Publication
FARA’s Pendulum: Shifts in Foreign Agent Regulation
On her first day in office, Attorney General Pamela Bondi issued a memorandum signaling a significant shift in the Department of Justice’s (DOJ) approach to Foreign Agents Registration Act (FARA) enforcement. The memorandum directs prosecutors to pursue criminal FARA charges only in cases involving conduct “similar to more traditional espionage by foreign government actors.” This marks a stark departure from the prior administration’s aggressive enforcement approach, which included multiple high-profile criminal prosecutions and significant proposed regulatory changes.
1. FARA’s Enforcement Evolution
Historically, FARA was an obscure statute, and the DOJ’s FARA Unit used a “voluntary compliance” approach when it came to potential unregistered foreign agents. Criminal charges were rare and typically reserved for cases involving espionage, egregious conduct, or national security threats.
This changed during the first Trump administration, particularly in Special Counsel Robert Mueller’s investigation, which launched sprawling FARA investigations and brought criminal FARA charges against high profile allies of the president. The Biden administration continued this aggressive approach, launching criminal investigations of, and bringing criminal charges against, individuals and entities that likely would have been merely the subject of administrative inquiries under the voluntary compliance approach. Many of these cases and investigations resulted in acquittals or criminal declinations — but only after subjecting the DOJ’s targets to years of scrutiny.
Additionally, DOJ filed the first affirmative civil suit under FARA in over 30 years against casino magnate Steve Wynn. The Wynn case, however, underscored the limits of FARA enforcement. In 2022, DOJ sought an injunction requiring Wynn to retroactively register as a foreign agent for his alleged lobbying efforts on behalf of the Chinese government in 2017. The district court dismissed the case because the alleged agency relationship ended before the DOJ filed suit and the FARA statute did not provide DOJ with the authority to compel retroactive registration. The U.S. Court of Appeals for the D.C. Circuit Court upheld the dismissal, which left DOJ with criminal investigations and prosecutions as the only options to go after individuals or entities for failing to register under FARA for past conduct.
Now, the Bondi memorandum signals yet another shift — this time, reversing course and curtailing aggressive criminal FARA enforcement efforts.
2. Key Changes in DOJ Policy
The new policy largely restores the DOJ’s pre-2017 stance on FARA enforcement. Although the memorandum outlines immediate changes, full implementation — particularly for ongoing investigations — will take time. The key policy shifts include:
- Disbanding the Foreign Influence Task Force – This structural change will reduce DOJ’s dedicated resources for FARA investigations.
- Limiting Prosecutorial Discretion – Criminal FARA charges and charges brought under 18 U.S.C. § 951, commonly referred to as the “espionage lite” statute, will be pursued only in cases where there is conduct “similar to more traditional espionage.” The memorandum does not elaborate on what constitutes “more traditional espionage,” but it seems that would not include domestic influence campaigns that indirectly benefit foreign interests.
- Refocusing on Civil & Regulatory Efforts – The FARA Unit will shift its emphasis toward civil enforcement, regulatory guidance, and compliance initiatives rather than criminal prosecutions.
3. What to Expect: Regulatory Shifts
While criminal FARA cases are expected to decline, civil and administrative inquiries will continue — particularly against individuals and entities perceived to be acting on behalf of hostile foreign governments.
- Targeted Enforcement – Continued scrutiny is expected for individuals and entities associated with countries such as Iran, Palestine, Yemen, and China, as part of the Trump administration’s broader “decoupling” policy. The Biden administration dedicated significant resources to investigations relating to Russia, Qatar, and the UAE; it is reasonable to assume there will be less focus on those countries.
- Less Focus on Commercial Activities – Businesses and individuals engaged in commercial activities that are not considered traditional lobbying (directly influencing government officials) or public relations work (directly influencing the public) may experience reduced scrutiny, especially if their activities do not directly support foreign government interests.
Additionally, pending regulatory changes proposed in the final days of the previous administration will be reevaluated or indefinitely postponed. These proposed rules would have:
- Narrowed the commercial exemption. Although the proposed new commercial exemption has several new evaluation prongs to determine whether one’s activities are covered by the exemption, the proposal effectively narrows the commercial exemption to exempt only commercial activities that predominantly serve a U.S. domestic interest. Surprisingly, the proposed rules would treat activities promoting tourism in a foreign country as “private and nonpolitical” — contradicting decades of advisory opinions and guidance that treated such activities as political and requiring registration.
- Increased disclosure requirements such as mandating more prominent disclosure of foreign agent status on websites, social media, and in communications with U.S. officials.
Given the Bondi memorandum’s emphasis on increased FARA “public guidance” and the Trump administration’s approach to prior administrations’ policies and actions, do not be surprised to see the FARA Unit rescind or denounce many of the advisory opinions posted on the FARA Unit’s website in recent years.
4. Compliance and Oversight Risks Remain
Despite this shift, businesses and individuals engaged in activities that could trigger FARA registration obligations should not assume that enforcement is disappearing entirely.
- Reputational & Compliance Risks – Even in the absence of aggressive DOJ action, a perceived failure to comply with FARA can still lead to Congressional oversight and investigations, media scrutiny, and reputational damage.
- Potential Legislative Action – There have been numerous bipartisan legislative proposals, including bills sponsored by Senate Judiciary Committee Chairman Chuck Grassley, to amend FARA to strengthen DOJ’s enforcement tools, including the elimination of the “Wynn loophole” that curtails DOJ’s ability to compel retroactive FARA registration.
- Continued Lobbying Restrictions – Even with FARA enforcement potentially declining, significant lobbying restrictions and reporting requirements remain. This is especially the case with federal government contracting, where statutory and federal acquisition regulations have (1) prohibitions on monies to be used for lobbying efforts, (2) anti-contingency provisions, and (3) anti-kickback provisions. In addition, individual states have similar requirements and separate reporting structures, and some states have introduced “Mini FARA” bills governing lobbying at the state level on behalf of foreign principals.
- Statute of Limitations Considerations Linger – FARA violations are subject to a five-year statute of limitation, meaning potential noncompliance could remain actionable well into the next administration. Given the shifting nature of enforcement priorities, failing to address compliance risks now may result in heightened scrutiny and potential enforcement under a subsequent administration.
For companies involved in international lobbying, consulting, or political advocacy, the best approach remains proactive compliance. An effective compliance program includes policies and procedures governing such activities, updated contracts for lobbyists or other third-party consultants, training, and audit reviews. Engaging experienced FARA counsel is crucial to assessing risks and ensuring activities align with evolving enforcement priorities.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 16 locations throughout the United States and in Mexico, including Los Angeles, Orange County and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
