On December 20, 2024, the Department of Justice (“DOJ”) released a Notice of Proposed Rulemaking (“NPRM”), which seeks to amend and clarify regulations promulgated under the Foreign Agents Registration Act (“FARA”). The DOJ began the regulatory process of updating FARA’s implementing regulations three years ago, and release of the proposed new rules has been highly anticipated by political law practitioners and the regulated community alike. 

The NPRM proposes some significant changes, including to a key exemption to registration that has long been relied upon by commercial and nonprofit entities, as well as to the requirements for filing informational materials with the DOJ. The NPRM also overturns a nearly 40-year-old advisory opinion that requires agents of foreign tourism bureaus to register as foreign agents. It is likely that some of the proposed changes, should they become adopted, will be the subject of litigation in light of the US Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo that narrowed the deference that federal courts must apply to agency rulemaking. This client alert outlines the most significant proposed changes.

Registration Exemptions

Several of the most notable proposed changes are to two of FARA’s eight registration exemptions. Generally, these exemptions permit those engaged in activities covered by FARA to avoid registration if certain conditions are met. 

The statutory registration exemption most heavily addressed in the NPRM is often referred to as the “commercial exemption,” specifically the exemption at 22 U.S.C. § 613(d)(2) for “activities not serving predominantly a foreign interest.” This exemption is frequently invoked by foreign organizations operating within the US, including state-owned entities, as well as US nonprofits accepting foreign funds. The NPRM proposes adopting three significant revisions to the regulations interpreting what it means to engage in “activities not serving predominantly a foreign interest.” The first proposed change would clarify that the exemption applies to noncommercial activities, such as those conducted by nonprofit organizations, as well as commercial activities. 

The second proposed change would create four exclusions to this exemption, meaning that those who fall within one (or more) of the proposed exclusions would be unable to avail themselves of the FARA registration exemption. For example, under the first proposed exclusion, if the intent or purpose of an agent’s activities is to benefit the political or public interests of a foreign government or political party, then that agent could not claim exemption from registration under the commercial exemption’s second clause. 

The third proposed change would apply when none of the proposed exclusions are triggered. In those circumstances, the DOJ proposes adopting a totality-of-the-circumstances test, relying on a non-exhaustive list of common factors to determine whether the activities in question predominantly serve a foreign or domestic interest. Such factors include, for example, whether the public and relevant government officials already know about the relationship between the agent and the foreign principal, whether the commercial activities further the commercial interests of a foreign commercial entity more than those of a domestic commercial entity, or the degree of influence (including through financing) that foreign sources have over domestic nonprofits. The second and third proposed changes, if ultimately adopted, will likely be the subject of litigation given that FARA’s statutory language does not contain or otherwise indicate that certain activities are excluded from this exemption.

Finally regarding the commercial exemption, the NPRM states that the DOJ now believes that promoting bona fide recreational or business travel to a foreign country falls within the meaning of “private and nonpolitical activities in furtherance of the bona fide trade or commerce.” Therefore, those who only promote recreational or business tourism in foreign countries would not be required to register under FARA should the proposed rules be adopted. This is a notable departure from the DOJ’s past guidance which had indicated that those engaged in tourism promotion are often required to register.

The second statutory registration exemption addressed in the NPRM provides an exclusion from FARA registration for lawyers who engage or agree to engage in legal representation of a disclosed foreign principal before a court or federal agency. In the NPRM, the DOJ states that practitioners have expressed frustration with the lack of clarity surrounding when activities outside of the courtroom or agency hearing room may still be covered by the exemption. The NPRM’s proposed rule would clarify that the attorney of record in a covered proceeding may engage in certain outside activities within the bounds of normal legal representation, such as communicating with the press, without losing this exemption provided that these activities may not include seeking to persuade persons not involved in the proceeding to adopt or change foreign or domestic US policy.

Informational Materials

Within the NPRM, the DOJ has also proposed what it characterizes as a “comprehensive overhaul” of regulations concerning informational materials. Under FARA, an agent who distributes informational materials to two or more persons must file two copies of those materials with the DOJ within 48 hours and likewise must ensure, regardless of the number of recipients, that such materials contain a conspicuous statement disclosing that they are being distributed on behalf of the foreign principal. The proposed rules would also clarify that requests for information or advice from an agency or official of the government, even when they pertain only to scheduling meetings to discuss the request, must contain a conspicuous disclosure statement. This is another significant departure from current practice in the regulated community.

Other Proposed Changes

The NPRM also proposes a series of revisions to FARA’s implementing regulations that focus on modernizing the filing and advisory opinion processes, as well as the DOJ’s FARA Unit operations. Additionally, the NPRM includes a discussion on the DOJ’s decision to refrain from adopting the common-law definition of agency or to codify its existing guidance on how “agency” under FARA is interpreted, as well as the DOJ’s decision to forego narrowing the definition of “political consultant” under the statute.

What’s Next?

The NPRM was formally published in the Federal Register on January 2, 2025, triggering a public comment period of 60 days. Once the public comment period has closed, the DOJ can finalize its updated rules. While this is the standard process for notice and comment rulemaking under federal law, it is particularly noteworthy in this instance given that President-Elect Donald Trump will be in office once the comment period ends. It is unclear at present whether President-Elect Trump’s DOJ will have the appetite or desire to implement the particular changes proposed in this NPRM, or whether his administration will seek to vacate or finetune the proposed modifications. The Dentons Political Law team will continue to monitor the status of the proposed rules, so please do not hesitate to reach out if you have questions about any possible consequences of the proposed FARA updates.