03-13947. Foreign Agents Registration Act

AGENCY:

Department of Justice.

ACTION:

Final rule.

SUMMARY:

The Department of Justice is amending its existing regulations implementing the Foreign Agents Registration Act of 1938, as amended. The rule establishes new regulations needed as a result of the passage of the Lobbying Disclosure Act of 1995 (LDA) and the Lobbying Disclosure Technical Amendments Act of 1998 (LDTAA), both of which amended the Foreign Agents Registration Act, and makes technical amendments to existing regulations.

DATES:

July 7, 2003.

FOR FURTHER INFORMATION CONTACT:

Heather H. Hunt, Attorney, Registration Unit, Counterespionage Section, Criminal Division, United States Department of Justice, 1400 New York Avenue, NW., Washington, DC 20530, telephone [phone], facsimile [phone]. These are not toll-free numbers.

SUPPLEMENTARY INFORMATION:

Why Is the Department Changing the Foreign Agents Registration Act Regulations?

Under the Foreign Agents Registration Act of 1938 (FARA or the Act), 22 U.S.C. 611-621, agents of foreign principals are required to register with the Department of Justice in order to make periodic public disclosure of their relationship with the foreign principal, activities on behalf of the foreign principal, and receipts and disbursements in support of these activities. In the Lobbying Disclosure Act of 1995, Pub. L. 104-65, 2 U.S.C. 1601-1613 (LDA), and the Lobbying Disclosure Technical Amendments Act of 1998, Pub. L. 105-166 (LDTAA), Congress amended FARA in several respects. First, Congress generally narrowed the scope of FARA to agents of foreign governments and foreign political parties. Under new section 3(h) of FARA, 22 U.S.C. 613(h), agents of foreign principals other than foreign governments or foreign political parties need not register under FARA if such agents engage in lobbying activities and register under the LDA. Second, Congress repealed section 1(q) of the Act, 22 U.S.C. 611(q), which had provided a safe harbor specifying circumstances in which agents of multinational corporations would be exempt from registration under section 3(d)(2) of the Act, 22 U.S.C. 613(d)(2). When Congress authorized registration under the LDA rather than FARA for lobbying activities on behalf of foreign principals other than foreign governments and foreign political parties, section 1(q) became largely unnecessary.

In addition, in the LDA, Congress clarified the applicability of an exemption in section 3(g), 22 U.S.C. 613(g), for legal representation of a foreign principal in certain proceedings. Finally, Congress substituted the term “informational materials” for the term “political propaganda” throughout FARA, except in section 4(e), 22 U.S.C. 614(e), which concerns the dissemination of materials on behalf of the foreign principal, and in section 11, 22 U.S.C. 621, which concerns the filing of a semi-annual report with Congress. These amendments require changes in the FARA regulations.

Did the Department Solicit Public Comments?

On July 9, 1999, a proposed rule was published in the Federal Register (64 FR 37065). Interested persons were afforded the opportunity to participate in the regulatory process. The comment period ended on September 7, 1999. No written comments were received on the proposed rule. Notwithstanding the fact that comments were not received, the Department made minor clarifying adjustments to the proposed rule under 28 CFR 5.304 and 5.307 to more clearly construe the section 3(d)(2) and 3(h) exemptions.

How Does This Final Rule Change the Current Regulations?

The amendments to FARA required changes implementing, among others, sections 3(d)(2), 3(g), 3(h) and 4 of FARA. First, this rule clarifies the reach of section 3(d)(2) in light of the repeal of section 1(q) of FARA. Section 3(d)(2) of the Act exempts from registration under FARA activities of a political nature “not serving predominantly a foreign interest.” Under the rule, political activities of an agent on behalf of a foreign corporation, even if the foreign corporation is owned in whole or in part by a foreign government, where the political activities further the bona fide commercial, industrial, or financial operations of the foreign corporation, are not directed by a foreign government or foreign political party, and do not directly promote the public or political interests of a foreign government or foreign political party, do not require registration under FARA because such activities do not “serve predominantly a foreign interest” for purposes of 3(d)(2). Even after the deletion of section 1(q), any person, including a foreign or domestic corporation, who engages in political activities, not in furtherance of the bona fide commercial, industrial, or financial operations of a foreign corporation, but, on behalf of a foreign government or foreign political party, is required to register under FARA, as these activities will “serve predominantly a foreign interest” and thus not be exempt under section 3(d)(2).

