Is Lanny David A Registered Foreign Agent

The Foreign Agents Registration Deed (FARA): A Guide for the Perplexed

Updated July 2019, Covington Guide

Department of Justice sign

In 1938, Congress enacted the Foreign Agents Registration Act ("FARA"), requiring "foreign agents" to register with the Attorney Full general. Equally amended over the years, it applies broadly to anyone who acts on behalf of a "foreign master" to, among other things, influence U.S. policy or public opinion. Until recently, information technology was a backwater of American law—and a very notwithstanding backwater at that, with just vii prosecutions between 1966 and 2016.

That is changing now. Similar the one time obscure Foreign Decadent Practices Human action, which prosecutors revived from hibernation more than a decade ago, FARA is receiving its close-up. In the last three years, prosecutors have brought more FARA prosecutions than they had pursued in the preceding half century. In-house lawyers are scrambling to os up on this famously vague criminal statute, at a fourth dimension when the nation's tiny bar of experienced FARA lawyers tin can still hold its meetings in the dorsum of a mini-van.

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

In September 2016, DOJ'southward Inspector General issued a written report suggesting that the Department's enforcement of FARA was likewise lax, pointedly noting the rarity of prosecutions, and recounting FBI field agents' complaints that it was also hard to secure DOJ approval to file FARA charges. The IG's report recommended that DOJ's National Security Division adopt a comprehensive FARA enforcement strategy. It is probable that the IG's lengthy review encouraged line FARA attorneys at DOJ to toughen their posture, fifty-fifty before the IG's disquisitional report was issued. The study has, in turn, created a feedback loop, emboldening government officials to be more ambitious in response to the IG's criticism. Recent events accept further incentivized them to take a harder line.

Fundamental Points about FARA

Below we provide a detailed primer on FARA registration, highlighting the ways in which it is now relevant to a wide cast of characters, including multinational corporations. But start, hither are some of the key points to keep in mind:

FARA is written so broadly that, if read literally, it could potentially require registration even for some routine business organization activities of police firms, lobbying and public relations firms, consulting firms, nonprofit advocacy groups, charitable organizations, indigenous affinity organizations, regional merchandise promotion groups, think tanks, universities, media organizations, trade associations, U.S. subsidiaries of foreign companies, and other commercial enterprises.
There does not need to exist a strange government client.
At that place does not need to be a written contract.
There does not need to be whatever payment of a fee.
A mere "request" from a strange person or entity (such every bit a foreign government official or, in some circumstances, even a foreign individual sector individual or company) for assist setting upwards meetings with U.S. regime officials could trigger registration.
A request from a strange person or entity to provide advice regarding how best to influence U.Due south. policy or U.S. public opinion could trigger registration.
There are exceedingly few cases clarifying FARA'southward broadly worded provisions. And, while the DOJ FARA Unit of measurement commendably published a subset of its long-undercover advisory opinions last twelvemonth, these short opinions are light on legal assay and difficult to apply to other situations. This leaves prosecutors aplenty room to bring novel examination cases, and parties who are new to the statute aplenty room to misjudge its boundaries.

FARA in a Nutshell

FARA is a complicated, arcane, 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 agent, and whether any of FARA'southward amorphous "exemptions" utilise.

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

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

Broad Triggers

To become a "foreign agent," an individual or entity must engage—inside the United States—in certain FARA-triggering activities as an agent of, or "in whatsoever other capacity at the order, asking, or under the direction or control" of, a foreign principal. Although there is some law clarifying what would constitute acting under the "direction or control" of a foreign master, the term "request" is very wide and seems to become well across traditional principles of agency law. The one 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 Full general'southward report provided little additional guidance, although the Department took the position that it looks for evidence of "tasking" by the foreign principal to the agent. A recent informational opinion seemed to translate the term "agent" of a strange principal broadly enough to include working on behalf of a U.S. subsidiary of a strange company, even when the strange parent is not involved in the work.

Having a written contract or receiving a payment for services rendered, while not required for FARA registration, are stiff show of agency, suggesting that the activities are undertaken for the strange main. Simply even without a contract or payment, in that location may be other indicia of bureau, especially in light of the breadth of the term "request."

Assuming that an private or entity is acting as an "agent" of a foreign principal, the obligation to register under FARA is triggered when the agent conducts, on behalf of the foreign principal, one or more of the following activities within the United states of america:

Engaging in "political activities," a term that encompasses whatever activity that is intended to, or even "believed" to, influence the U.S. government or any section of the U.S. public regarding: (1) formulating, adopting, or irresolute the strange or domestic policies of the United States or (2) the "political or public interests, policies, or relations of a government of a foreign land or a foreign party."
Interim equally a "public-relations counsel," "publicity agent," "information-service employee," or "political consultant."
Collecting or dispensing coin.
Representing the interests of the foreign principal before an agency or official of the The states Government, more often than not by making direct contact with government officials.

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

Based on FARA's legislative history, DOJ has in the past sometimes read the definition of "political activities" into other triggers; for example concluding that one could not be acting equally a "political consultant" for FARA purposes unless one was also engaging in political activities, as defined in the statute. Indeed, there is some legislative history to back up this position, all the same the statute's apparently linguistic communication. In a 1989 letter to Congress apropos Henry Kissinger's activities for strange clients, DOJ advised Congress that Kissinger was not required to annals considering "the Department has consistently interpreted the term 'political consultant'…to mean whatever person who takes steps beyond only advising the foreign 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, withal, staff have chosen into question the validity of such prior guidance, nonetheless the legislative history. What'southward more, several recently published advisory opinions appear to translate the "political activities" trigger and the "political consultant" trigger somewhat interchangeably. In one stance, the FARA Unit emphasized that it viewed the requesting individual "as a political consult[ant] under FARA considering he is engaged in political activities that reached the Usa."

FARA has no de minimis threshold. It can exist triggered by even the slightest action that meets any one of the statutory triggers. A single meeting, for instance, with a U.S. official by an executive of a company headquartered outside the The states, or by its U.S. subsidiary on behalf of the strange parent, might satisfy the "representation" trigger. And the mere act of hosting a conference, distributing a policy report, requesting a coming together, or reaching out to opinion leaders on behalf of a foreign principal could satisfy the "political activities" trigger.

Practitioners accept placed groovy weight on the statutory language 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 broad view of what constitutes activity "within the United States," suggesting that fifty-fifty a very express nexus to the United States is enough to trigger the statute's jurisdiction over related activities exterior the United States. Indeed, in one recent advisory stance, the FARA Unit stated that it did "not concur" with the assertion registration for FARA-triggering activities would non be required if those engaging in the activities were "physically exterior the U.s. at the time of performance or delivery of the service."

FARA Exemptions

By this point, 1 might wonder why there are non tens of thousands of FARA registrants (currently at that place are just about 4 hundred). Apart from not-compliance, which is common, the main explanation is that even when the registration triggers are satisfied, there are several statutory and regulatory "exemptions" that can be relied upon to exempt a person from registration. Unfortunately, the most widely used exemptions are not well defined, DOJ'south publicly available regulations and advisory opinions interpreting them are sparse, and in that location is essentially zero case law regarding the telescopic of the exemptions. The most ordinarily invoked exemptions are summarized below.

The Commercial Exemption

Probably the most frequently used exemption to FARA'southward registration requirement is the and so-called "commercial exemption," which exempts "private and nonpolitical activities in furtherance of the bona fide trade or commerce" of a foreign principal. Implementing regulations betoken that trade and commerce includes the purchase and sale of bolt, services, or holding. In 2003 regulations, the Department added a second, regulatory commercial exemption for "political activities" undertaken for a strange corporation "in furtherance of the bona fide commercial, industrial, or financial operations of the foreign corporation." There remains, withal, considerable dubiousness regarding the outer boundaries of the commercial exemption.

