How To Register As A Foriegn Agent

The Strange Agents Registration Act (FARA): A Guide for the Perplexed

Updated July 2019, Covington Guide

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In 1938, Congress enacted the Strange Agents Registration Deed ("FARA"), requiring "foreign agents" to annals with the Attorney General. As amended over the years, information technology applies broadly to anyone who acts on behalf of a "foreign principal" to, amongst other things, influence U.Southward. policy or public opinion. Until recently, information technology was a backwater of American police force—and a very still backwater at that, with but seven prosecutions between 1966 and 2016.

That is irresolute at present. Like the once obscure Strange Corrupt Practices Act, which prosecutors revived from hibernation more than a decade ago, FARA is receiving its close-up. In the terminal three years, prosecutors have brought more FARA prosecutions than they had pursued in the preceding half century. In-business firm lawyers are scrambling to bone upwardly on this famously vague criminal statute, at a time when the nation's tiny bar of experienced FARA lawyers can still hold its meetings in the back of a mini-van.

While contempo cases related to Special Counsel Robert Mueller's investigation are the most salient examples, the renewed focus on strange agents actually began a few years ago, and not all of the contempo prosecutions are connected to the Mueller investigation. A significant uptick in audits of registered foreign agents by the FARA Unit of measurement (the Department of Justice office that administers FARA), followed past significant staffing changes in the FARA Unit of measurement, and so noticeably more aggressive interpretations of the statute in advisory opinions and informal advice from the FARA Unit, all signaled a ocean modify.

In September 2016, DOJ'due south Inspector General issued a report suggesting that the Section'south enforcement of FARA was too lax, pointedly noting the rarity of prosecutions, and recounting FBI field agents' complaints that information technology was too hard to secure DOJ approval to file FARA charges. The IG'south report recommended that DOJ's National Security Division prefer a comprehensive FARA enforcement strategy. It is likely that the IG'south lengthy review encouraged line FARA attorneys at DOJ to toughen their posture, fifty-fifty earlier the IG's disquisitional study was issued. The study has, in turn, created a feedback loop, emboldening regime officials to be more aggressive in response to the IG'south criticism. Recent events accept further incentivized them to have a harder line.

Key Points about FARA

Below nosotros provide a detailed primer on FARA registration, highlighting the ways in which it is at present relevant to a broad cast of characters, including multinational corporations. Only get-go, here are some of the key points to keep in mind:

FARA is written so broadly that, if read literally, it could potentially crave registration even for some routine business activities of law firms, lobbying and public relations firms, consulting firms, nonprofit advocacy groups, charitable organizations, ethnic affinity organizations, regional merchandise promotion groups, retrieve tanks, universities, media organizations, trade associations, U.S. subsidiaries of foreign companies, and other commercial enterprises.
In that location does not demand to exist a foreign regime client.
At that place does not demand to be a written contract.
There does not demand to be any payment of a fee.
A mere "request" from a strange person or entity (such equally a foreign authorities official or, in some circumstances, even a foreign private sector individual or company) for assist setting upwards meetings with U.S. government officials could trigger registration.
A request from a foreign person or entity to provide communication regarding how best to influence U.Due south. policy or U.S. public stance could trigger registration.
There are exceedingly few cases clarifying FARA's broadly worded provisions. And, while the DOJ FARA Unit commendably published a subset of its long-secret advisory opinions last year, these short opinions are low-cal on legal analysis and difficult to utilize to other situations. This leaves prosecutors ample room to bring novel test cases, and parties who are new to the statute ample room to misjudge its boundaries.

FARA in a Nutshell

FARA is a complicated, cabalistic, and loosely worded statute. Whether registration is triggered is highly fact dependent, turning on whether agency exists, the nature of the activities conducted by the amanuensis, and whether any of FARA's amorphous "exemptions" utilise.

The statute requires "agents of foreign principals" to register with the DOJ and file both detailed disclosure reports and copies of any "advisory materials" that are distributed within the United States. Such materials must conduct a stigmatizing disclaimer reflecting that they were prepared by a foreign amanuensis. When FARA registration is required, both individuals acting as agents and their employer must annals.

While strange governments and political parties are well understood to be "foreign principals," the term likewise includes any non-U.South. private, partnership, association, corporation, or "organization." A foreign parent company of a U.S. subsidiary would be a foreign principal, for example.

