The US Foreign Agents Registration Act (FARA): Key Issues to Watch in 2025
Notice of Proposed Rulemaking Expected in January 2025
At the FARA Conference, Deputy Assistant Attorney General (DAAG) Eun Young Choi announced that DOJ will publish its long-awaited Notice of Proposed Rulemaking (NPRM) to revise FARA’s implementing regulations in January, just over three years after the Advance Notice of Proposed Rulemaking (ANPRM) was issued. FARA Unit Chief Evan Turgeon said that he expects the NPRM to address issues raised in the ANPRM, which proposed to address, among other topics, the scope of agency, the commercial exemption, and how to label informational materials in the context of social media communications.
Application of 22 U.S.C. § 613(d)(2) – Activities Not Serving Predominantly a Foreign Interest
Multiple DOJ officials signaled that the NPRM would likely revise the regulation interpreting the exemption in 22 U.S.C. § 613(d)(2) (“(d)(2)”) for “activities not serving predominantly a foreign interest” to align with the FARA Unit’s current view of the statute. The provision has commonly been referred to as a second prong of the “commercial exemption,” and the existing regulation interpreting it (28 C.F.R. § 5.304(c)) exempts even political activities undertaken on behalf of a foreign corporation, provided those political activities are neither directed by, nor directly promote the interests of, a foreign government or political party.
In recent advisory opinions, however, the FARA Unit has construed the regulation strictly, and advised registration for political activities conducted on behalf of foreign principals other than foreign corporations with “commercial, industrial, or financial operations.” Indeed, Turgeon characterized the regulation as addressing only one narrow fact pattern (involving a foreign corporation), while the statute itself speaks broadly to exempting political activities, provided the interests they serve are not “predominantly” foreign. Along those lines, CES Acting Chief1 Jennifer Gellie characterized (d)(2) as a “domestic interests” exemption, under which the activity in the United States and its underlying purpose are evaluated together to determine whether such activity benefits a US entity’s interests more than a foreign entity’s interests. In light of this commentary, it is likely that the NPRM will propose to revise the regulations under (d)(2) to capture this “domestic interest” framework, and making all the more important the exemption under 613(h) for registrants under the Lobbying Disclosure Act (LDA). Since its inception in 1995, the LDA has required public disclosure of qualifying lobbying activity under that statute while exempting registration under FARA (which requires more detailed disclosures). Most lobbying on behalf of foreign commercial entities has been disclosed through the LDA, not FARA.
Ongoing Focus on Enforcement & Compliance
As DAAG Choi said, FARA “enforcement has never been more robust.” In many ways, 2024 was an extraordinary year for FARA enforcement, and DOJ officials expect to continue this trend, notwithstanding the change in Administration.
High-Profile Prosecutions
DOJ pursued several high-profile prosecutions for violations of FARA throughout 2024. In May, Congressman Henry Cuellar and his wife were indicted on allegations that they participated in two bribery schemes involving an Azerbaijani state-owned oil company and a Mexican bank. Cuellar was charged with violating 18 U.S.C. § 219 for acting as an agent under FARA while serving as a public official. The same statute was charged against Senator Robert Menendez (who was convicted at trial for conspiring to advance Egypt’s interests as their agent). In September, Linda Sun, a former New York state government official (most recently serving as deputy chief of staff to the governor), was charged with violating FARA for allegedly acting as an undisclosed agent of the People’s Republic of China (PRC) and the Chinese Communist Party (CCP). The indictment alleges that Sun engaged in numerous political activities at the request of PRC officials, including blocking representatives of the Taiwanese government from having access to New York State officials, arranging meetings for visiting delegations from the PRC government with New York State officials, and changing New York State messaging in ways favorable to the PRC. In return, she allegedly received benefits such as tickets to events, favorable treatment of her husband’s PRC-based business activities, and Nanjing-style salted ducks prepared by the private chef of a PRC government official. Also in September, two Russian nationals employed by RT, a Russian state-controlled media outlet, and who operated from abroad, were charged with violating FARA for allegedly laundering money to fund a US content-creation company that spread pro-Russian messaging.
