United States: Representing Foreign Interests in the United States: FARA Requirements

The United States government has long been concerned with how U.S. persons represent foreign political and economic interests in the United States. A crucial component of this oversight is the Foreign Agents Registration Act ("FARA"), which regulates the activities of so-designated "agents of foreign principals" engaged in various types of political advocacy within the United States. The failure to observe FARA can result in serious sanctions. The following article provides a general summary of FARA and the necessary steps to comply with its requirements.

Under FARA, a foreign principal includes a government of a foreign country, a foreign political party, a person outside of the United States (other than U.S. citizens), or a foreign partnership, association, corporation, etc. having its principal base of business in a foreign country. An "agent of a foreign principal" means any person (i.e., individual, partnership, association, etc.) who acts at the order, request, or under the direction or control of a foreign principal, or whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal. If any of these criteria are met, then FARA applies if that person:

• Engages within the United States in political activities for or in the interests of such foreign principal;

• Acts within the United States as a public relations counsel for or in the interests of such foreign principal;

• Acts within the United States as a publicity agent or political consultant for or in the interests of such foreign principal;

• Solicits or dispenses anything of value within the United States for the foreign principal; or

• Represents the interests of the foreign principal before any agency or official of the U.S. government.

FARA provides additional guidance as to what type of public activities fall under its jurisdiction. For example, a U.S. person would be considered a "public relations counsel" if he/she informed, advised, or in any way represented a principal in any public relations matter pertaining to political or public interests, policies, or relations of such principal. Alternatively, FARA describes a "publicity agent" as a person who engages directly or indirectly in the publication or dissemination of information of any kind, including publication by means of advertising, books, periodicals, newspapers, lectures, broadcasts, motion pictures, or otherwise.

FARA requires that an agent of a foreign principal register within 10 days of agreeing to his/her appointment. In most instances, the registration statement will be filed by the entity that will be engaging in and overseeing the political and public relations activities. The registration statement further requires full disclosure of the registrant’s corporate status, a comprehensive statement describing the registrant’s business, and copies of all agreements (including summaries of oral agreements) articulating the nature of the agent/principal relationship.

In addition to this original registration statement, the agent of a foreign principal also is required to submit an update of its activities every six months. The other major reporting requirement under FARA regards any publications or other printed materials produced by the agent of the foreign principal. All printed documents and other informational materials either mailed or placed by an agent in an instrumentality of interstate or foreign commerce must be filed with the Attorney General within 48 hours of their initial transmittal. Such informational materials further must contain a conspicuous statement that the materials are distributed by the agent on behalf of the foreign principal.

Not surprisingly, FARA exempts accredited diplomats, consular officials, and other recognized foreign government representatives from its requirements, as well as persons engaged only in furtherance of certain philanthropic activities (religious, scholastic, academic, scientific, fine arts). Furthermore, a person engaging or agreeing to engage only in private and nonpolitical activities in furtherance of the bona fide trade or commerce of such foreign principal is also not subject to the registration requirement. Finally, the FARA exemption applies to any agent who has engaged in lobbying activities and has registered under the Lobbying Disclosure Act of 1995 ("LDA") in connection with the agent’s representation of such person or entity. Under no circumstances, however, will the LDA exception be recognized if the foreign principal is a foreign government or foreign political party. U.S. lobbyists representing foreign commercial interests often are able to take advantage of the LDA exemption and avoid the more onerous FARA registration requirements.

Failure to abide by FARA can have serious repercussions. Willful violations of FARA may be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both. Please contact the Reed Smith Export, Customs, and Trade team if you are contemplating some sort of formal foreign representation to ensure compliance with FARA requirements.

This article is presented for informational purposes only and is not intended to constitute legal advice.