Critically, it does not utilize when the activities are directed by, or "direct promote the public or political interests of," a foreign authorities or political party. There is trivial published guidance regarding what would constitute "directly 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 linguistic communication, treating contacts in the United States well-nigh matters that are besides important to a foreign government as potentially falling exterior the commercial exemption, even where a foreign corporation has a legitimate commercial interest in the same issue. For example, in a contempo informational opinion, the FARA Unit determined that activities aimed at improving a foreign state banking company's suitability for building commercial relationships with U.S. financial institutions direct promotes the interests of a foreign country. On the other hand, in another opinion, the FARA Unit seemed to interpret the commercial exemption'due south "direct promote" language narrowly, placing an emphasis on whether at that place was direct involvement past the foreign government. It therefore is of import to analyze the extent to which a foreign government'due south public interests would be promoted by political activities in the Us fifty-fifty if the impetus for the activities is the commercial objectives of a individual sector strange main.

DOJ regulations also expressly provide that the commercial exemption is available even to state-owned enterprises that are wholly endemic past a strange government. This is significant given the huge number of state-endemic enterprises effectually the globe, many of which have business operations in the United states of america pursuing commercial objectives that are often dissever 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 state-owned enterprises to avail themselves of the commercial exemption, only the regulation is clear and remains in force, 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 Human activity ("LDA"), it simultaneously added a new exemption to FARA that permits an agent of a foreign private sector principal to satisfy any FARA obligation by registering under the LDA, so long as the agent has engaged in at least some lobbying activities. Many entities that would otherwise exist strange agents choose to satisfy FARA, where applicable, past registering and reporting under the LDA, which is generally considered far less burdensome.

The LDA exemption is not bachelor to an agent of a foreign government or political party, however. Moreover, even if the agent is engaged by a private entity, DOJ regulations provide that the exemption is non available if "the primary beneficiary" of the work is a foreign government or political party. At that place is no definition of "principal beneficiary," and in the recent past the FARA Unit has taken an increasingly broad view of what would brand a foreign government the primary beneficiary of actions undertaken past an agent on behalf of a individual sector foreign principal. A footnote in a contempo informational opinion, for example, takes the position that "there are situations in which a strange government or political party may not be the principal beneficiary, only a principal casher of lobbying activities in which the LDA exemption would not apply." This could accept meaning implications for U.South subsidiaries of foreign parent corporations. For case, a U.South. subsidiary registered under the LDA may recall it has addressed any FARA exposure associated with its foreign parent, but if the subsidiary acts on behalf of its parent with respect to an event that is of significant involvement to a foreign government, at that place is a risk that the FARA Unit of measurement could determine that the LDA exemption does not apply.

As noted, an agent who seeks to have advantage of the LDA exemption also has to appoint in at to the lowest degree some "lobbying activities" on behalf of its foreign principal. This means, for example, that if the amanuensis is engaged solely to provide public relations communication, political consulting services, or fundraising inside the Us, it could not avail itself of the LDA exemption and would have to register nether FARA.

Consistent with the trend of strengthening FARA, several Members of Congress take introduced legislation to eliminate the LDA exemption from FARA or to conduct an inspect addressing how the exemption is used. Indeed, in the IG report, FARA Unit staff expressly urged that Congress eliminate the LDA exemption to "over again require those who vestibule for foreign commercial interests to register under FARA."

The Lawyer'southward Exemption

FARA likewise includes a narrow exemption for lawyers engaged in the practice of police on behalf of a strange customer. Only in contempo years the "lawyer'south exemption" has been narrowed considerably. It does not utilize to a lawyer's try to influence agency personnel with respect to U.S. government policy matters, or the public interests of a foreign government, except in the grade of judicial proceedings; criminal or civil police force enforcement inquiries, investigations, or proceedings; and agency proceedings required past statute or regulation to exist conducted on the tape. For instance, the FARA Unit ended in a recent advisory opinion that a U.S. police force firm had an obligation to register nether FARA for representing a foreign visitor in the acquisition of a U.Due south. visitor, reasoning that the representation involved "educating U.Southward. policymakers" near the foreign company's proposed conquering of a U.S. company. The intent behind this exemption appears to be to require registration past constabulary firms when they act more as lobbyists, public relations advisors, or political consultants than as legal counselors. But this is a very fine line, requiring conscientious parsing of the linguistic communication of the lawyer's exemption.

