Amid Increased FARA Enforcement, New Advisory Opinions Narrow the Scope of Registrable Activity

Amid a rise in U.S. Department of Justice (DOJ) enforcement of the Foreign Agents Registration Act (FARA)—including an increase in criminal cases and staff dedicated to FARA investigations—last month the FARA Unit released several new advisory opinions that provide insight into how the DOJ interprets and enforces the statute. Advisory opinions do not have precedential value and are only intended to be relied upon by the requesting party (whose identity is redacted in the public opinions), but they are instructive to other parties seeking to understand the FARA Unit’s interpretation of the statute, regulations, and enforcement priorities. The most recent opinions signal a pragmatic approach to certain aspects of FARA, and indicate the new Chief of the FARA Unit intends to follow the FARA enforcement approach of the past few years.

The FARA Unit Reads “Political Consultant” Out of the Statute

Among FARA’s many broad and poorly defined terms, “political consultant” stands out for the wide range of activities it appears to include. The statute defines the term as “any person who engages in informing or advising any other person with reference to the domestic or foreign policies of the United States or the political or public interest, policies, or relations of a foreign country or of a foreign political party.”[1] The breadth of activity that falls within the definition has long been a subject of debate among FARA registrants and practitioners, as it has been the subject of few advisory opinions. A July 19, 2021 advisory opinion put an end to that debate, essentially reading the term out of the statute by concluding that a political consultant would only be required to register under FARA if the agent is also engaged in “political activities”—a separately defined term that is seen as the core of what FARA is intended to regulate.[2]

In reaching the conclusion that certain consulting work for a foreign government did not require registration, the FARA Unit acknowledged “the seemingly wide breadth of the statutory definition to include the mere provision of advice” and looked to the legislative history of FARA to narrow the definition. Specifically, the FARA Unit adopted Congress’s intent as reflected in the committee reports to the 1966 FARA amendments: “a ‘political consultant’ would not be required to register as an agent unless he engaged in political activities, as defined, for his foreign principal.” The legislative history is somewhat perplexing, since if Congress only sought the registration of political consultants engaged in political activities, there was no reason to add political consultants to the statute in the first place. The FARA Unit’s willingness to lean on legislative history to narrow the scope of FARA in a way not required by the plain language of the statute underscores that the Unit is principally focused on “political activities” when making registration determinations and the importance of understanding the legislative history of FARA and DOJ’s enforcement priorities when engaging with the FARA Unit.

Investment Attraction Work, with Appropriate Guardrails, May Not Require Registration

The FARA Unit has signaled for some time that tourism promotion and investment attraction work that are intended to influence the U.S. public with respect to the benefits of visiting or investing in a foreign jurisdiction may require registration when conducted on behalf of a foreign principal. This is because the definition of “political activities” includes activities that are intended to influence “any section of the public within the United States with reference to . . . the . . . public interests . . . of a government of a foreign country.” In a 1988 advisory opinion, the FARA Unit unequivocally stated that “[p]romoting economic investments in [a non-U.S. country] is considered ‘political activity’ as that term is defined in [FARA].” The opinion continued, “Attracting investments in any country other than the United States is considered ‘political propaganda’ under . . . FARA in that such activity attempts to influence a section of the public within the United States with reference to the public interests of the foreign country.”

Recent opinions highlight the FARA Unit’s focus on political activities in the context of investment attraction and due diligence activities. The July 19, 2021 opinion addressed a company’s registration obligation with respect to its consulting work for foreign governments and concluded that the following internal advisory activities would not require registration:

1. Advisory services to support a foreign country’s efforts to improve its competitiveness to attract international business and investment;
2. Research and data analysis of a foreign country’s performance using international indicators that measure a country’s governance, business conditions, and financial factors;
3. Providing guidance and recommendations to a foreign country’s officials regarding policy reforms that will increase the foreign country’s competitiveness; and
4. Advising on a communications strategy to inform international businesses and investors regarding advances made by a foreign country to improve its business environment.

The opinion suggests key factors that the FARA Unit considers in making its determination regarding whether certain activity requires registration. The July 19 opinion noted that these activities were “more international in scope” and did not involve advising on U.S. government programs or representing the interests of a foreign principal before the U.S. government.

