Good Counsel: Agents, Principals, and FARA Risk
Why associations can’t ignore the Foreign Agents Registration Act.
The Foreign Agents Registration Act has attracted significant attention in recent years as the Department of Justice (DOJ) has secured high-profile convictions of people associated with the Trump administration, including Paul Manafort and Richard Gates. FARA is a disclosure law aimed at uncovering the activities of “foreign agents” working for “foreign principals” to influence U.S. officials or the American public. FARA was enacted in 1938 to shed light on Nazi propagandists and was later used to counter communist activities.
You might think it unlikely that your association’s routine activities present similar propaganda risks. Nonetheless, FARA may apply to a wide range of nonprofit efforts, including:
- receiving a grant from a foreign government or foreign government-controlled entity for U.S. activities
- becoming a member of a foreign organization and agreeing to work on joint programs, especially when a foreign government may influence the organization’s activities
- agreeing to help a foreign nonprofit organization influence the U.S. public or government about public policy issues, even if those activities serve the interests of both organizations.
An organization that qualifies as a foreign agent has significant compliance obligations. Among other things, it must register with DOJ, file detailed reports and copies of informational materials it distributes on behalf of the foreign principal, and retain a wide range of documents relating to its activities.
FARA’s broad definitions give it an expansive reach. For example, a foreign principal can be a foreign government or political party, a corporation organized under the laws of a foreign country or having its principal place of business there, or even an individual from another country. A foreign agent is any person or entity that acts within the U.S. at the order or request or under the direction of a foreign principal (directly or through an intermediary) and takes any of these actions:
- engages in political activities (attempting to influence the U.S. government or the U.S. public about policy issues)
- acts as a political consultant, public relations counsel, or a publisher/distributor of information
- solicits, collects, or distributes funds for the foreign principal
- represents the foreign principal before Congress or executive agencies.
FARA violations can result in fines or criminal sanctions. Fortunately, there are a few safe harbors. DOJ advisory opinions acknowledge that a nonprofit must, in fact, act as the agent of a foreign principal to trigger FARA. Mere participation or membership in an international organization does not raise compliance concerns.
FARA also includes a few limited but complicated exemptions. For example, exemptions exist for organizations that act exclusively to advance religious, academic, or scientific pursuits; engage in activities that promote trade or commerce; or register under the federal Lobbying Disclosure Act (provided the foreign principal is not a foreign government or a foreign political party).
Commonsense precautions, such as refusing to undertake U.S. policy-oriented activities at the behest of a foreign organization, can help a nonprofit avoid FARA risks.
If you think that your organization’s activities might cause it to be a foreign agent, consultation with counsel familiar with FARA is advisable. Determining whether an agency relationship or a FARA exemption exists often requires careful consideration of DOJ advisory opinions. In a close case, an organization may request an advisory opinion to confirm whether its activities are covered by FARA.