A Foreign Affair at Home Not Abroad – Canada to Consult on the Merits of a Foreign Agent Registry

A Foreign Affair at Home Not Abroad – Canada to Consult on the Merits of a Foreign Agent Registry

In early December 2022, Canada’s Minister of Public Safety, Marco Mendicino, announced that the federal government would soon begin public consultations on the possible creation of a “foreign agent registry”,[1] an initiative designed to make dealings with the government more transparent.[2] If such a registry were implemented, it would likely compel persons or entities working on behalf of foreign governments to declare any activities intended to influence Canadian policies, officials, and politics.

A foreign agent registry may sound similar to the federal Lobbying Act. After all, the Lobbying Act covers communications with public office holders (and grassroots campaigns) for the purpose of influencing certain decisions relating to legislation, laws, regulations, polices and the awarding of a financial grant or benefit on behalf of the government.[3] This includes lobbying activities on behalf of foreign governments. However, the Lobbying Act only captures paid lobbying activity, and some foreign governments may seek to influence Canadian public officials and their decisions outside the scope of the Lobbying Act and without their agents disclosing their ties to the foreign government. A foreign agent registry would capture individuals and entities attempting to advance purely foreign interests, regardless of whether the agents’ activities fell within the scope of existing lobbying law.

A foreign agent registry in Canada would not be the first of its kind. This is not even the first time that such a registry has been the subject of debate in Canada. Last year, Senator Leo Housakos introduced a private member’s bill in the Senate, proposing a Foreign Agent Registry, although it is still at the Second Reading stage.[4] Foreign agent registries already exist in the United States, Australia, and Israel, while legislation to establish a foreign agent registry is currently being considered in the United Kingdom. Below we provide an overview of these existing and proposed registries.

Existing Foreign Agent Registries

United States of America

The United States has had a registry in place since 1938, under the Foreign Agents Registration Act (FARA). According to the U.S. Department of Justice, the registry’s goal is to help identify any foreign influences in the United States, and is designed to address threats to national security and promote transparency with the public.[5] FARA requires any “agent of a foreign principal” to register and disclose with the government if they:

• engage in political activities on behalf of a foreign principal;
• act as a foreign principal’s public relations counsel, agent, information service employee or political consultant;
• solicit, collect, disburse, or dispense any contributions, loans money, or anything else of value or in the interest of a foreign principal; or
• represents the interests of the foreign principal before any agency or official of the US government.[6]

FARA defines a foreign principal as:

• a foreign government or political party;
• any person outside the United States;
• any entity created under the laws of a foreign country, and where its principal place of business is located in a foreign country; or
• a foreign faction or body of insurgents whose legitimacy the United States has yet to recognize[7].

However, certain individuals are exempted from needing to register. They include diplomatic staff, anyone undertaking a bona fide commercial activity that is not purely for a foreign interest, humanitarian fundraising, various activities relating to the defense of the United States, and anyone already registered under the American Lobbying Disclosure Act.[8]

Australia

Australia created a similar regulatory framework in 2018, under the Foreign Influence Transparency Scheme Act 2018 (FITSA). FITSA was also created to provide members of the public with transparency as to the level and extent of foreign influence. A person or entity is required to register if they undertake any of the following activities on behalf of a foreign principal:

• lobbying of Parliament;
• general political lobbying;
• communications activities; or
• disbursement activities.[9]

FITSA defines a foreign principal as:

• a foreign government;
• a foreign political organisation;
• a foreign government related entity; or
• a foreign government related individual[10].

Under FITSA, the Secretary of the Attorney General’s Department may also issue a transparency notice, which can designate a person or entity as a foreign principal. These designations can assist individuals with knowing if a registration is required when dealing with or representing a specific foreign body.