Second, the rule clarifies the circumstances in which agents of foreign principals, other than foreign governments or foreign political parties, can claim the new exemption provided in section 3(h), and it clarifies the reach of the revised “attorneys' exemption” in section 3(g). In addition, the rule strikes the term “political propaganda” wherever it appears in the regulations and substitutes the LDA term, “informational materials.” Finally, the rule makes certain technical amendments to the existing regulations to delete references to other repealed sections of the Act and to enable the Registration Unit to administer the statute more effectively by allowing for electronic filing in the future.

Certifications and Determinations

Regulatory Flexibility Act

The Attorney General, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. The rule primarily affects those persons required to register pursuant to FARA, currently approximately 500 primary registrants and 2,500 individual short form registrants. The rule merely conforms Department regulations to changes made by the LDA and the LDTAA. These acts reduced the number of people who had to file reports with the Department.

Executive Order 12866

This rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department of Justice has determined that it does not constitute “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and accordingly it has not been reviewed by the Office of Management and Budget.

Small Business Regulatory Enforcement Fairness Act of 1996

The Department of Justice certifies that this rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. The rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Executive Order 13132

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

Executive Order 12988

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Plain Language

We try to write clearly. If you can suggest how to improve the clarity of these regulations, contact Heather H. Hunt, Attorney, Registration Unit, Counterespionage Section, Criminal Division, United States Department of Justice, telephone [phone].

List of Subjects in 28 CFR Part 5

• Aliens
• Foreign relations
• Reporting and recordkeeping requirements
• Security measures

Accordingly, the Department of Justice amends Part 5 of title 28 of the Code of Federal Regulations, chapter 1, as follows:

PART 5—ADMINISTRATION AND ENFORCEMENT OF FOREIGN AGENTS REGISTRATION ACT OF 1938, AS AMENDED

1. The authority citation for Part 5 continues to read as follows:

Authority: 28 U.S.C. 509, 510; Section 1, 56 Stat. 248, 257 (22 U.S.C. 620); title I, Pub. L. 102-395, 106 Stat. 1828, 1831 (22 U.S.C. 612 note).

§ 5.5

[Amended]

2. a. Amend § 5.5 in paragraph (d)(10) by adding the words “informational materials,” following “reports,”.

b. Amend § 5.5 in paragraph (d)(11) by adding the words “informational materials,” following “reports,”.

§ 5.100

[Amended]

3. a. Amend § 5.100 in paragraph (c) by removing “1(q),”.

b. Amend § 5.100 in paragraph (d) by removing “1(q),”.

§ 5.200

[Amended]

4. Amend § 5.200 in paragraph (b) by removing the words “Form OBD-63” and adding, in their place, the words “a form provided by the Registration Unit”.

§ 5.201

[Amended]

5. a. Amend § 5.201 in paragraph (a)(1) by removing the words “Form OBD-67” and adding, in their place, the words “a form provided by the Registration Unit”.

b. Amend § 5.201 in paragraph (a)(2) by removing the words “Form OBD-65” and adding, in their place, the words “a form provided by the Registration Unit“”.

§ 5.202

[Amended]

6. a. Amend § 5.202 in paragraph (b) by adding the word “registrable” before the word “activity”.

b. Amend § 5.202 in paragraph (e) by removing the words “Form OBD-66” and adding, in their place, the words “a form provided by the Registration Unit”.

§ 5.203

[Amended]

7. Amend § 5.203 in paragraph (a) by removing the words “Form OBD-64” and adding, in their place, the words “a form provided by the Registration Unit”.

§ 5.204

[Amended]

8. Amend § 5.204 in paragraph (a) by removing the words “Form OBD-68” and adding, in their place, the words “a form provided by the Registration Unit”.

§ 5.205

[Amended]

9. Amend § 5.205 in paragraph (a) by removing the words “OBD-64” and adding, in their place, the words “the supplemental statement form”.

§ 5.206

[Amended]

10. Amend § 5.206 in paragraph (b) by adding the words ”, or if it is filed in an electronic format acceptable to the Registration Unit” following the word “ink”.

11. Revise paragraph (c) of § 5.304 to read as follows:

§ 5.304

Exemptions under section 3(d) and (e) of the Act.

* * * * *

(c) For the purpose of section 3(d)(2) of the Act, a person engaged in political activities on behalf of a foreign corporation, even if owned in whole or in part by a foreign government, will not be serving predominantly a foreign interest where the political activities are directly in furtherance of the bona fide commercial, industrial, or financial operations of the foreign corporation, so long as the political activities are not directed by a foreign government or foreign political party and the political activities do not directly promote the public or political interests of a foreign government or of a foreign political party.

