United States: DOJ Unveils FARA Advisory Opinions

James D Har is a Senior Counsel in Holland & Knight's Washington D.C. office

Ronald A Oleynik is a Partner in Holland & Knight's Washington D.C. office

Christopher DeLacy is a Partner in Holland & Knight's Washington D.C. office

HIGHLIGHTS:

  • A September 2016 audit report by the U.S. Department of Justice (DOJ) Office of Inspector General recommended more transparency regarding compliance and enforcement of the Foreign Agents Registration Act (FARA).
  • To that end, the DOJ's FARA Registration Unit recently posted advisory opinions that it has issued directly to private parties since Jan. 1, 2010, as well as three older opinions that were previously summarized on their website.
  • The advisory opinions cover a number of FARA topics, including the Lobbying Disclosure Act (LDA), legal, commercial and other exemptions from filing.

The U.S. Department of Justice (DOJ) Office of Inspector General in September 2016 published an audit report regarding compliance and enforcement of the Foreign Agents Registration Act (FARA). The Audit Report recommended more transparency regarding the advisory opinions issued directly to private parties by DOJ's FARA Registration Unit. To that end, the FARA Registration Unit recently posted advisory opinions that it has issued since Jan. 1, 2010, as well as three older opinions that were previously summarized on their website.

DOJ regulations implementing FARA give parties the ability to make inquiries of the FARA Registration Unit concerning the application of the law to contemplated activities and the Department's present enforcement intentions with respect to those activities. See 28 C.F.R. §5.2. In order to publish these opinions while protecting confidentiality of parties seeking guidance, the FARA Registration Unit has redacted the identities of the parties and any personal identifying or proprietary information from the opinions.

The FARA Registration Unit is careful to state that these letters are not intended to create any substantive or procedural rights, privileges or benefits enforceable in any administrative, civil or criminal matter. Still, the selected opinions provide a useful look at DOJ's analysis under FARA. Of the opinions published, there were:

  • 20 opinions regarding the applicable agency relationship (22 U.S.C. §611(a) - (d)). Most of these opinions either confirmed no obligation to register under FARA or asked for more information. DOJ found an obligation to register in only five of these opinions:

    • Aug. 31, 2015 – U.S. fundraising for foreign political candidate
    • Nov. 8, 2012 – political activity for foreign government by U.S. non-profit entity
    • Oct. 13, 2011 – promoting tourism on behalf of foreign government
    • Aug. 17, 2010 – seeking a waiver of sanctions for foreign government
    • July 19, 1988 – political activity (promoting investment) on behalf of foreign government
  • 10 opinions regarding the commercial exemption (22 U.S.C. §613(d)). DOJ usually allowed the claimed commercial exception. In one noteworthy opinion, dated July 12, 2017, DOJ opined that a director of a foreign-owned company subject to a Special Security Agreement with the Defense Security Service was entitled to claim the commercial exemption. DOJ rejected the commercial exemption in just two of these opinions:

    • Feb. 9, 2018 – strategic advice and direct outreach on behalf of a state-owned, foreign bank
    • Jan. 20, 1984 – advocacy for state-owned tourist board (deemed political propaganda)
  • eight opinions regarding the legal exemption (22 U.S.C. §613(g)). These cases tended to involve international legal issues such as sanctions, export control and national security reviews on foreign investment. DOJ rejected the legal exemption in just two of these opinions:

    • Dec. 3, 2012 – lobbying Congress in connection with a matter under review by the Committee on Foreign Investment in the United States (CFIUS)
    • Dec. 10, 2010 – meetings with the State Department seeking waiver related to an international tax matter
  • eight opinions regarding Lobbying Disclosure Act (LDA) exemption (22 U.S.C. §613(h)). DOJ rejected the LDA exemption in the majority (five) of these opinions:

    • April 9, 2013 – political activities on behalf of a state-owned, foreign bank (seeking a license from the Office of Foreign Assets Control (OFAC)
    • Dec. 3, 2012 – two opinions on this date, each finding a foreign government as principal beneficiary
    • Feb. 29, 2012 – foreign government as principal beneficiary
    • Jan. 20, 2010 – foreign government found to be principal beneficiary because of its significant investment in the client foreign trade association
  • two opinions regarding the exemption based on religious, scholastic, fine arts or scientific pursuits (22 U.S.C. §613(e)). DOJ rejected this exemption in one of these opinions:

    • July 12, 2016 – political activities on behalf of foreign government controlled foundation
  • one opinion regarding the national security exemption (22 U.S.C. §613(f)). DOJ rejected the national security exemption in that opinion dated May 18, 2012. Interestingly, DOJ noted that this exemption is available only where the President has designated a country as being vital to the defense of the United States – and that no country has been so designated since 1946.
  • one opinion regarding the Attorney General exemption (22 U.S.C. §612(f)). DOJ rejected the exemption in that opinion dated June 29, 2017. The exemption request related to disclosure of information that may endanger the foreign parties. DOJ expressed a willingness to shield some personally identifiable information, but it concluded that it lacked authority to waive disclosure of the identity of the foreign principal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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