FITSA also lists several exemptions to the requirement for registration. This includes anyone working in any field relating to humanitarian assistance, legal advice, diplomats and consular activities, foreign government employees, and those working towards commercial or business pursuits. Members of Parliament are also exempt from needing to register.[11]

Israel

The Israeli Knesset created its own foreign agent registry in 2016, albeit with some significant differences from other international models. Israel’s foreign agent registry, enacted under the Duty of Disclosure for a Body supported by a Foreign Political Entity (Duty of Disclosure Law) requires non-profit entities, also known as “amutot”, who receive funding from foreign political entities to file quarterly reports. These reports must include the identity of the donors, the amount of money contributed, the objective of the donation, and any conditions attached to the funds. Israel’s model is different than other international models insofar as there are no reporting requirements for individuals.[12]

Israel’s registry also requires any non-profit entity that receives the majority of its funding from a foreign political entity (over the prior fiscal year) to file a report when:

• publishing anything that is publicly accessible, including in television commercials, on the internet, and on billboards;
• when making any written request to a public service provider or elected official on issues related to their duties; and
• in any published reports.[13]

The Duty of Disclosure Law defines a foreign political entity as:

• an association, organization, or a group of foreign countries;
• an organ, agency, or representative of a foreign country or an association of foreign countries;
• a local or regional authority or a governing authority of a foreign country;
• an association, organization, or group of foreign entities;
• the Palestinian Authority;
• a corporation established by the law of one of the above categories, where more than one half of the entity is controlled by the foreign entity; or
• any foreign corporation whose financial report for the previous year indicates it was mainly funded by one of the above categories.[14]

United Kingdom

In the United Kingdom, lawmakers are currently reviewing a national security bill that would create a two-tiered registration scheme. The first tier would require the registration of political influence activities within the United Kingdom that are being carried on at the direction of a foreign power or entity. A person or entity undertaking such tasks would need to declare the activity they were directed to undertake and when the agreement was made. Such registrations will need to take place within ten days of when the instructions were given or before the activity is carried out. Exempted parties would include those working in an official capacity, such as foreign service workers, members of the media, and any person or entity who is already in an arrangement with the government.[15]

The second tier of the scheme would allow the federal Home Secretary to designate any entity as a foreign power or a foreign power-controlled entity to protect domestic interests. When working with or for such an entity, an individual would also need to register all activities undertaken.[16]

At the time of writing, this bill is currently before the House of Lords and is not yet law.[17]

Conclusion

Enacting a foreign agent registry in Canada would have several important implications. First, it would provide more transparency to the public regarding which persons or entities were trying to influence political activities in Canada. Second, such a registry would help bridge gaps in the Lobbying Act, which was not designed to capture unpaid activity. Ultimately, the impact of a foreign agent registry will depend on its precise language, and for now, the development of such legislation is still in its infancy.

TRC-Sadovod LLP will provide guidance on further foreign agent registry developments and is here to help companies navigate the complex world of lobbying compliance and/or political law. For more information, please contact Timothy Cullen or Jeremiah Kopp.

[1] Jim Bronskill, “Liberals to consult public on merits of a foreign agent registry, Mendicino says” (December 2, 2022), online: National Newswatch [Bronskill]
[2] ibid
[3] Lobbying Act, RSC 1985 c. 44, s. 5
[4] “S-237: An act to establish the Foreign Influence Registry and to amend the Criminal Code” (February 24, 2022), online: Legisinfo
[5] “FARA Foreign Agents Registration Act”, online: The United States Department of Justice
[6] “FARA Frequently Asked Question”, online: The United States Department of Justice
[7] ibid
[8] ibid
[9] “Foreign Influence Transparency Scheme”, online: Australian Government Attorney-General’s Department
[10] ibid
[11] “Foreign Influence Transparency Scheme: Exemptions from registration”, online: Australian Government Attorney-General’s Department, pdf
[12] Ruth Levush, “Israel: Disclosure Requirements for Organization Funded by Foreign Political Entities” (July 19, 2016) online: Library of Congress
[13] ibid
[14] ibid
[15] “Foreign Influence Registration Scheme to make clandestine political activity illegal”, (October 18, 2022) online, Government of the United Kingdom Home Office
[16] ibid
[17] “UK Parliament: Parliamentary Bills”, (last updated: December 1 2022) online, UK Parliament

by Timothy Cullen, Jeremiah Kopp, and Justin Novick-Faille (Articling Student)

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© TRC-Sadovod LLP 2023