The foreign influence transparency scheme: what's it all about?

BY LAURA GIARETTO, SENIOR LEGAL COUNSEL, LEGAL & RISK BRANCH, UNIVERSITY OF ADELAIDE

Foreign influence, when conducted in an open, lawful and transparent manner, contributes to our vibrant and robust democracy by ensuring that decision makers and the public are exposed to diverse opinions and voices from all sectors of society. However, when foreign actors seek to exert influence in a way that is hidden or not transparent, this can have serious implications for Australia.

In order to provide the public and government decision-makers with visibility of the nature, level and extent of foreign influence on Australia’s government and political processes, the Australian Government has enacted the Foreign Influence Transparency Scheme Act 2018 (Cth) (the Act). The Act commenced on 10 December 2018, and established the Foreign Influence Transparency Scheme (the Scheme).

WHAT DOES THE SCHEME DO?

The Scheme establishes registration obligations for individuals and entities that undertake certain activities on behalf of a “foreign principal”.

The types of activities that are registrable are:

• parliamentary lobbying – lobbying a member of Federal Parliament or their staff on behalf of a foreign principal;

• general political lobbying – covers lobbying activities on behalf of a foreign principal directed towards Commonwealth public officials, departments, agencies or authorities of the Commonwealth registered political parties, or candidates in federal elections;

• communications activity - covers all circumstances in which information or material are disseminated, published, disbursed, shared or made available to the public on behalf of a foreign principal and for the purpose of political or government influence; and

• disbursement activity - includes the distribution of money or things of value on behalf of a foreign principal.

WHO IS A FOREIGN PRINCIPAL?

The term “foreign principal” is defined to include:

• a foreign government - ranging from the government of a foreign country or a part of it (agencies, departments, etc) to a foreign local or regional government body. The definition seeks to capture all levels of government.

• a foreign political organisation - includes a foreign political party or a foreign organisation primarily concerned with pursuing political objectives.

• a foreign government-related individual (FGRI) – is an individual who is not an Australian citizen or Australian permanent resident and a foreign government, foreign government-related entity or foreign political organisation is able to exercise total or substantial control over the individual.

• a Foreign government-related entity (FGRE). An entity will be considered a FGRE if it is either:

> An entity that is not a company and either its executive members, for whatever reason, act in accordance with the directions, instructions or wishes of a foreign government or foreign political organisation; or the foreign government or political organisation is in a position to exercise total or substantial controlover the entity.

> An entity is not a body politic and its directors or employees are required to be members of a foreign political organisation and that requirement is contained in a law, constitution, rules or governing documents by which the entity operates.

WHEN IS AN ACTIVITY UNDERTAKEN ON BEHALF OF A FOREIGN PRINCIPAL?

A person or entity undertakes a registrable activity “on behalf of ” a foreign principal if:

• there is an arrangement with the foreign principal;

• it is conducted in the service of the foreign principal;

• it is conducted on the order or at the request of the foreign principal; or

• it is conducted under the direction of the foreign principal. Regardless of the nature of the relationship, both the foreign principal and the person (or entity) must have intended or expected that the person might or would undertake the registrable activities on behalf of the foreign principal.

WHAT IS THE PURPOSE OF THE FOREIGN PRINCIPAL’S ACTIVITY?

The term “for the purpose of ” refers to the reason behind undertaking the activity. The Scheme captures any activity where the sole, primary or a substantial reason for undertaking the activity is to influence a political or government process.

The concept of “influencing” a political or government process includes any attempt by a foreign principal to influence any persons, entities, structures or processes that are part of Australia’s federal political and governmental architecture, as well as any attempt to influence the Australian public’s opinion about Australian political and government processes.

The Scheme captures activities that are inherently political in nature, such as parliamentary lobbying, as well as more nebulous activities undertaken on behalf of a foreign principal where the purpose, though less obvious, is to influence an aspect of Australia’s democratic system (e.g. processes of government including the creation of laws and policies, the practices of Parliament and the conduct of federal elections).

TO REGISTER OR NOT TO REGISTER?

Simply put: Any person who undertakes registrable activities on behalf of a foreign principal in Australia is required to register under the scheme, unless they are exempt.

It is the responsibility of the person undertaking the activities to determine whether they are required to register. It

is an offence not to register if you are required to do so, and penalties apply.

EXEMPTIONS FROM REGISTRATION

The Scheme includes numerous exemptions which apply in very specific circumstances. If any of the exemptions apply, a potential registrant may not need to register even if they undertake activities on behalf of a foreign principal. Those seeking to rely on the exemptions should consider their circumstances carefully. Some examples of exemptions include:

• providing humanitarian aid or assistance;

• providing legal advice;

• providing legal representation in judicial, criminal or civil inquiries, investigations or proceedings;

• providing legal representation related to government administration processes involving the foreign principal;

• undertaking a registrable activity on behalf of a foreign principal while employed as an officer of a foreign government and the activity is undertaken in the name of the foreign government;

• undertaking a registrable activity on behalf of a foreign government-related entity, the activity is a commercial or business pursuit, the activities are undertaken by the individual are in their capacity as a director, officer or employee of the foreign governmentrelated entity, and it is clear that the person is undertaking the activity in their official capacity;

• where a registered charity undertakes certain registrable activities on behalf of a foreign principal in pursuit of the charity’s purpose; and

• where a person is undertaking a registrable activity on behalf of a foreign principal and the activity relates to the arts or to a person’s artistic purpose.

PENALTIES

The Scheme imposes a number of criminal penalties for non-compliance. Most of the obligations are owed by the registrant. The maximum penalties for offences under the Scheme range from six months to five years imprisonment, depending on the seriousness of the conduct.

Refer to part 5 of the Act for more information on enforcement and penalties.

THE TRANSPARENCY REGISTER

The Transparency Register (the Register) provides a list of all registered activities by:

• Registrant Name,

• Activity Type,

• Foreign Principal,

• Foreign Principal country, and

• Start & End dates. At the time of writing, there were 171 entries on the Register.

The Register can be accessed at: https://transparency.ag.gov.au/

MORE INFORMATION

The Attorney-General’s Department has developed a comprehensive suite of guidance documents designed to help people understand how the Scheme works, and help people determine whether they need to register. Those resources can be accessed at: https://www.ag.gov.au/ Integrity/foreign-influence-transparencyscheme/Pages/Resources.aspx

This article was first published in the October 2019 edition of The Bulletin, The Law Society of South Australia's monthly journal.