FARA-Like or FARA-Light? State Regulation of Foreign Influence

On April 2, 2024, the Georgia State Senate sent Senate Bill 368, which creates a state law version of the U.S. Foreign Agents Registration Act (FARA) for the State of Georgia, to Governor Brian Kemp for his signature. The Georgia Secretary of State has made several statements in support of the legislation and local media believes Governor Kemp will sign the bill into law.

SB 368 is not an outlier; it is a harbinger. Other states are considering, or have already implemented, their own foreign influence regimes. Alongside redoubled efforts to regulate foreign political contributions at the state level and nascent attempts to regulate foreign capital flows and investments, state legislatures are increasingly turning their attention to regulating foreign influence. Individuals and entities potentially covered by such regulations should monitor these efforts to avoid inadvertently being caught up in their scope.

FARA, but Broader

SB 368 copies many elements of FARA’s structure and scope. The core of SB 368 is lifted word for word from FARA. Persons who engage in certain covered activities in Georgia are “agents of foreign principals” and must register with the Georgia State Ethics Commissioner and make certain regular disclosures. The activities that may trigger SB 368 are the same as those in FARA (e.g., “political activities”), albeit limited to conduct within the state of Georgia. And the particulars of a Georgia registration—in substance and procedure—mirror FARA.

However, SB 368 has several significant departures from its federal analogue that could make it far more onerous. Critically, other than one narrow carve-out for media organizations, SB 368 provides no exemptions from registration. This dramatically expands SB 368’s scope beyond FARA, which has commercial and legal exemptions that exclude a significant amount of routine activity on behalf of non-U.S. entities that does not implicate traditional concerns about foreign influence—for example, a foreign company selling commercial business services.

Beyond these differences, significant ambiguities remain in SB 368. Notably, SB 368 does not provide definitions for “political activities” and the other covered conduct that may trigger a registration obligation. Perhaps the eventual implementing regulations will use the federal definitions as a guidepost. But for now, uncertainty remains.

The bill also contains no defined penalty for non-compliance. Normally, knowing violations of Georgia campaign finance law (including SB 368, if enacted) are a misdemeanor.[1] One state senator who sponsored SB 368 reportedly said that violations of SB 368 would be punished with a $500,000 fine, though this penalty does not appear in the bill. The State Ethics Commission, which enforces lobbying laws and is the entity with which agents are to register under SB 368, has the authority to enforce violations of the state ethics code, but the penalties are much lower than $500,000.

Restrictions on Foreign Contributions

SB 368 also prohibits any “foreign national” from contributing to a candidate, campaign committee, independent committee, or political action committee, and similarly prohibits those entities from knowingly accepting contributions from a foreign national.

Supporters of the bill, like Georgia Secretary of State Brad Raffensperger, have described SB 368’s purpose as being to “safeguard Georgia elections against foreign interference.” Restrictions on foreign political contributions are not new in the United States. After all, federal election law has barred such contributions from foreign nationals since the early 1970s.[2] But the introduction of state-level prohibitions—paired with a FARA-like registration scheme—appears to be a more recent innovation.

A Growing Trend

Georgia is not the only state that is considering enacting its own foreign agent law. The Arizona legislature is considering HB2506, the “State Foreign Agents Registration Act,” which passed the House and is now moving through the Senate. According to the bill’s House sponsor, Matt Gress, the bill is intended to combat the loopholes that state legislators believe exist in federal FARA. As with SB 368 in Georgia, HB2506 removes the exemptions from federal FARA. The Arizona proposal only requires registration for activities related to designated “countries of concern”: China, Cuba, Iran, North Korea, Russia, Saudi Arabia, and Venezuela.

In Oklahoma, the state legislature is considering HB1150, the “Oklahoma Foreign Agents Registration Act,” which passed the House and is awaiting action in the Senate. Like the Arizona proposal, registration only applies to work for any country designated by the United States Secretary of State as hostile or a “Country of Concern.” Notably, these proposals do not appear to follow partisan divides. In California, State Senator Melissa Hurtado introduced SB1151 on April 1, 2024, to amend California’s Political Reform Act of 1974 and add the “California Foreign Agents Registration Act.”

Utah implemented a FARA-like regime in 2022. The state embedded a registration requirement into its state-level Lobbying Disclosure Act. But this requirement only attaches to traditional lobbying activities, not the broad scope of activities contemplated by federal FARA and some of the more aggressive state law proposals.

These state FARA-like laws are the latest in a trend of states enacting legislation to address national security topics historically governed exclusively by the federal government. Dozens of states have enacted or proposed laws that prohibit or restrict the acquisition of land and other real estate by certain entities and persons from China, Russia, and other “countries of concern,” creating state law analogues of restrictions administered by the Committee on Foreign Investment in the United States (CFIUS). To date, 13 states—including Alabama, Florida, North Dakota, Ohio, South Dakota, Tennessee, and Virginia—have adopted such laws specifically targeting entities and individuals from countries of concern. And over 20 states are considering new restrictions or updating existing restrictions on land acquisitions by foreign parties, all with varying levels of restrictiveness. Some of these statutes have already been subject to legal challenges based on Supremacy Clause and Equal Protection grounds. To wit, in February, the Eleventh Circuit partially enjoined Florida’s ban on Chinese nationals owning land or other real estate in Florida. The emerging patchwork of state-level regimes across national security concerns will require even greater vigilance to identify new restrictions and navigate diverging regulations among the states.

With significant changes in federal FARA expected in the coming months after the publication of new regulations, the need to be careful about foreign influence activity will only become more acute.

[1] GA Code § 21-5-9 (2022).

[2] See 52 U.S.C. § 30121, 36 U.S.C. § 510.