Expanded Compliance & Enforcement Tools
In addition to noting the first criminal charges brought under § 219 in the Menendez and Cuellar cases, DAAG Choi noted other “firsts,” such as the first criminal misdemeanor plea under FARA and the first Deferred Prosecution Agreements (DPAs) in a FARA case, which we previously discussed in a prior Legal Update. Those lesser criminal resolutions, together with NSD’s expanded autonomy to issue subpoenas in the name of the grand juries for the District of Columbia, suggest an increased willingness to use criminal legal process to enforce the statute (especially in the absence of civil, compulsory process).
DOJ continues to rely on FARA inspections to drive compliance with the statute. Turgeon said the FARA Unit conducted 26 inspections in 2024, the most since 1977. He indicated that the Unit intentionally selects targets for inspections, often based on an assessment that those registrants may not be meeting their disclosure obligations.
DC Circuit’s Decision in Wynn
As we discussed in a September Legal Update, in June 2024, the DC Circuit held that casino magnate Steve Wynn could not be compelled to register under FARA after he had ceased acting as an agent of a foreign principal, relying on the court’s 1987 precedent in United States v. McGoff. The decision limits DOJ’s civil enforcement authority, since agency relationships often come to light after their conclusion, and unregistered agents could avoid being required to register by terminating their relationship with a foreign principal. DOJ petitioned for rehearing en banc, which the DC Circuit denied on December 4. At the next day’s FARA Conference, DOJ officials reiterated that Wynn is binding law in only the DC Circuit, and that DOJ would consider seeking a civil injunction in other jurisdictions where the facts support it.
Moreover, under McGoff, FARA’s criminal statute of limitations is five years, meaning that an agent remains vulnerable to investigation and prosecution for willfully evading registration, even after the agency relationship terminates. Terminating the agency relationship at the first sign of a DOJ investigation may not be a viable option for more established agency relationships (such as those between a foreign parent corporation and its US subsidiary and their agents), and in certain circumstances could itself signal consciousness of guilt to DOJ and provoke a criminal investigation.
All of this is to say, although Wynn may be settled law in the principal jurisdiction for FARA enforcement, principals and agents would be wise not to draw their compliance policy by tracing the chalk outline of DOJ’s civil injunction authority.
Increased Attention to Corporate Enforcement
At the FARA Conference, multiple DOJ officials highlighted the increased attention by the Department to corporate compliance—especially in the national security context—and its implications for FARA enforcement, specifically. Ian Richardson, NSD’s newly minted Chief Counsel for Corporate Enforcement, spoke at the FARA Conference for the first time. According to those officials, FARA is an emerging area where companies have exposure, including foreign companies acting as foreign principals. Although FARA itself places the onus of registration on the agents of foreign principals (rather than the principals themselves), a scheme to conceal the agency relationship from registration could expose the principal as well as their agent to investigation and prosecution under traditional principles of criminal law.
Although the DOJ officials who spoke disclaimed prioritizing any particular sector or industry, DAAG Choi noted a steady increase in registrations involving corporate foreign principals such as banks, energy companies, and airlines. And Turgeon noted a recurring theme: sovereign wealth funds that pursue foreign government objectives beyond profits may be required to register, consistent with DOJ’s broader focus on corporate enforcement. DOJ officials also encouraged companies to voluntarily self-report (and presumably correct) missed FARA registrations or other errors in order to avoid tougher penalties.
Legislative Priorities
DOJ’s legislative priorities remain the same since last year, and include: (1) obtaining authority to issue civil investigative demands; (2) instituting civil penalties for FARA violations; (3) eliminating the LDA exemption under FARA (discussed above); and (4) “fixing” the statute to compel retroactive registrations, overruling McGoff and the DC Circuit’s ruling in Wynn.
1 The FARA Unit is part of the Counterintelligence and Export Control Section (CES) (which, in turn, is within the National Security Division (NSD) of DOJ), and the Chief of the FARA Unit reports to the Chief of CES.
