DOJ Releases Much-Anticipated Proposed Amendments to Foreign Agents Registration Act (FARA) Regulations

Introduction

On December 20, 2024, the U.S. Department of Justice (DOJ) announced its long-awaited proposed amendments to the regulations adopted under the Foreign Agents Registration Act (FARA) in a Notice of Proposed Rulemaking (NPRM) submitted to the Federal Register.^[1] FARA (the “FARA Statute,” or “Statute”),^[2] authorizes the U.S. Attorney General to adopt regulations to enforce the Statute. Those regulations (the “FARA Regulations,” or “Regulations”) were last amended in 2007.^[3] With the announcement of proposed regulatory amendments, DOJ also published the unofficial version of the NPRM, while the official version is still pending publication in the Federal Register. Amended final regulations are expected to be released following publication of the official version of the NPRM and a subsequent 60-day comment submission period. 

What You Need to Know

• Proposed FARA regulatory amendments apply to foreign corporations, state-owned enterprises, think tanks, non-governmental organizations, sovereign wealth funds, and former U.S. Government officials acting as consultants to foreign governments, all of whom may potentially benefit from the “commercial exemption” to the requirement to register with the U.S. Department of Justice’s FARA Unit.
• The proposed legal representation exemption offers greater clarity on what activities by legal counsel representing foreign principals may be exempt from registration with the U.S. Department of Justice’s FARA Unit.
• Proposed FARA regulatory amendments bring current the definition of “informational materials” to align with modern communication methods, including social media, and update labeling requirements to enhance transparency.

• The proposed amendments come at a time of increased FARA enforcement activity, which is likely to continue with the inauguration of a new Presidential administration and appointment of new U.S. Department of Justice leadership.

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The NPRM proposes substantive changes to the FARA Regulations in several key areas that will significantly impact both the FARA-regulated community and DOJ’s enforcement of the Statute. As discussed below, three of the most significant changes concern: (1) the “commercial exemption” to FARA’s registration requirements under 22 U.S.C. § 613(d); (2) the “legal representation exemption” to FARA’s registration requirements under 22 U.S.C. § 613(g); and (3) proposed changes to how “informational materials” are defined and labeled under 22 U.S.C. § 614.

This article reviews these proposed changes and their implications for those subject to FARA, including, but not limited to, agents and foreign principals, as defined under the Statute. The NPRM’s commentary and explanation for DOJ’s proposed amendments offer much-needed clarification on the scope of the Statute and its Regulations. Additionally, with the increase in FARA enforcement over the past decade, and the limited caselaw prior to its resurgence, DOJ’s commentary provides important context and guidance, complementing the advisory opinions released from time to time by the DOJ unit in the National Security Division responsible for FARA enforcement and administration (the “FARA Unit”). Thus, the NPRM’s commentary on the proposed amendments will help potential agents of foreign principals, the foreign principals themselves, and legal counsel to both, better understand the scope of potentially registrable FARA activity and improve their ability to navigate and monitor compliance with FARA’s registration requirements.

The December 13, 2021 Advance Notice of Proposed Rulemaking (ANPRM)

The recently released NPRM follows DOJ’s release of an Advance Notice of Proposed Rulemaking (ANPRM) three years ago, on December 13, 2021.^[4] The ANPRM offered an opportunity for public comment on 19 questions organized within six topical areas DOJ identified for potential regulatory amendment: (1) the definition of the concept of “agency” within the Statute; (2) various exemptions to the registration requirement;^[5] (3) the advisory opinion procedure; (4) labelling requirements for agents posting information materials; (5) the DOJ’s use of an online e-filing system for registrants; and (6) miscellaneous changes to the Statute. In response, DOJ received 29 comments from a variety of law firms and non-profit organizations, which helped to inform DOJ’s latest proposal in the NPRM.^[6]

The December 20, 2024 Notice of Proposed Rulemaking (NPRM)

Below, we analyze the most significant proposed amendments in three areas: (1) the “commercial exemption”; (2) the “legal representation exemption”; and (3) labelling requirements.

1. Proposed amendments to the “commercial exemption” under § 613(d)

The FARA Statute presently exempts from the registration requirements persons engaging, or agreeing to engage, in (1) “private and nonpolitical activities in furtherance of the bona fide trade or commerce of [a] foreign principal,” under § 613(d)(1); and (2) “other activities not serving predominantly a foreign interest,” under § 613(d)(2).^[7] The proposed amendments to regulations interpreting each of these provisions are explained below.

1. Proposed changes to the regulation interpreting § 613(d)(1) relating to “private and nonpolitical activities in furtherance of .  . . trade or commerce”

The Regulations presently in force deem commercial activity on behalf of a foreign principal “private,” and therefore exempt from registration, even if the foreign entity on whose behalf the agent is acting is a state-owned or state-controlled entity, “so long as the activities do not directly promote the public or political interests of the foreign government.”^[8] 

The NPRM notes an important revision in the FARA Unit’s interpretation of this regulation with respect to promotion of tourism: “In the past, the Department has taken the position that such activities are political because” it was thought that “recreational tourism ‘creates an influx of capital and a host of jobs’ for the local population and has therefore required registration for such activities.”^[9] However, “[t]he Department has reconsidered that position in the course of analyzing revisions to the FARA regulations,” and “now believes that the promotion of recreational or business tourism is too attenuated from the definition of political activities to warrant imposing FARA registration obligations on agents who promote only recreational or business tourism in foreign countries.”^[10]

This will be a particularly welcome announcement for tourist agencies that promote foreign tourism, provided their activity does not veer into political advocacy, remains of a purely recreational or business nature, and is not directed by foreign governments.

