of FARA enforcement.