For the first time in nearly 30 years, the U.S. Department of Justice (DOJ) proposes to materially revise the Foreign Agents Registration Act (FARA). On December 19, 2024, DOJ issued a Notice of Proposed Rulemaking (NPRM) with changes marking a significant shift in DOJ’s approach to its enforcement and interpretation of FARA, including:
- Narrowing the exemption for commercial activities;
- Carving out certain tourism promotion activities; and
- Modernizing requirements for labeling “informational materials.”
If adopted, these revisions to FARA’s implementing regulations will significantly expand the scope of activities and entities subject to FARA’s registration requirements and impose greater compliance costs on registrants. As DOJ bolsters its enforcement resources, companies should proactively assess how these changes may affect their compliance obligations.
FARA – At a Glance
FARA is a disclosure statute designed to promote transparency. It requires individuals (“agents”) engaging in specified activities on behalf of non-U.S. persons or entities (“foreign principals”) to register with DOJ and submit periodic public disclosures regarding their activities. These disclosures enable the U.S. public and government to make informed decisions about the agents’ activities in light of their relationship with their foreign principal. Historically, DOJ has prioritized enforcement against the agents of foreign governments or political parties.
In December 2021, DOJ issued an Advanced Notice of Proposed Rulemaking (ANPRM) seeking public comments on 19 questions regarding various aspects of FARA’s implementing regulations. The ANPRM promised the first significant changes to the statute’s implementing regulations since the passage of the Lobbying Disclosure Act in 1995, and signaled changes to core exemptions that had not been altered since the late 1960s. The NPRM delivers on those proposals and more.
The Commercial Exemption Will Be Narrowed
FARA’s so-called “commercial exemption” contains two distinct exemptions:
- The first, for persons engaged in “private and nonpolitical activities” that further the foreign principal’s trade or commercial interests;
- The second, for persons engaged in other activities—primarily “political activities”[1]—“not serving predominantly a foreign interest.”[2]
The NPRM proposes changes to the implementing regulations for both exemptions, which would greatly narrow the exemptions’ scope.
Private & Nonpolitical Activities
FARA’s current regulations provide that commercial activities carried out on behalf of a foreign principal are exempt from registration if they do not “directly promote” the public or political interests of a foreign government.[3] Notably, the NPRM proposes removing the qualifier “directly,” reflecting DOJ’s position that the exemption should not apply when an agent’s commercial activities directly or indirectly promote the interests of a foreign government or political party.[4]
In its commentary, DOJ suggests that the change removes ambiguity around the existing regulations. But the cure likely creates new complications. After all, seemingly any commercial activity carried out on behalf of a state-owned corporation could eventually redound to some benefit for the foreign sovereign, whether through tax revenue, increased exports, or providing valuable services. While we do not assess that DOJ intends to sweep in all state-owned entities, removing the qualifier makes it unclear whether any such benefit will now trigger registration. With one exception (discussed next), DOJ is silent on the right line to draw.
Travel Agencies & Tourism
The NPRM expands the definition of exempt “private and nonpolitical” activities to include promoting recreational or business travel to a foreign country, so long as the agent’s relationship to the foreign principal is clear to the public.[5] In DOJ’s judgment, such activity is “too attenuated” from the types of influence activity that require FARA’s registration and compliance obligations.[6]
This carve-out would reverse almost 40 years of guidance advising that promoting tourism on behalf of foreign government-owned tourism authorities requires registration under FARA. This proposed change appears to reflect a judgment to focus DOJ’s enforcement resources on higher priority concerns identified elsewhere in the NPRM—including the use of state-owned enterprises for geopolitical and strategic purposes, foreign government influence over think tanks and non-governmental organizations, and U.S. activities of sovereign wealth funds.[7]
Activities “Not Serving Predominantly a Foreign Interest”
Under the second part of FARA’s “commercial” exemption, section 613(d)(2), persons engaging in political activities “not serving predominantly a foreign interest” are exempt from registration. FARA’s current regulations provide that this exemption is available if the agent’s activities are
(i) neither directed by nor (ii) directly promote the interests of a foreign government or foreign political party. Therefore “political activities” on behalf of non-U.S. private entities by and large fall within the exemption.
The NPRM restructures and narrows the exemption, bringing significantly more activities and entities within FARA’s scope. The NPRM’s proposal has two steps: first, certain activities, including “political activities,” that advance the interests of a foreign government or political party are categorically ineligible for the exemption; second, even if the activities are not subject to the categorical bar, they may be outside the exemption if other criteria indicate the activities advance foreign interests more than domestic ones. Each step is a fact-specific inquiry.
The first step somewhat tracks the existing exemption, albeit with more tools to determine whether an agent’s activities serve government-related interests. The second step may tremendously expand FARA’s scope.
Step 1: Categorical Exclusions
The first step creates four categorical exclusions from the exemption that turn on the connection between the agent and their activities and a foreign government or political party. The exclusion applies, and the exemption is unavailable, if any of the following is true:
- The intent or purpose of the activities is to benefit the political or public interests of the foreign government or political party. Notably, DOJ elaborated that if there is evidence that even one of an agent’s motives is specifically to advance the interests of the foreign government or political party, DOJ will assume that the exclusion applies.[8]
- A foreign government or political party “influences” the activities. Influence may be exerted, either directly or indirectly, through controlling, owning, financing, and subsidizing activities, as well as other means. Such influence, in DOJ’s view, suggests a deliberate effort to ensure a benefit to the foreign government or political party, regardless of the balance of benefits to other foreign and domestic interests.[9]
- The principal beneficiary of the activities is a foreign government or foreign political party. Such benefits will be considered circumstantial evidence that the foreign government or political party is directing or controlling the activities.[10]
- Both (1) the activities are directly or indirectly supervised, directed, controlled, or financed in whole or in substantial part by a foreign government or foreign political party, and (2) the activities promote the public or political interests of a foreign government or political party. Currently, the commercial exemption is unavailable only when a foreign government or political party directs an agent’s activities. The NPRM would shrink the exemption by making it unavailable when a foreign government or political party directs, controls, or finances the agent’s activities. Additionally, for businesses that work for foreign governments or political parties, any promotion of those clients’ public or political interests—directly or indirectly—may trigger the exclusion.[11]
Step 2: Predominant Interest Test
The second step completely transforms the exemption, and in so doing, the scope of the statute. Previously, the exemption turned on the relationship between the agent and a foreign government or foreign political party. And so most foreign commercial and non-commercial entities presumed the exemption applied to them—since they had no nexus to a government or political party. But the NPRM’s proposal would deny the exemption if, on balance, the agent’s activities predominantly serve any foreign interest.
Specifically, even if the categorical exclusion is not triggered at the first step, the new regulations would require the agent of any foreign principal to register if DOJ determines that—based on the totality of the circumstances—the activities predominantly serve a foreign interest based on factors including, but not limited to:
- Whether the public or relevant government officials already know about the relationship between the agent and the foreign principal;
- Whether the commercial activities further the commercial interests of a foreign commercial entity more than those of a domestic commercial entity (if the balance of interests favor the foreign entity, the exemption is less likely to be available);
- The degree of influence (including through financing) that foreign sources have over domestic noncommercial entities, such as nonprofits;
- Whether the activities concern U.S. laws and policies applicable to domestic or foreign interests (if the laws and policies concern activities abroad, then the exemption is less likely to be available);
- The extent to which any foreign principal “influences” the activities. [12]
DOJ emphasized that the entity whose commercial interests will benefit most from the agent’s activity will be especially useful in determining whether the exemption applies.
613(d)(2) Exemption Now Explicitly Applies to Nonprofits
Consistent with recent advisory opinions, the NPRM explicitly states that the section 613(d)(2) exemption can apply to nonprofits and other noncommercial entities. The change addresses longstanding ambiguity whether nonprofits could use the exemption even if they are not engaged in “commercial, industrial, or financial operations,” which the current regulations seem to require.[13] The proposed language makes it clear that the exemption is available to agents of foreign “non-commercial entities,” so long as the exemption’s other requirements are satisfied.[14]
Existing Guidance Regarding the Legal Exemption Is Codified
FARA exempts from registration “person[s] qualified to practice law” who represent a disclosed foreign principal before a court or in an analogous agency proceeding.[15] DOJ’s proposal responds to public comments requesting clarity about what activities undertaken by a lawyer may be exempt, but provides only a few examples that were largely covered in existing guidance.[16]
Specifically, the NPRM proposes that a lawyer representing a foreign principal in a covered proceeding would not have to register for activities related to that representation, if her “representation does not extend beyond the bounds of normal legal representation.”[17] The proposal also specifies that “providing information” about the covered proceeding to uninvolved persons would not require registration—as long as that activity stays short of “political activities.”[18] But attempts to persuade persons not involved in the investigation or proceeding, such as Congress or the public, related to broader foreign or domestic policies would not be covered by the exemption.[19] Such activities go “beyond the bounds of normal legal representation of a specific client in a specific matter and [go] to the heart of the transparency goals of FARA and thus require[] registration.”[20]
This proposal tracks existing guidance, in which DOJ has acknowledged that some activities outside the courtroom are part of “the realities of modern legal practice” and do not terminate the exemption.[21] The NPRM largely formalizes this guidance into regulation.[22]
The NPRM would also require that attorneys disclose their representation on behalf of a foreign principal to a court or agency “[r]egardless of whether court or agency procedures require it.”[23]
Disclosure Requirements Are Modernized and Bolstered
“Informational Materials” Now Defined by Regulation
Citing a need to “keep pace with technological advances,” DOJ proposes overhauling the regulations regarding informational materials.[24] FARA currently requires any agent who distributes informational materials to two or more persons to (1) file those materials in DOJ’s eFile system within 48 hours of dissemination, and (2) include a conspicuous statement on the materials that discloses they are being distributed on behalf of a foreign principal.[25] But neither the statute nor regulations define “informational materials.”
The NPRM would define “informational materials” as “any material that the person disseminating it believes or has reason to believe will, or which the person intends to in any way, influence any [U.S.] agency or official . . . with reference to formulating, adopting, or changing the [U.S.] domestic or foreign policies . . . [based on] the political or public interests, policies, or relations of a government of a foreign country or a foreign political party.”[26] This new definition is intended to clarify that “the way the materials are distributed—in print, online, or by any other method—has no bearing on the statutory requirement to file and label them.”[27]
In addition, registered agents must also identify themselves as such whenever they communicate with the U.S. government, even if merely requesting information or arranging a meeting, closing a gap in the regulations.[28]
Conspicuous Statements
When disseminating informational materials, registrants must include a “conspicuous statement.”[29] Currently, the conspicuous statement must include the names of the registrant, the foreign principal, and that additional information is filed with the DOJ. If the materials are televised or broadcast, the conspicuous statement must be shared at the beginning of the media.[30]
DOJ proposes several changes to the conspicuous statement requirement.[31] These include:
- Location Data: The conspicuous statement must include the country (or state, territory, or principality) in which the foreign principal is located.
- Readability: The conspicuous statement must be in a font and color that are easy to read.
- Biographical Information: The conspicuous statement must be included with any author’s byline, signature block, or biographical information.
- Television Broadcasts: The conspicuous statement must bookend televised and broadcast media at the beginning and end, rather than appearing only at the beginning.
- Lengthy Broadcasts: The conspicuous statement must be re-played every hour of programming in televised or broadcast media lasting longer than one hour.
- Motion Pictures: When the conspicuous statement appears in a motion picture, it must be read audibly and shown on screen so that the viewer comprehends the statement.
- Hyperlinks: The conspicuous statements on websites must include a link to the registrant’s filings on DOJ’s FARA website.
Social Media
DOJ responded to comments on the ANPRM recommending disclosure guidance specifically for informational materials disseminated via social media. The proposed rule would require that each comment or post by a registrant on an internet platform or website include a hyperlink to the registrant’s filing and a conspicuous statement that adheres to the disclosure requirements for other informational materials. If a registrant has administrative access to a website, the registrant must also conspicuously post this information on the “home” and “about” pages of the website.[32]
What Will Not Change (Allegedly)
DOJ declined to adopt certain changes proposed by commenters.
- Scope of “Agency”: DOJ declined to adopt regulations codifying previous guidance on the scope of “agency” under FARA (i.e., what kind of relationship triggers FARA obligations). DOJ noted that because agency determinations under FARA are highly fact-specific, it is not feasible to codify such a test and determining whether agency exists is “better suited to the advisory-opinion process.”[33]
- “Political Consultant” Definition: DOJ also declined to adopt any proposed changes to or clarifications of the meaning of “political consultant.” Responding to comments supporting a narrower interpretation, DOJ stated that the matter was “not well suited to the issuance of a regulation” and rejected commenters’ proposals as inconsistent with the statutory text. Notably, DOJ rejected a suggestion by one commenter that “political consultants” should not be obligated to register unless they are engaged in political activities, stating that this would render the terms “political consultant” and “political activities” redundant.[34] But DOJ had appeared to adopt that exact posture in past advisory opinions. So the NPRM’s purported non-change seems to be walking back prior guidance.
Conclusion
DOJ’s proposed changes reflect an aggressive effort to expand FARA’s reach through regulatory updates. This push comes just weeks after DOJ’s authority to compel retroactive registration has been significantly diminished, creating an apparent mismatch between DOJ’s will to enforce FARA and its means to do so. While the NPRM aims to address ambiguities and modernize FARA’s application, its scope could lead to compliance challenges for a wide range of entities.
Individuals and organizations likely to be affected by the new regulations should consider submitting public comments to the Federal Register on or before March 3, 2025. Engaging in this process provides an opportunity to highlight the practical implications of the proposed regulations and help shape DOJ’s final rulemaking.
[1] 22 U.S.C. § 611(o).
[2] 22 U.S.C. §§ 613(d)(1)–(2).
[3] 28 C.F.R. §§ 5.304(b)–(c) (emphasis added).
[4] Draft NPRM at 43–44.
[5] Proposed 28 C.F.R. § 5.304(b)(2) (Draft NPRM at 67).
[6] Draft NPRM at 44.
[7] Draft NPRM at 12.
[8] Draft NPRM at 15–16.
[9] Draft NPRM at 16.
[10] Draft NPRM at 17.
[11] Draft NPRM at 17, 20–22.
[12] Draft NPRM at 18–20.
[13] Draft NPRM at 14.
[14] Proposed 28 C.F.R. § 5.304(c) (Draft NPRM at 68).
[15] 22 U.S.C. § 613(g); 28 C.F.R. § 5.306.
[16] See Draft NPRM at 25–26.
[17] Proposed 28 C.F.R. § 5.306(a) (Draft NPRM at 69).
[18] See Proposed 28 C.F.R. § 5.306(b) (Draft NPRM at 69–70).
[19] Draft NPRM at 47; Proposed 28 C.F.R. § 5.306(b) (Draft NPRM at 69–70).
[20] Draft NPRM at 47.
[21] Draft NPRM at 26.
[22] See Draft NPRM at 47; Proposed 28 C.F.R. § 5.306(b)(2) (Draft NPRM at 70).
[23] Proposed 28 C.F.R. § 5.306(c) (Draft NPRM at 70).
[24] Draft NPRM at 48.
[25] See 18 U.S.C. §§ 614(a)–(b).
[26] Draft NPRM at 48.
[27] Draft NPRM at 48.
[28] Draft NPRM at 49; proposed 28 C.F.R. § 5.401(h)(2) (Draft NPRM at 74).
[29] 22 U.S.C. § 614(b).
[30] 28 C.F.R. § 5.402(d).
[31] Draft NPRM at 71–74.
[32] Draft NPRM at 7; Proposed 28 C.F.R. § 5.401(f) (Draft NPRM at 73).
[33] Draft NPRM at 9. See generally Draft NPRM at 5–9.
[34] Draft NPRM at 9–10.
