Lobbyist, lawyer, PR, spy? - The Foreign Influence Registration Scheme – The UK's National Security Act 2023

Last year, the UK’s National Security Act 2023 (the “NSA”) introduced the Foreign Influence Registration Scheme (the “FIRS”). The FIRS compels  both individuals and entities to register certain arrangements carried out in the United Kingdom at the direction of a “foreign power”. Comparable to the U.S. Foreign Agents Registration Act, the FIRS is expected to come into force this year. Our previous briefing in November 2022, which describes this element of the National Security Bill, is available here.

The FIRS is yet to enter force. Recently, the Government issued draft guidance on the FIRS requirements. Finalised guidance is expected later this year, before the FIRS is implemented.

The purpose of the FIRS is to strengthen the resilience of the UK political system against covert foreign influence and provide greater assurance around the activities of foreign powers (and their associated entities). The law does not prevent such activities from taking place, but the FIRS seeks to ensure transparency about who makes these arrangements and what they seek to achieve.   Information published through the FIRS will be available on an online register.

The two tiers

The FIRS consists of the “Political Influence Tier” and the “Enhanced Tier”.

• The Political Influence Tier aims to “increase transparency of foreign power influence in UK political affairs.” This tier requires registration of arrangements to carry out political influence activities in the UK at the direction of a foreign power (excluding the Republic of Ireland). The policy justification for this tier is to provide “a clear picture of foreign power-directed political influence to the UK Government and public”.

• The Enhanced Tier aims to “provide greater assurance around the activities linked to specified foreign powers or entities which may pose a risk to UK safety and interests”. Given its emphasis on the UK’s “safety and interests”, this tier is more focussed on the influence of adversarial foreign powers. Whilst the Government is yet to specify those actors, we suggest that it is safe to assume that the eventual list will include Russia and Iran, amongst others.  

It is important to note that in both cases, the Government emphasises that registration does not necessarily mean an arrangement is “illegitimate” or “undesirable”.

Trigger for registration

The draft guidance outlines the circumstances in which registration to either the Political Influence Tier or the Enhanced Tier is required. In particular, for each tier there are four conditions which trigger registration:

• Condition 1: You make an arrangement (whether formal or informal) with a “foreign power”[i] (Political Influence Tier) or a specified foreign power or entity (Enhanced Tier);

• Condition 2: The arrangement involves a “direction”[ii] from the “foreign power” (Political Influence Tier) or a specified foreign power or entity (Enhanced Tier);

• Condition 3: The direction is to carry out “political influence activities”[iii] (Political Influence Tier) or “relevant activities”[iv] (Enhanced Tier), in the UK (whether by yourself, or with or through someone else); and

• Condition 4: No exemptions apply to the arrangement or activities.

Exemptions to FIRS registration

There are a number of exemptions from the requirement to register under the Political Influence Tier and the Enhanced Tier. The following are not required to register under the FIRS:

• Anyone acting as part of an arrangement to which the UK is a party (Political Influence Tier and Enhanced Tier);

• Individuals acting for a foreign power in their official capacity as employees (Political Influence Tier and Enhanced Tier);

• Family members of diplomatic and consular staff (including unmarried persons), where they are supporting diplomatic or consular activities (Political Influence Tier and Enhanced Tier);

• Lawyers, in their provision of legal services to foreign powers (Political Influence Tier and Enhanced Tier);

• Domestic and international news publishers (Political Influence Tier only);

• Those providing services which are reasonably necessary to the functioning of a diplomatic mission or consular post (Enhanced Tier only).

The FIRS is distinct from existing registration and approval obligations on companies, investors and postgraduate students under the National Security and Investment Act 2021 or the Academic Technology Approval Scheme. As the draft guidance emphasises, where registration or approval is required under more than one of these three routes, they must be obtained separately. This is significant to note for deal timeframes and planning. 

Definitions and examples

The draft guidance provides several examples of where registration is and is not required under both tiers and when exemptions can apply. Whilst these worked examples do not apply to a particular sector, it is envisioned that sector-specific instructions will accompany the finalised guidance. This will be crucial to ensure individuals and entities are given an appropriate opportunity to comply with the FIRS.