2. Proposed changes to the regulation interpreting § 613(d)(2) relating to “other activities not serving predominantly a foreign interest”

The “other activities” that may be exempt from registration can include even “political activities on behalf of a foreign corporation,” and even if that foreign entity is “owned in whole or in part by a foreign government,” provided “the political activities are directly in furtherance of the bona fide commercial, industrial, or financial operations of the foreign corporation,” and are neither (a) “directed by a foreign government or foreign political party,” nor (b) “directly promote the public or political interests of a foreign government or of a foreign political party.”^[11]

Notably, the NPRM agrees with the view of many commenters that clarification of the regulations interpreting § 613(d)(2) is required. As the NPRM explains: 

The Department has grappled for years with how to apply the current regulation to a broad range of complex scenarios, including the increasing use of state-owned enterprises by other countries for geopolitical and strategic purposes; foreign government funding of, and other influence on, think tanks and non-governmental organizations; the consulting work by former, high-ranking U.S. Government officials on behalf of foreign state allies and adversaries; and U.S. activities of sovereign wealth funds.^[12]

Accordingly, the NPRM proposes three amendments to address the regulation relating to the § 613(d)(2) exemption: 

• First, the amendment “would make clear that this exemption applies to commercial and non-commercial entities alike, so long as the predominant interest being served is not foreign.”^[13] Thus, the regulation would clarify that political activities with private think tanks and other non-profits and non-governmental organizations, in addition to state-owned or controlled entities, may be entitled to the exemption.

• Second, the amendment would create four “exclusions” from the exemption—in other words, carve-outs that would render the exemption inapplicable—when the interest served is predominantly foreign, not domestic. Those instances would be when: (a) “the intent or purpose of the activities is to benefit the political or public interests of the foreign government or political party”; (b) “a foreign government or political party influences the activities”; (c) “the principal beneficiary is a foreign government or political party”; or (d) “the activities are undertaken on behalf of an entity that is directed or supervised by a foreign government or political party (such as a state-owned enterprise) and promote the political or public interests of that foreign government or political party.”^[14]

• Third, even if the four above-described exclusions do not apply, the NPRM proposes a list of five non-exhaustive factors that could help to determine that the exemption still is not available because the interest served is predominantly foreign, rather than domestic. These factors are: (a) “whether the public and relevant government officials already know about the relationship between the agent and the foreign principal”; (b) “whether the commercial activities further the commercial interests of a foreign commercial entity more than those of a domestic commercial entity”; (c) “the degree of influence (including through financing) that foreign sources have over domestic non-commercial entities, such as nonprofits”; (d) “whether the activities concern U.S. laws and policies applicable to domestic or foreign interests”; and (e) “the extent to which any foreign principal influences the activities.”^[15]

The proposed changes mark a significant shift in how DOJ will interpret the “commercial exemption” under both subsections (d)(1) and (d)(2). As noted above, it is now clear that merely facilitating private tourism will not be deemed to be per se registrable activity, although such activity undeniably promotes an interest of foreign governments. The language of previous advisory opinions that concluded promoting tourism was registrable will now be subject to more refined analysis. Similarly, the “other activities” that may be exempt, will now be subject to much more detailed analysis, given the three amendments to subsection (d)(2).

2. Proposed amendments to the “legal representation exemption” under § 613(g)

The proposed amendments also clarify the circumstances in which the “legal representation exemption” will permit legal counsel to represent foreign principals without needing to register. The FARA Statute currently exempts from its registration requirements:

Any person qualified to practice law, insofar as he engages or agrees to engage in the legal representation of a disclosed foreign principal before any court of law or any agency of the Government of the United States: Provided, That for the purposes of this subsection legal representation does not include attempts to influence or persuade agency personnel or officials 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.^[16]

The NPRM proposes clarifying amendments to the regulation interpreting § 613(g).^[17] Most significantly, the NPRM provides a new definition for the phrase “legal representation,” which simplifies and makes more clear formerly cumbersome language. Under the new proposed formulation, the kind of “legal representation” deemed exempt from registration would include the normal activity one typically expects of counsel seeking to persuade relevant government authorities in connection with a matter, but not if the activity would constitute a “political activity.”^[18] 

Additionally, the proposed rule would more clearly permit legal counsel to engage in non-political activities “that fall within the bounds of normal legal representation and involve providing information about the aforementioned proceeding, inquiry, or investigation, during the pendency of that proceeding, inquiry, or investigation to persons other than the agency or official decision-makers.”^[19] Qualifying activities may include “making statements outside of the courtroom or agency hearing room,” according to the NPRM.^[20]

These proposed amendments helpfully differentiate between political activities and activities traditionally associated with legal representation. In prior advisory opinions, DOJ had distinguished between exempt legal representation involving informal advocacy before executive agencies, such as to remove sanctions designations,^[21] and non-exempt efforts to influence government officials outside formal proceedings.^[22] The proposed amendments expressly allow legal counsel to engage in non-political actions, such as providing information to government officials or the public during ongoing legal proceedings, without the need for FARA registration. The revised definition of “legal representation” enhances the ability of foreign principals and their counsel to navigate FARA compliance with greater certainty, ensuring that actions falling within standard legal practices are not unnecessarily encumbered by FARA’s registration requirements. 