Broad Triggers

To get a "foreign agent," an individual or entity must engage—inside the U.s.—in certain FARA-triggering activities every bit an amanuensis of, or "in any other capacity at the order, asking, or under the direction or command" of, a foreign principal. Although at that place is some law clarifying what would constitute acting nether the "direction or control" of a foreign principal, the term "request" is very broad and seems to become well beyond traditional principles of agency police force. The i court decision that briefly touches on a "request" that is sufficient to trigger FARA registration does little to offer a practical respond. DOJ'southward formal response to the 2016 Inspector General's written report provided trivial additional guidance, although the Department took the position that it looks for evidence of "tasking" past the foreign principal to the amanuensis. A recent advisory opinion seemed to translate the term "agent" of a foreign principal broadly plenty to include working on behalf of a U.South. subsidiary of a foreign company, fifty-fifty when the foreign parent is not involved in the work.

Having a written contract or receiving a payment for services rendered, while non required for FARA registration, are stiff evidence of agency, suggesting that the activities are undertaken for the foreign principal. Only fifty-fifty without a contract or payment, there may exist other indicia of bureau, especially in lite of the breadth of the term "request."

Assuming that an individual or entity is acting every bit an "amanuensis" of a foreign master, the obligation to register under FARA is triggered when the amanuensis conducts, on behalf of the strange principal, 1 or more than of the following activities within the United states of america:

Engaging in "political activities," a term that encompasses any activity that is intended to, or even "believed" to, influence the U.S. authorities or any section of the U.S. public regarding: (one) formulating, adopting, or changing the foreign or domestic policies of the United States or (ii) the "political or public interests, policies, or relations of a government of a foreign state or a foreign political party."
Acting every bit a "public-relations counsel," "publicity amanuensis," "information-service employee," or "political consultant."
Collecting or dispensing coin.
Representing the interests of the strange principal before an agency or official of the U.s.a. Government, generally by making straight contact with government officials.

These triggers for registration are, on their face, extremely broad. And some courts have interpreted them literally. This year, for case, a federal district court in Florida held that a visitor that agreed to broadcast a government-owned news agency'due south radio programs was required to register under FARA because it was acting as a "publicity agent." FARA practitioners withal oft presume that some of the triggers cannot mean what they say (e.yard., collecting or dispensing any funds of behalf of any foreign principal?). And DOJ itself—in privately issued advisory opinions, some of which are still unpublished—has ofttimes placed a gloss on the FARA registration triggers, reading into them narrowing language that does not appear in the statute. Because such interpretations by the Department are non published or exist merely as lore, the Section can, and recently has, rather abruptly altered its views.

Based on FARA's legislative history, DOJ has in the by sometimes read the definition of "political activities" into other triggers; for case final that ane could not be acting equally a "political consultant" for FARA purposes unless one was also engaging in political activities, every bit defined in the statute. Indeed, in that location is some legislative history to support this position, nevertheless the statute'south plain language. In a 1989 letter to Congress concerning Henry Kissinger's activities for foreign clients, DOJ brash Congress that Kissinger was not required to register because "the Section has consistently interpreted the term 'political consultant'…to mean whatever person who takes steps beyond merely advising the strange principal, such as arranging meetings with U.S. Government officials on its behalf or accompanying the principal to such meetings." In recent interactions with the FARA Unit of measurement, however, staff have called into question the validity of such prior guidance, notwithstanding the legislative history. What's more, several recently published informational opinions announced to translate the "political activities" trigger and the "political consultant" trigger somewhat interchangeably. In 1 opinion, the FARA Unit emphasized that it viewed the requesting individual "as a political consult[ant] under FARA because he is engaged in political activities that reached the The states."

FARA has no de minimis threshold. It can exist triggered by even the slightest activeness that meets whatever 1 of the statutory triggers. A single coming together, for instance, with a U.S. official by an executive of a company headquartered outside the Us, or by its U.Due south. subsidiary on behalf of the foreign parent, might satisfy the "representation" trigger. And the mere act of hosting a conference, distributing a policy study, requesting a meeting, or reaching out to stance leaders on behalf of a foreign chief could satisfy the "political activities" trigger.

Practitioners accept placed great weight on the statutory linguistic communication specifying that FARA only applies to activities "within the United states of america." Here too the FARA Unit recently has seemed inclined to take an extremely wide view of what constitutes activeness "within the United States," suggesting that fifty-fifty a very limited nexus to the United states is plenty to trigger the statute'due south jurisdiction over related activities exterior the Usa. Indeed, in one recent informational stance, the FARA Unit of measurement stated that it did "not concur" with the exclamation registration for FARA-triggering activities would non be required if those engaging in the activities were "physically outside the United States at the time of operation or delivery of the service."

FARA Exemptions

By this point, one might wonder why there are non tens of thousands of FARA registrants (currently there are just about four hundred). Apart from non-compliance, which is common, the main explanation is that fifty-fifty when the registration triggers are satisfied, there are several statutory and regulatory "exemptions" that can exist relied upon to exempt a person from registration. Unfortunately, the most widely used exemptions are not well divers, DOJ'due south publicly bachelor regulations and advisory opinions interpreting them are sparse, and there is essentially nothing instance police regarding the scope of the exemptions. The most commonly invoked exemptions are summarized beneath.

