FARA Overhaul: New Bill Closes Foreign Agent Loopholes, Gives DOJ Five Years of Expanded Investigative Power

The aptly titled Sovereign Wealth Fund Transparency Act is less about specific funds and more about dramatically upping the ante for anyone working for a foreign government or political party in the U.S. This bill takes three big swings at the Foreign Agents Registration Act (FARA): it closes a major loophole, gives the Attorney General (AG) powerful new investigative tools, and introduces steep civil fines for non-compliance. If you or your company deals with foreign entities, even commercially, the compliance risk just went way up.

The Commercial Loophole is Closing

Right now, FARA has exemptions for certain commercial activities. This bill, in Section 2, says those exemptions are off the table if the agent's work is actually promoting the public or political interests of a foreign government or political party. Think of it this way: if a foreign state-owned energy company hires a U.S. firm to promote a new pipeline project, and that promotion also involves lobbying U.S. officials or influencing public opinion to support the foreign government’s broader geopolitical goals, the U.S. firm can no longer hide behind the commercial exemption. This change forces more activities that blur the line between business and statecraft into the open, meaning more people and companies will have to register as foreign agents.

The DOJ Gets a New Subpoena Power

Section 3 grants the Attorney General a major new enforcement weapon: the authority to issue Civil Investigative Demands (CIDs). Previously, the DOJ had to go straight to court or rely on criminal grand jury subpoenas. A CID is essentially a pre-litigation subpoena that can compel people to hand over documents, answer written questions (interrogatories), or give oral testimony under oath. This power is significant because it lets the DOJ gather evidence before they file a formal civil or criminal case, streamlining investigations into potential FARA violations. To keep this new power in check, the bill includes a five-year sunset clause, meaning this authority expires unless Congress renews it. It also requires the AG to report annually on how many CIDs were issued and what the outcomes were, giving Congress a clear metric for accountability.

Filing Mistakes Will Cost You, Big Time

Section 4 introduces a new schedule of civil penalties that will make compliance officers lose sleep. The bill establishes fines regardless of intent. If you’re required to register under FARA and fail to file your initial statement completely or on time, you face a fine of up to $10,000 per violation. For smaller mistakes, like failing to file a required supplement, the fine is up to $1,000.

The biggest financial risk comes if you file a deficient registration and the government sends you a notice to fix it. If you knowingly fail to correct that deficiency within 60 days of the notice, the penalty can soar up to $200,000. For firms and individuals who handle FARA filings, this means even a seemingly minor oversight, if ignored, could lead to a catastrophic financial hit. Crucially, the bill explicitly states that the foreign principal cannot pay these fines for you, ensuring the penalty lands squarely on the agent.