* * * * *

12. Revise paragraph (a) of § 5.306 to read as follows:

§ 5.306

Exemption under section 3(g) of the Act.

* * * * *

(a) Attempts to influence or persuade agency personnel or officials other than in the course of judicial proceedings, criminal or civil law enforcement inquiries, investigations, or proceedings, or agency proceedings required by statute or regulation to be conducted on the record, shall include only such attempts to influence or persuade with reference to formulating, adopting, or changing the domestic or foreign policies of the United States or with reference to the political or public interests, policies, or relations of a government of a foreign country or a foreign political party; and

* * * * *

§ 5.306

[Amended]

13. Amend § 5.306 in paragraph (b) by removing the word “like” and adding, in its place, the word “fall”.

14. Add § 5.307 to read as follows:

§ 5.307

Exemption under 3(h) of the Act.

For the purpose of section 3(h) of the Act, the burden of establishing that registration under the Lobbying Disclosure Act of 1995, 2 U.S.C. 1601 et seq. (LDA), has been made shall fall upon the person claiming the exemption. The Department of Justice will accept as prima facie evidence of registration a duly executed registration statement filed pursuant to the LDA. In no case where a foreign government or foreign political party is the principal beneficiary will the exemption under 3(h) be recognized.

§ 5.400

Filing of informational materials.

15. a. The section heading of §5.400 is revised to read as set forth above.

b. Amend § 5.400 in paragraph (a) by removing the words “two copies of each item of political propaganda” and adding, in their place, the words “informational materials”, and by adding, before the period, the words “no later than 48 hours after the beginning of the transmittal of the informational materials”.

c. Amend § 5.400 in paragraph (b) by removing the words “two copies of an item of political propaganda” and adding, in their place, the words “informational materials” and by removing the word “material” and adding, in its place, the word “materials”.

d. Amend § 5.400 in the first sentence of paragraph (c) by removing the words “two copies of a motion picture containing political propaganda” and adding, in their place, the words “a copy of a motion picture”.

§ 5.401

[Removed]

16. Remove § 5.401.

§ 5.402

Labeling informational materials.

17. a. The section heading of § 5.402 is revised to read as set forth above.

b. Amend § 5.402 in paragraph (a) by removing the words “political propaganda” and adding, in their place, the words “informational materials”, by removing the words “it has” and adding, in their place, the words “they have”, and by removing the word “its” and adding in its place, the word “their”.

c. Amend § 5.402 in paragraph (b) by removing the words “An item of political propaganda which is” and adding, in their place, the words “Informational materials which are”, and by removing the word “is” from the phrase “which is in the form of prints” and adding, in its place, the word “are”, and by removing the word “item” from the phrase “such item” and adding, in its place, the word “materials”.

d. Amend § 5.402 in paragraph (c) by removing the words “An item of political propaganda which is” and adding, in their place, the words “Informational materials”, and by removing the word “is” from the phrase “which is not in the form of prints” and adding, in its place, the word “are”.

e. Amend § 5.402 in paragraph (d) by removing the words “Political propaganda as defined in section 1(j) of the Act which is” and adding, in their place, the words “Informational materials that are”, and by removing the word “is” before the word “caused” and adding, in its place, the word “are”.

f. Amend § 5.402 in paragraph (e) by removing the words “political propaganda as defined in section 1(j) of the Act” and adding, in their place, the words “informational materials”.

g. Amend § 5.402 in paragraph (f) by removing the words “political propaganda” and adding, in their place, the words “informational materials”.

§ 5.500

[Amended]

18. Amend § 5.500 in paragraph (a)(4) by removing the words “political propaganda has” and adding, in their place, the words “informational materials have”.

§ 5.600

[Amended]

19. Amend § 5.600 by adding the words “informational materials,” following the words “Registration statements,” and by removing the words “from 10 a.m. to 4 p.m.” and adding, in their place, the words “during the posted hours of operation.”

§ 5.601

[Amended]

20. a. Amend § 5.601 in paragraph (a) by adding the words “informational materials,” following the word “thereto,”.

b. Amend § 5.601 in paragraph (b) by adding the words “informational materials,” following the word “thereto,”.

Dated: May 28, 2003.

John Ashcroft,

Attorney General.