The danger of good intentions on tracking “foreign agents”

For civil society and transparency advocates in the United States (US) it may come as a surprise that the European Union (EU) wants to copy its outdated 85-year-old law on “foreign agents”.

There are very few laws covering foreign agents across the world. The US Foreign Agents Registration Act (FARA) is a flawed model, but one which has proved hard to amend because of Congressional deadlock.

The EU will call it a Foreign Agents Act but officials say it will be based on the FARA, which was originally adopted in 1938 and designed to limit the influence of foreign governments and foreign propaganda in the US. FARA requires lobbying firms and non-governmental organizations (NGOs) to report their funding and work with “foreign agents”.

The European Commission’s justice department is close to completing an impact assessment. EU officials say that the draft law, which is likely to be formally tabled this month, has been designed to “protect our democracies by imposing transparency obligations on funds or links to third countries on entities seeking to impact public opinion and the democratic sphere.”

“Looking at the actions by the Kremlin and other third country actors, we should not be naïve. It is high time to bring covert foreign influence and shady funding to light,” a Commission official adds.

Although some in Brussels speculate the initiative is part of the response to the Qatargate corruption scandal – where a handful of Members of Parliament were reported to have taken bribes from Morocco and Qatar in exchange for political support - that broke in December 2022. As, for example, Commission President Ursula von der Leyen promised to address Russian and Chinese influence in the EU political space in her State of the Union speech in September 2022.

Commission Vice President Vera Jourová, who is leading the work, has said that the bill will seek to tackle malign foreign influence and interference in European politics and civil society.

There is no reason to doubt that the rationale behind the planned law is sincere, but a copy and paste of FARA would be a mistake.

Advocates in the US have argued for years that FARA’s broad definition of “foreign principal”, which covers not just foreign governments, but foreign individuals, foundations, nonprofits, companies, or other entities, has had the unintended consequence of hitting NGOs particularly hard.

Under the Act, one can become an “agent” of a foreign principal not just by acting under a foreign principal’s “direction or control,” but simply at their “request.” That extends the scope of the law to foreign funded civil society groups promoting democratic freedoms or human rights.

Despite its shortcomings, recent attempts to reform FARA have failed. The Retroactive Foreign Agents Registration Act, a new, bipartisan bill was introduced in July in the House of Representatives and the Senate. It would amend the FARA to clarify that the agent of a foreign principal remains obligated to register for their activity, even after the agency relationship ends. The bill follows increasing FARA enforcement activity and would be the first amendment to FARA to pass in 25 years.

The experience of other national FARA bills in Hungary, Russia, and Georgia, for example, has been of autocratic governments using them to target civil society in the name of transparency. The lesson is that transparency rules can be abused if they are not tightly framed.

In Hungary, rules on foreign funding of NGOs and civil society have been used by Viktor Orban’s Fidesz government to crack down on NGOs that promote democratic and academic freedom, and groups promoting LGBTQI+ rights.

The value of FARA lies in the datasets that are made publicly available to the US State Department, that disclose the contracts, including the scope of the work and fees being paid by foreign politicians, governments, and companies. There is no need to copy its flaws.