By Terrance S. Carter and LaVerne Woods

Anyone who acts on behalf of a “foreign principal” to influence policy or public opinion or engage in “political activities” in the United States may be required to register as an “agent of a foreign principal” under the U.S. Foreign Agents Registration Act (“FARA”). While this piece of legislation has existed for over 80 years (dating back to 1938), the U.S. Justice Department has reportedly been ramping up enforcement under FARA in recent years. This means that Canadian charities, NFPs, and activists involved in policy work in the United States should be aware of the act’s broad reaching language that could potentially be interpreted to apply to them or organizations funded by them.

When the term “foreign principal” is used in FARA, it is so broad that it could refer to not only foreign governments, but also to foreign individuals, companies, foundations, charities, NFPs,  or other entities. A person could be considered an “agent of a foreign principal” if they act at the request of or are financed in major part by a foreign principal. Of interest to Canadian charities is the language found at 22 U.S.C. § 611(c)(1) which says that an agent of a foreign principal could also include any person “under the direction or control, of a foreign principal or of a person any of whose activities are directly or indirectly supervised, directed, controlled … in whole or in major part by a foreign principal”. Since Canadian charities are required by the Income Tax Act (Canada) to conduct their own activities by directing and controlling third party intermediaries that receive funds from the charity, there may be grounds for the U.S. Justice Department to find that a Canadian charity’s intermediary operating in the U.S. (such as a 501(c)(3) organization) is acting as an agent of a foreign principal. In addition to the above definitions, “political activities” can include “any activity that the person engaging in believes will, or that the person intends to, in any way influence any agency of official of the Government of the United States or any section of the public within the United States”.

Because of these broad definitions, in a March 2020 advisory opinion, the Justice Department, found that FARA applied to a U.S. non-profit organization focused on environmental conservation that received a grant from a foreign government agency to serve as a general contractor for the implementation of a program focused on environmental issues. In that particular case, it was enough that the U.S. non-profit organization had met occasionally with officials of the U.S. government for FARA to apply. In a November 2019 advisory opinion, the Justice Department also found that FARA applied to a U.S. religious organization that helped prepare banners for foreign attendees of a March for Life rally, though there were also political activity considerations at play in this decision, such as the potential for meetings between foreign foundation members or foreign government officials and U.S. government officials. In light of these examples, and others not included in this article, charities, NFPs and activists in Canada working through third-party intermediaries in the U.S. should consider discussing with Canadian and U.S. legal counsel the possibility that the third party intermediary in the U.S. may need to register under FARA and to discuss the risks of failing to do so.

​Read the September 2022 Charity & NFP Law Update