The Academic Exemption

Universities, think tanks, and other scholarly institutions often look to FARA'southward "bookish exemption" to avoid registration. This exemption applies to persons "solely" engaged in bona fide religious, scholastic, academic, or scientific pursuits or the fine arts. DOJ regulations provide, however, that it does not apply if the person is engaged in "political activities." At that place is lilliputian bachelor guidance apropos the scope of the academic exemption.

Interestingly, the 2016 IG study noted that the FARA Unit specifically identified recall tanks, organizations operating on college or university campuses, and "non-governmental and grass roots organizations" as entities that often merits to be exempt from registration, for which DOJ lacks sufficient investigative tools. In improver to asserting that they are not acting equally agents nether foreign management or control, some of these entities wait to the academic exemption as a defence.

Applied Implications of FARA

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

Requests received by a U.S. company from a strange business partner or a foreign affiliate to arrange meetings with U.S. officials. Helping a foreign entity or individual engage direct with the U.Due south. government, such every bit by setting up a meeting, is perceived by the Section of Justice as core FARA activity. The statute can exist triggered even without a contract or payment, and even if the foreign person is non a government official. Companies may think that they are simply doing a favor for a strange business organisation partner, when they in fact accept waded deeply into FARA territory. To the extent the contact is unrelated to the company'south ain 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 organisation partner, and so the LDA exemption also will non apply.
Private sector lobbying on an issue that is securely connected to a foreign regime'southward interests. Global companies ofttimes face commercial issues that are intertwined with governmental bug. For example, companies often have legitimate business reasons to foyer for or against sanctions on particular countries, or to encourage the U.s. to prefer specific trade policies directed at particular countries. It may seem natural to coordinate that lobbying with the government of the affected state, just working also closely with a foreign regime or its agents tin create FARA risks. What if the foreign government "requests" that you target your activities in a particular way? Even if your company has a scrupulous LDA compliance program, the LDA exemption may not be available if the activities principally benefit the foreign government, despite your own parallel commercial involvement.
Requests from a foreign embassy, or from other foreign regime officials, to arrange meetings or to provide strategic advice regarding a policy matter before the U.S. regime. Depending on the particulars, including whether the advice is rendered within the Us, it is possible that advising on influencing U.S. policy or public opinion could trigger registration. Arranging meetings also likely would trigger registration.
Business organization development activities involving strange clients. It is non unusual for law firms, public relations firms, consulting firms, and government contractors that do business around the world to be asked past foreign clients for favors, such as making an introduction to officials or thought leaders in the United States, providing advice on a dispute with the U.S. government, or helping with media relations or other staff support for a client's visits in the U.s.a.. While these may seem similar routine client relations activities meant to strengthen relationships, they could trigger FARA registration, depending on the circumstances.

Although most major corporations have elaborate compliance manuals and training efforts, FARA is often a blind spot that is absent-minded from corporate compliance programs. In light of recent enforcement trends, nigh companies that have 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-abuse and government affairs policies.

Covington has one of the nation's virtually experienced and long-standing FARA practices, which includes attorneys in our Election and Political Law and White Neckband Defense practice groups. The business firm litigated and won a rare civil instance limiting the scope of DOJ's authority under FARA, in Attorney General of the Us 5. Covington & Burling. The firm routinely advises U.South. and international clients on compliance with FARA, obtains advisory opinions from the FARA Unit, represents clients in FARA audits and internal investigations, and defends clients defendant of violating FARA.

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This information is non intended as legal advice. Readers should seek specific legal communication earlier acting with regard to the subjects mentioned herein.