The Commercial Exemption

Probably the most frequently used exemption to FARA'southward registration requirement is the so-called "commercial exemption," which exempts "private and nonpolitical activities in furtherance of the bona fide merchandise or commerce" of a strange principal. Implementing regulations betoken that merchandise and commerce includes the purchase and auction of commodities, services, or property. In 2003 regulations, the Section added a second, regulatory commercial exemption for "political activities" undertaken for a strange corporation "in furtherance of the bona fide commercial, industrial, or fiscal operations of the foreign corporation." At that place remains, however, considerable uncertainty regarding the outer boundaries of the commercial exemption.

Critically, it does not apply when the activities are directed by, or "directly promote the public or political interests of," a foreign government or political party. There is little published guidance regarding what would constitute "straight promot[ing]" the public or political interests of a foreign government. Over the last couple of years, the FARA Unit has appeared to take a more expansive view of this language, treating contacts in the United states about matters that are likewise important to a foreign government equally potentially falling outside the commercial exemption, even where a strange corporation has a legitimate commercial interest in the same issue. For instance, in a recent advisory stance, the FARA Unit determined that activities aimed at improving a foreign state bank'southward suitability for edifice commercial relationships with U.S. fiscal institutions directly promotes the interests of a foreign country. On the other hand, in another opinion, the FARA Unit seemed to translate the commercial exemption's "straight promote" language narrowly, placing an emphasis on whether in that location was straight interest past the foreign government. It therefore is important to clarify the extent to which a foreign government's public interests would be promoted by political activities in the Usa fifty-fifty if the impetus for the activities is the commercial objectives of a private sector foreign principal.

DOJ regulations besides expressly provide that the commercial exemption is available fifty-fifty to state-endemic enterprises that are wholly owned past a foreign government. This is significant given the huge number of state-owned enterprises effectually the world, many of which have business operations in the Usa pursuing commercial objectives that are oftentimes divide and distinct from the foreign policy objectives of their governmental owners. In recent years, the FARA Unit has seemed uncomfortable with the fact that its regulations expressly allow land-endemic enterprises to avail themselves of the commercial exemption, only the regulation is articulate and remains in forcefulness, in recognition of the fact that many state-owned enterprises operate with significant commercial independence.

The LDA Exemption

When Congress strengthened federal lobbying disclosure requirements in the mid-1990s through the Lobbying Disclosure Act ("LDA"), information technology simultaneously added a new exemption to FARA that permits an agent of a foreign private sector master to satisfy any FARA obligation by registering under the LDA, so long as the agent has engaged in at to the lowest degree some lobbying activities. Many entities that would otherwise be foreign agents choose to satisfy FARA, where applicative, by registering and reporting under the LDA, which is generally considered far less burdensome.

The LDA exemption is not available to an agent of a strange government or political party, nevertheless. Moreover, even if the amanuensis is engaged by a private entity, DOJ regulations provide that the exemption is not available if "the principal beneficiary" of the work is a foreign regime or political political party. There is no definition of "principal beneficiary," and in the contempo past the FARA Unit has taken an increasingly broad view of what would brand a foreign government the principal beneficiary of actions undertaken by an agent on behalf of a private sector foreign primary. A footnote in a recent advisory opinion, for example, takes the position that "there are situations in which a foreign government or political party may non exist the principal beneficiary, but a principal beneficiary of lobbying activities in which the LDA exemption would non utilize." This could take pregnant implications for U.Southward subsidiaries of foreign parent corporations. For example, a U.South. subsidiary registered under the LDA may think it has addressed any FARA exposure associated with its strange parent, simply if the subsidiary acts on behalf of its parent with respect to an issue that is of significant involvement to a foreign government, there is a adventure that the FARA Unit could determine that the LDA exemption does not use.

As noted, an agent who seeks to take advantage of the LDA exemption also has to engage in at least some "lobbying activities" on behalf of its foreign chief. This means, for example, that if the agent is engaged solely to provide public relations advice, political consulting services, or fundraising within the United States, it could not avail itself of the LDA exemption and would accept to register under FARA.

Consequent with the trend of strengthening FARA, several Members of Congress take introduced legislation to eliminate the LDA exemption from FARA or to conduct an audit addressing how the exemption is used. Indeed, in the IG report, FARA Unit of measurement staff expressly urged that Congress eliminate the LDA exemption to "once over again crave those who lobby for foreign commercial interests to annals nether FARA."