As some key terms are not fully defined (such as “direction”), it is important to interpret the FIRS alongside the guidance, and other available documents, to fully understand its scope and ensure compliance.

Information required at registration

Although the information required at registration will depend on the exact circumstances of the individual or entity, the draft guidance outlines the information required in all cases. Most notably, this includes the name of the foreign power directing the activity, a description of the activities to be undertaken (including their nature, purpose and outcome sought) and details of the individuals who will carry out the activities.

Ultimately, those required to register need to provide enough detail to enable the authorities to have a clear picture of the political influence activities that they have been directed to carry out or arrange (including the means through which they will do this). Vague statements will not suffice.

Public information

For those concerned about confidentiality, the draft guidance provides an extensive list of what will be published. For example, in relation to communication activities, information on the nature, purpose and outcome sought as a result of the communication will be published.

Naturally, this will raise concerns amongst some, if not many, registrants. However, the draft guidance also provides for exemptions from publication. This includes:

• Where publication would involve the disclosure of commercially sensitive information;

• There is a significant risk that publication would put any individual’s safety at risk; and/or

• There is a risk that publication would prejudice UK national security.

To qualify for any one or more of those exemptions, applicants must provide supporting evidence to support any such request.

Offences and penalties

Offences relating to the Foreign Influence Tier (which include carrying out unregistered activities, providing false or misleading information and failing to comply with an information notice) carry penalties of up to two years imprisonment and/or a fine.

The Enhanced Tier offences (which similarly include carrying out unregistered activities, providing false or misleading information and failing to comply with an information notice) carry penalties of up to five years imprisonment and/or a fine.

Next Steps

It seems that the current General Election period has delayed introduction of the FIRS.  Nevertheless, as both the Conservative and Labour parties have demonstrated their support for the FIRS (and the policy aims of the NSA as a whole), we expect that FIRS will reach implementation relatively soon after the next government is formed.     

In terms of cost, we expect there to be both initial and ongoing costs for those required to comply. For example, these will likely include:

• ‘Familiarisation costs’ – such as training staff on the FIRS and processes around the use of confidential material; and

• ‘Operational costs’ – such as record keeping to demonstrate compliance and ongoing monitoring for material changes which may bring an arrangement into the scope of the FIRS.

For some individuals and entities, particularly those in unregulated sectors whose record keeping and processes may be less refined, the initial costs may be substantial.

Given the broad scope of the FIRS, and – we suggest – the high probability of enforcement appetite, individuals and businesses in the UK with any relationship to a “foreign power” (as defined) should start mapping their risks and planning to comply.  Please contact us to discuss any queries regarding the issues described in this note.

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[i] A “foreign power” is defined as (i) the sovereign or head of a foreign State in their public capacity (ii) a foreign government (or part of) (iii) an agency or authority of a foreign government (or part of) (iv) an authority responsible for administering the affairs of an area within a foreign country or territory (or person exercising those functions) and (v) a governing political party of a foreign government.

[ii] “Direction” is not defined in the National Security Act 2023 but is considered to be an order or instruction to act. It implies a degree of control or expectation by the foreign power.

[iii] A “political influence activity” is defined as making a communication to (i) a Minister of the Crown (ii) Member of the House of Parliament (iii) an officer, trustee or agent of a UK registered political party (iv) a candidate at election (v) a senior official or special adviser or (vi) a person exercising functions on behalf of the Crown (and their Scottish or Welsh equivalents); making a public communication that is not reasonably clearly made at the direction of a foreign principal; or distributing money, goods or services to UK persons, where the purpose of that activity is to influence the conduct of an election or referendum, a government decision, the proceedings of the House of Parliament (and their Scottish or Welsh equivalents), the proceedings of a UK registered political party or a Member of House of parliament (or their Scottish or Welsh equivalents).

[iv] The default is that “relevant activities” include all activities in the UK. This includes, but is not limited to, commercial activities, research activities and the provision of goods and services.

This article was co-authored by Anupreet Amole and Alex Spurgeon.