3. Proposed amendments to labelling requirements for “informational materials” under § 614

Currently, the FARA Statute mandates that anyone required to register as an agent of a foreign principal must file with the Attorney General and appropriately label any “political propaganda” contained within the informational materials.^[23] “Political propaganda” includes “any informational materials for or in the interests of such foreign principal (i) in the form of prints, or (ii) in any other form which is reasonably adapted to being, or which he believes will be, or which he intends to be, disseminated or circulated among two or more persons.”^[24] 

Under the Statute, agents are currently required to file two copies of such material with the Attorney General within 48 hours of the transmittal of such material.^[25] Furthermore, the Statute prohibits any individual required to register from disseminating materials “without placing in such informational materials a conspicuous statement that the materials are distributed by the agent on behalf of the foreign principal, and that additional information is on file with the Department of Justice, Washington, District of Columbia.”^[26]

The modern ways in which “informational materials” may be disseminated have changed significantly since FARA’s enactment in 1938, including through social media. Thus, the NPRM offers “a comprehensive overhaul of FARA regulations regarding ‘informational materials,’ largely to keep pace with technological advances.”^[27] The NPRM therefore proposes a new regulation defining “informational materials” in a way that associates the materials with the concept of “political activities” as defined in the Statute,^[28] and similarly proposes that “political propaganda” have the same definition as “informational materials.”^[29]

Among other things, the new provision would: (1) expand upon the information required to be included in a “conspicuous statement” of disclosure;^[30] (2) require that the labelling be in a readable font size and color;^[31] (3) include the “conspicuous statement” in the byline, signature block, or biographical information of the author of the materials;^[32] (4) include the “conspicuous statement” at the beginning and end of televised or broadcast informational materials (and intermittently if the length exceeds one hour);^[33] (5) provide the “conspicuous statement” on the “home” page and “about” page of an internet website or platform over which a registrant has administrative rights;^[34] and (6) if the person is posting to an internet website or platform over which the registrant does not have administrative rights, include the conspicuous statement in the posts.^[35]

The proposed amendment would also make clear that an agent’s “request” to a U.S. government agency—including scheduling-related communication connected with a request—would require disclosure of the agent’s relationship to the foreign principal.^[36]

Finally, the proposed amendments to FARA’s labeling requirements for “informational materials” would update those requirements, enhancing transparency. The rapid evolution of digital and social media platforms has required DOJ to revise the “informational materials” provisions, ensuring they are current with contemporary methods of disseminating information. At the same time, DOJ has elected not to propose a regulation that would exhaustively list the myriad ways in which informational materials may be transmitted, recognizing that “such a list would become outdated through technological innovation.”^[37]

Conclusion

The three most significant proposed amendments to the FARA Regulations—i.e., to the “commercial exemption,” the “legal representation exemption,” and the “informational materials” requirements—will, if finally adopted, provide welcome clarity on the scope of registrable conduct, and the FARA Unit’s views regarding the appropriate application of the FARA Statute. 

In the post-Chevron era in which we now live, the U.S. Supreme Court is less willing to defer to government agencies’ legal interpretations of ambiguous congressional statutes.^[38] Thus, the future of DOJ’s proposed amendments—even if they are adopted as proposed—cannot be taken for granted. But for now, the NPRM at least provides valuable insight into DOJ’s views on FARA’s scope, which can itself be used productively on behalf of clients in discussions with the FARA Unit.

As we enter 2025, it is evident that FARA’s prolonged period of dormancy is now of just historical interest. Given the proposed revisions to the FARA Regulations, DOJ’s heightened enforcement of the Statute, and ongoing legislative reform proposals, FARA is likely to remain a significant area of enforcement for the foreseeable future. 

About Saul Ewing’s FARA Team

Saul Ewing’s FARA Team has advised clients in responding to U.S. Department of Justice FARA Unit Letters of Inquiry, conducting FARA-related internal investigations, and providing FARA compliance policies and related training. Our FARA Team, which includes Partners who are former federal prosecutors, as well as Counsel and Associates, speak and write on FARA enforcement, and regularly monitor FARA developments.

• Justin C. Danilewitz, Partner, Chair of the White Collar & Government Enforcement Practice

• Aloke Chakravarty, Partner

• Allison Burdette, Counsel

• Mary Hutchings, Associate

• Chris Klein, Associate

• Alicia Pitts, Associate