The Lawyer's Exemption

FARA also includes a narrow exemption for lawyers engaged in the do of law on behalf of a foreign client. Just in recent years the "lawyer's exemption" has been narrowed considerably. Information technology does not apply to a lawyer'southward try to influence agency personnel with respect to U.South. authorities policy matters, or the public interests of a foreign government, except in the course of judicial proceedings; criminal or civil police force enforcement inquiries, investigations, or proceedings; and agency proceedings required by statute or regulation to exist conducted on the record. For instance, the FARA Unit concluded in a recent advisory opinion that a U.S. law firm had an obligation to register under FARA for representing a foreign company in the acquisition of a U.S. company, reasoning that the representation involved "educating U.S. policymakers" about the foreign company's proposed conquering of a U.S. company. The intent behind this exemption appears to be to require registration past law firms when they act more as lobbyists, public relations advisors, or political consultants than as legal counselors. Simply this is a very fine line, requiring careful parsing of the language of the lawyer's exemption.

The Bookish Exemption

Universities, retrieve tanks, and other scholarly institutions oft await to FARA'due south "academic exemption" to avert registration. This exemption applies to persons "solely" engaged in bona fide religious, scholastic, bookish, or scientific pursuits or the fine arts. DOJ regulations provide, even so, that information technology does not use if the person is engaged in "political activities." There is trivial available guidance apropos the scope of the academic exemption.

Interestingly, the 2016 IG report noted that the FARA Unit of measurement specifically identified think tanks, organizations operating on college or university campuses, and "non-governmental and grass roots organizations" as entities that ofttimes claim to be exempt from registration, for which DOJ lacks sufficient investigative tools. In addition to asserting that they are not acting every bit agents under foreign direction or command, some of these entities look to the academic exemption as a defense.

Applied Implications of FARA

Given FARA's breadth and ambiguity, and DOJ's recent shift to interpreting the exemptions very narrowly, lawyers and compliance personnel should be attuned to the following mutual traps:

Requests received by a U.Southward. visitor from a foreign business partner or a foreign affiliate to arrange meetings with U.S. officials. Helping a foreign entity or individual engage directly with the U.South. government, such as by setting up a coming together, is perceived by the Department of Justice equally cadre FARA activity. The statute can be triggered fifty-fifty without a contract or payment, and even if the foreign person is not a government official. Companies may recall that they are merely doing a favor for a foreign business partner, when they in fact accept waded deeply into FARA territory. To the extent the contact is unrelated to the visitor's own activities, the commercial exemption will not apply. And even if the company is already LDA registered, it is certainly not registered for the strange business partner, then the LDA exemption also will not utilise.
Private sector lobbying on an issue that is deeply continued to a foreign government'southward interests. Global companies often face commercial issues that are intertwined with governmental bug. For example, companies often have legitimate business reasons to vestibule for or confronting sanctions on particular countries, or to encourage the U.s. to adopt specific trade policies directed at detail countries. It may seem natural to coordinate that lobbying with the regime of the affected land, but working too closely with a strange government or its agents can create FARA risks. What if the foreign regime "requests" that you target your activities in a particular way? Even if your company has a scrupulous LDA compliance programme, the LDA exemption may non exist available if the activities principally benefit the foreign government, despite your own parallel commercial interest.
Requests from a foreign embassy, or from other foreign government officials, to arrange meetings or to provide strategic advice regarding a policy matter earlier the U.Southward. authorities. Depending on the particulars, including whether the advice is rendered inside the U.s.a., it is possible that advising on influencing U.South. policy or public opinion could trigger registration. Arranging meetings likewise likely would trigger registration.
Business evolution activities involving foreign clients. It is not unusual for law firms, public relations firms, consulting firms, and regime contractors that practice business around the world to be asked by foreign clients for favors, such as making an introduction to officials or thought leaders in the Usa, providing communication on a dispute with the U.Southward. regime, or helping with media relations or other staff support for a client's visits in the U.s.. While these may seem like routine customer relations activities meant to strengthen relationships, they could trigger FARA registration, depending on the circumstances.

Although most major corporations accept elaborate compliance manuals and training efforts, FARA is frequently a blind spot that is absent from corporate compliance programs. In lite of recent enforcement trends, most companies that accept international business operations, or otherwise deal with strange governments and firms, should include FARA in their compliance programs. Those companies that do accept FARA policies frequently integrate them with their global anti-corruption and government affairs policies.

Covington has one of the nation'due south most experienced and long-continuing FARA practices, which includes attorneys in our Election and Political Police force and White Neckband Defense practice groups. The firm litigated and won a rare civil case limiting the scope of DOJ's say-so under FARA, in Attorney General of the U.s.a. five. Covington & Burling. The business firm routinely advises U.S. and international clients on compliance with FARA, obtains advisory opinions from the FARA Unit of measurement, represents clients in FARA audits and internal investigations, and defends clients defendant of violating FARA.

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This data is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein.