Last week the U.S. Department of Justice (DOJ) announced that it is seeking public comment as it considers substantive updates to the implementing regulations of the Foreign Agents Registration Act (FARA) for the first time in almost thirty years. The announcement, in the form of an Advanced Notice of Proposed Rulemaking (ANPRM), includes 19 questions on proposed changes to the regulations, as well as an open-ended invitation for comments on or suggested revisions to any aspect of FARA. Although the ANPRM does not propose specific changes, the questions signal changes DOJ is likely to make—and that those changes will be significant.
The Process
The ANPRM is the first step before new regulations come into effect and offers an opportunity for the public to help shape the new rules. The public has until February 11, 2022 to provide comments. Following receipt of those comments, DOJ will publish a Notice of Proposed Rulemaking (NPRM) that contains its proposed amendments to the regulations and triggers another public comment period. After the NPRM comment period closes and DOJ evaluates the additional comments, DOJ can publish final regulations. Given the many steps involved in the administrative rulemaking process, we expect final regulations will not be published until the second half of 2022 at the earliest.
The Exemptions
FARA enumerates eight broad categories of persons and activities that are exempt from registration under the statute. Because of the breadth of the FARA registration requirements, those exemptions are often critical in an entity’s analysis of whether it has a registration obligation. Although the ANPRM solicits comments on any exemptions, it singles out and asks specific questions about three: the exemptions for commercial activities; the exemption for religious, scholastic, or scientific pursuits; and the exemption for lawyers. DOJ’s focus on these three exemptions, and the specific questions asked, provide a strong indication of the changes that DOJ is considering.
Commercial Exemptions
Arguably the most significant change contemplated in the ANPRM is the addition of a single word that would narrow the scope of the commercial exemptions in 22 U.S.C. §§ 613(d)(1) and (2). Under the current regulation, the exemptions apply to activities in furtherance of commercial operations that, among other requirements, “[d]o not directly promote the public or political interests of a foreign government or of a foreign political party.” The ANPRM asks whether the word “indirectly” should be added to the exemptions, so that any activity that even indirectly promotes the public or political interests of a foreign government or of a foreign political party would not fall within the scope of the commercial exemptions. Without further clarification, such a change has the potential for far reaching impact, since many organizations are engaged in activities that are in furtherance of commercial interests, but may nevertheless indirectly benefit a foreign government or that government’s interests.
Relatedly, DOJ is considering whether to clarify how the commercial exemption applies to political activities performed on behalf of foreign principals other than state-owned entities.[1] While the ANPRM does not betray DOJ’s view on how the exemption should be clarified, any express statement regarding its application to entities beyond state-owned entities will impact an incalculable number of entities and individuals.
Exemption for Religious, Scholastic, or Scientific Pursuits
DOJ is also targeting the exemption for “activities in furtherance of bona fide religious, scholastic, academic, or scientific pursuits or of the fine arts.” The exemption includes broad language, seemingly only limited by one’s perception of what is “bona fide.” It has also not been the subject of recent DOJ clarification efforts—only five of the more than 120 advisory opinions on the FARA Unit’s website mention the exemption.
The focus of the question in the ANPRM is on the fact that the current regulation only articulates when the exemption does not apply—when a person is engaged in political activities—and asks whether the regulation should also clarify when it does apply. DOJ does not reveal how it intends to provide that clarity, but any change will affect scores of academic institutions, research facilities, and think tanks across the country.
Legal Exemption
DOJ appears inclined to update the regulations to adopt a broader view of the activities that are covered by the legal exemption. FARA exempts from registration persons qualified to practice law who engage or agree to engage in the legal representation of a disclosed foreign principal before any court or agency of the U.S. government. In a recent advisory opinion and guidance posted on the FARA Unit’s website, DOJ adopted a view that the legal exemption can apply to certain activities “so long as those activities do not go beyond the bounds of normal legal representation of a client.” Such activities can include “responding to media inquiries.” DOJ’s interpretation, however, is not reflected in the statute or regulation—and arguably is contradicted by them—and thus the ANPRM suggests that DOJ is inclined to incorporate into the regulations the more expansive view of the legal exemption that it has already embraced in practice.
Labeling Requirements for the Digital Age
When it comes to FARA compliance, the decision whether to register is often only the first in a series of hurdles. Once an entity has registered, FARA requires the labeling and filing of informational materials—a term that is undefined and leaves many agents to ponder whether and how social media posts, online videos, and other digital media need to be labeled and filed with DOJ. FARA requires that informational materials include a “conspicuous statement,” which DOJ’s website suggests should state that “This material is distributed by (name of registrant) on behalf of (name of foreign principal). Additional information is available at the Department of Justice, Washington, DC.” For Twitter, the required label would be comprised of more than half of all permitted characters.
The ANPRM acknowledges that these rules have not kept up with the times and seeks comment on several topics, including whether to define “informational materials,” how posts on social media accounts should be labeled where text space is limited, and how the labeling requirements for televised or broadcast informational materials should apply to online media content. Updates to these regulations will affect nearly all registered agents, potentially bringing more communications within the scope of informational materials and affording the DOJ more enforcement opportunities.
Other Potential Changes
Although regulatory changes related to FARA’s exemptions and the requirements for informational materials are likely to be the most consequential for current and potential registrants, the ANPRM poses questions on other topics, including:
- Whether DOJ should update the regulations to reflect a recent advisory opinion that the term political consultant is generally limited to those who conduct political activities;
- Whether the regulations should incorporate guidance the FARA Unit issued in a recent white paper on the scope of agency under FARA, which explains how DOJ interprets “request” and “direction and control”; and
- Whether DOJ should change the advisory opinion process, potentially giving the FARA Unit more than the current 30 days to respond to a request for an advisory opinion and making advisory opinion requests public in redacted form.
An Opportunity to Shape the Rules
DOJ could have issued proposed rules without going through the ANPRM process to solicit public comment. The fact that it chose to first present specific questions in the ANPRM and invite comments on any aspect of the regulations indicates that the advanced notice is a genuine effort to consider input from the public. Senior DOJ officials echoed this sentiment during remarks at a recent FARA conference in Washington, D.C., emphasizing that input from registrants, practitioners, and other stakeholders is encouraged and will inform the proposed rules DOJ intends to issue.
As registrants and practitioners know, each word in the FARA regulations matters and it is possible that DOJ could propose language without appreciating the full range of implications. Individuals and organizations likely to be affected by the new regulations should explore ways to use this opportunity to educate DOJ about the consequences of the changes previewed in the ANPRM and shape other areas of FARA.
[1] “The term ‘political activities’ means any activity that the person engaging in believes will, or that the person intends to, in any way influence any agency or official of the Government of the United States or any section of the public within the United States with reference to formulating, adopting, or changing the domestic or foreign policies of the United States or with reference to the political or public interests, policies, or relations of a government of a foreign country or a foreign political party.” 22 U.S.C. § 611(o).
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