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Last year, the UK government tabled an amendment to the National Security Bill that was then proceeding through Parliament: the Foreign Influence Registration Scheme (“FIRS”). FIRS, as initially drafted, was widely criticised. Broad concepts, alongside an unhelpful lack of definitions in the draft text, risked a range of bizarre outcomes and, perhaps unintentionally, the imposition of a bureaucratic nuisance on a range of businesses, educational institutions and charitable organisations alike. The government subsequently accepted revisions proposed by the House of Lords to mitigate these concerns and an amended version of the scheme was included in the National Security Act 2023 (the “Act”), which received Royal Assent on 11 July 2023.
FIRS, together with a new offence of foreign interference also introduced in the Act (see Factsheet here), is aimed at protecting the UK’s political and state systems from foreign pressure which goes beyond what is considered acceptable foreign influence in UK state affairs
The purpose of FIRS, according to the government’s Factsheet, is to “[strengthen] the resilience of the UK political system against covert foreign influence” and “[provide] greater assurance around the activities of certain foreign powers or entities that are a national security risk”. It requires the registration of relevant agreements which have as their objective the influencing of certain specified political matters or persons in the UK. FIRS is a two-tier scheme, comprising the “political influence” tier and the “enhanced” tier.
Political influence tier: “foreign influence arrangements”
The “political influence” tier requires the registration (via an online portal) of arrangements to carry out political influence activities in the UK at the direction of a foreign power, where the activity is being carried out for the purpose of influencing UK public life (“foreign influence arrangements”). Failure to register the arrangement within 28 days of its being made will be an offence. Registerable political influence activities include not just lobbying activities but “communications” to a lengthy list of public officials (including central and local government officials, MPs and election candidates, military personnel and police, amongst others). The intention must be to influence an election or referendum in the UK, decisions of UK government ministers or those of devolved administrations, proceedings of a UK registered political party, or any member of Parliament in Westminster or the devolved administrations. Certain communications to the public will also be registerable where it is not reasonably clear that the communication is made by or at the direction of the foreign power, as well as the disbursement of money, goods or services to UK persons for a political purpose.
Enhanced tier: “foreign activity arrangements”
The “enhanced” tier enables the Home Secretary to require the registration of a broader range of activities for specified countries, parts of countries or foreign government-controlled entities, where greater transparency is considered reasonably necessary to protect the UK’s safety or interests. This tier will require the registration of (i) arrangements to carry out any activities in the UK at the direction of a specified power or entity, and (ii) activities carried out in the UK by specified foreign power-controlled entities (“foreign activity arrangements”). Unlike arrangements falling within the political influence tier, arrangements under the enhanced tier must be registered within 10 days of being made.
The key element here is that the activity must have been carried out pursuant to a “direction” by the specified foreign power or entity. In this context, “direction” will have its ordinary meaning as being an “order or instruction to act”. A “request” by a foreign power may also be captured within the definition of “direction”, but only where there is a power relationship between the person and the foreign power which adds an element of control or expectation (e.g. through a contract, payment, coercion, etc). This will be particularly relevant to organisations that are state-owned entities but which operate at arms’ length from state authority. The UK government will be issuing guidance on what constitutes “direction” to support compliance before these provisions come into force.
Certain entities will be exempt from registering under FIRS. Exemptions to both tiers include:
Academic collaboration and charitable campaigning will only require registration if they involve political influence activities or the activities are directed by a specified country or state-controlled entity. There is also no requirement to register information that is subject to legal professional privilege.
Failure to register an arrangement where the person involved knows it is an arrangement under the political influence tier or knows or ought reasonably to have known it falls under the enhanced tier, is an offence. Carrying out unregistered activities which should have been registered will also be an offence (subject to certain conditions). Penalties include imprisonment for up to two years (in the case of foreign influence arrangements), to up to five years (in the case of foreign activity arrangements), and unlimited fines.
FIRS is not intended to prevent open and transparent engagement with and on behalf of foreign governments. However, some organisations may now find their activities are within scope of FIRS and will need to be appropriately registered. Entities that are considered under the legislation to be “foreign powers” or directed by foreign governments will need to ensure their activities are registered, if relevant. These could include foreign state-owned undertakings or branches of a foreign government, for example. Entities acting under contracts or other agreements with foreign governments, pursuant to which they engage with UK policy decision-makers on that foreign state’s behalf, will also be caught. These could include large companies or investors.
FIRS is unlikely to come into force before Spring 2024 since the government has undertaken not to implement it until it has published detailed guidance, which it will first consult on. In the meantime, businesses that are likely to be captured by FIRS would be well-advised to begin thinking about how their organisation will comply with the regulations and ensure they are alert to the possibility they will have to register their arrangements in future.
17 August 2023
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