But all internal activities are not outside the scope of FARA. The same July 19 opinion concluded that registration would be required for a second set of services that included advising foreign governments on a strategy to engage with the U.S. government regarding an economic development program. Even though the company would not be engaging directly with U.S. government officials, the FARA Unit concluded that advising the foreign governments on engagement strategies with the U.S. government was political activity. The opinion shows the importance of both efforts to influence U.S. officials, directly or indirectly, as well as whether there is a clear nexus to the United States.

Entities engaged in these types of activities on behalf of foreign principals who wish to avoid engaging in registrable activities should consider adopting these distinctions into tailored guardrails that outline what activities their employees and agents are allowed to undertake.

Not All Interactions with U.S. Government Officials Require Registration

Although the July 19 opinion makes it clear that supporting efforts to influence U.S. government officials is likely to require registration, a footnote in that opinion serves as a reminder that not all interactions with U.S. government officials on behalf of a foreign principal require registration. Citing language in the regulations that excludes “routine inquir[ies]” from the definition of political activities, the opinion clarified that direct communications with U.S. government officials “to raise a question regarding process or policy that requires clarification” and “to exchange information regarding the foreign principal with the local U.S. Ambassador in country as a courtesy” do not require registration.

This conclusion is consistent with a May 24, 2021 advisory opinion that concluded a commercial investment company was not required to register if it engaged in outreach to public sector organizations in the United States (i.e., government officials) to gather information and insights about regulatory requirements and trends related to issues relevant to the company’s investments. Specifically, the opinion explained that the conduct was not political activity because the sole purpose of the outreach was to obtain information relevant to the foreign corporation’s investment decisions and the outreach would not involve lobbying contacts with government officials, attempts to influence a U.S. audience, or advocacy for the foreign corporation’s interest or policy preferences.

Notably, neither new advisory opinion analyzed a separate prong of FARA, which may require registration for any person who, on behalf of a foreign principal, “represents the interests of such foreign principal before any agency or official of the Government of the United States.”[3] The absence of analysis of this prong of the statute suggests that, as with political consulting, the FARA Unit’s registration decisions are focused on whether a proposed course of action involves political activities. But without further guidance about when non-registrable inquiries or courtesy information exchanges with U.S. government officials constitute representing the interests of a foreign principal before the U.S. government, any interactions with U.S. government officials on behalf of a foreign principal presents a heightened risk under FARA and requires careful analysis on a case-by-case basis.

Bringing Certain Informal Advocacy within the Scope of the Legal Exemption

Recent advisory opinions also addressed the registration obligations of law firms that work to advance their clients’ interests in the context of sanctions programs administered by the Office of Foreign Assets Control. 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. The plain language of the statute suggests the legal exemption is not available in informal attempts to influence agencies “other than in the course of judicial proceedings, criminal or civil law enforcement inquiries, investigations, or proceedings, or agency proceedings required by statute or regulation to be conducted on the record.”[4]

While that advocacy can take place within the confines of an established regulatory process, a May 24, 2021 advisory opinion addresses the unique situation where a law firm is engaged in informal advocacy to advance a foreign company’s interest in being removed from the Chinese Military-Industrial Complex Companies List—a designation for which there is no formal agency process through which to advocate for removal from the list.

The FARA Unit concluded that the law firm was not required to register for its “informal advocacy”—the only recourse available to address the sanctions imposed on the foreign company. The FARA Unit’s conclusion was based on several critical limitations on the law firm’s work: It would only engage with agencies that could have a role in deciding the company’s status on the list, it would limit its advocacy to removal from the list and the impact of the listing on the company’s legal rights and property interests, it would not seek to influence any official concerning the list generally or other broad topics, and it would not engage in communications with Congress or public relations.

Like the July 19 opinion that appears to read the term political consultant out of the statute, the conclusion that informal advocacy can fall within the scope of the legal exemption reflects the FARA Unit’s pragmatic (and sometimes non-textualist) approach to interpreting the FARA statute. With respect to the legal exemption, that pragmatism is reflected in the FARA Unit’s guidance that the exemption “may include an attorney’s activities outside [formal] proceedings so long as those activities do not go beyond the bounds of normal legal representation of a client within the scope of that matter.” Here, the FARA Unit in essence concluded that the legal activity at issue was within those bounds.

[1] 22. U.S.C. § 611(p).

[2] “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.” Id. at § 611(o).

[3] See id. at § 611(c) (“the term ‘agent of a foreign principal’ means any person who acts as an agent, representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of 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, and who directly or through any other person . . . within the United States represents the interests of such foreign principal before any agency or official of the Government of the United States”).

[4] Id. at § 613(g).