United States: DOJ Signals Once More That FARA Is An Enforcement Priority

In another indication of the U.S. Department of Justice's increased focus on the Foreign Agents Registration Act (FARA), Assistant Attorney General John Demers announced yesterday that the Department is overhauling its FARA enforcement unit and would assign a former prosecutor on Special Counsel Robert Mueller's team, Brandon L. Van Grack, to oversee it. 

The reorganization shows that the Department has shifted "from treating FARA as an administrative obligation and regulatory obligation to one that is increasingly an enforcement priority," Mr. Demers told a white-collar fraud conference in New Orleans yesterday. "We're being more aggressive about who we're requiring to register and we're confronting registrants who are resistant to registering," Demers said to reporters.

Given DOJ's stated policy that the "cornerstone of the [FARA] Registration Unit's enforcement efforts is encouraging voluntary compliance," Van Grack's appointment is notable in light of his background as a high-profile prosecutor. Van Grack was on the prosecution team in the case against former Trump campaign chairman Paul Manafort, which included FARA violations, as well as the case against former national security advisor Michael Flynn, for making false statements in connection with the FBI's investigation into coordination between the Trump campaign and Russia's efforts to interfere with the 2016 presidential election.  Van Grack is now a deputy chief in the National Security Division's Counterintelligence and Export Control Section, which, among other things, oversees investigations and prosecutions of espionage statutes. Tapping him to lead the team focused on FARA enforcement signals that the Department will not shy away from criminal investigative tools, in addition to FARA's various administrative functions, in order to enforce the Act.

FARA is a disclosure statute that requires persons acting as agents of foreign principals in political or quasi-political capacity to register with DOJ and make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts, and disbursements in support of these activities. The purpose of the law is to protect the national defense and foreign relations of the United States, ensuring that the American public and its lawmakers know the sources of information intended to sway U.S. public opinion, policy, and laws.

Historically, there were few criminal prosecutions under FARA:  between 1966 and 2015, the Department only brought seven prosecutions for FARA violations. For decades FARA remained largely below the radar of the public and business community – and its scope was not well understood. That changed in the aftermath of the 2016 election, amid concerns about Russian interference and FARA-related charges stemming from the Special Counsel's inquiry. Most prominently, former Trump campaign chairman Paul Manafort pleaded guilty to conspiracy to defraud the United States in connection with his failure to register under FARA and to making various FARA-related false statements and misrepresentations to DOJ. Manafort's associate, Richard Gates, also pleaded guilty to FARA-related charges.  Altogether, the Department has charged at least six cases involving FARA since 2017.

But the number of criminal prosecutions is just one measure of FARA enforcement. In January, the Department secured the largest-ever settlement in connection with an alleged FARA violation – a prominent international firm agreed to pay $4.6 million to settle a Justice Department investigation into whether work it did on behalf of the Ukrainian government violated FARA. It also agreed to develop robust policies and procedures for ensuring FARA compliance and responding to government inquiries. 

Last November, the Department also announced that it would seek to use FARA and related criminal and civil tools as part of the Department's China Initiative, which, among other things, seeks to create transparency around Chinese influence on the U.S. government policy, academic institutions, and the media. One notable aspect of this Initiative has been to put the business community on notice that acting at the behest of the Chinese government to influence persons in the United States could trigger obligations to register under FARA.

The number of FARA registrations has also surged in recent years as individuals and businesses became more aware of their obligations under the law. Whereas there were only 276 active registrants at the end of 2013, that number ballooned to 446 by March 6, 2019 – an increase of more than 60 percent. These recent registrations, ranging from foreign, state-aligned television networks, including a U.S. contractor for Russia's RT and the U.S. division of China's CGTN, to highly regarded U.S. professional services firms with foreign clients, illustrate the breadth of FARA's registration and disclosure obligations. There has also been a marked uptick in the number of advisory opinions provided by the FARA Unit in recent years, a signal that more individuals and companies are aware of their potential obligations under FARA and are taking steps to ensure they understand which of their activities might require registration.

It remains to be seen what tools the Department will deploy as part of its renewed focus on FARA enforcement.  An uptick in criminal investigations may be one outcome of the increased attention being paid to FARA, but, in light of the FARA Unit's focus on encouraging voluntary compliance, a more significant aspect of DOJ's strategy is likely to involve more aggressive efforts to identify potential registrants and persuade them to register in appropriate cases. Although DOJ's FARA Unit does not have subpoena authority, it can and frequently does send inquiry letters to persons it believes may have an obligation to register. Failure to respond and cooperate with such voluntary requests may result in a referral to the FBI for investigation of possible criminal violation where there is sufficient credible evidence of a willful disregard of a registration obligation. Even in cases where there is not a willful violation of FARA's registration requirement, DOJ can pursue civil action to enjoin a person from acting as an agent of foreign principal. 

In addition to being more aggressive about identifying potential registrants, DOJ also could make greater use of FARA's books and records provisions, which permit DOJ and the FBI to conduct unannounced inspections of registrant's records related to their work on behalf of a foreign principal, to ensure that existing registrants are adequately and accurately meeting their registration and disclosure obligations under the law.

FARA is an expansive law, and, as we've written before, its scope has not been widely understood. As a result, companies and individuals working with foreign clients too often are not in strict compliance. Companies and individuals who work with foreign clients should consider FARA anytime their activities might be seen as intended to influence the U.S. government or public, or if their work involves advising foreign clients on how to so. The steady drumbeat of developments related to FARA make clear that enforcement of the statute will not soon wane, and that FARA will need to be incorporated in corporate compliance programs.  

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions