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The Foreign Influence Transparency Scheme Bill 2017
On 7 December 2017, the Government introduced the Foreign Influence Transparency Scheme Bill 2017 (the Bill). Its purpose is to introduce a scheme that will impose registration obligations for people or organisations who have arrangements with, or undertake certain activities on behalf of “foreign principals”.
It does not prohibit the involvement of foreign principals in Australia’s political and government processes, rather its intent is to provide transparency for the Australian Government and the public about the forms and sources of foreign interest in Australia.
Broadly speaking, the Bill introduces:
- registration requirements by persons undertaking certain activities on behalf of a foreign principal (some exemptions apply for certain activities and persons), and
- reporting requirements for those registered under the scheme to disclose information about the nature of the relationship with the foreign principal and the activities undertaken (with additional disclosure requirements during elections and other voting periods). Some of this information will be made publicly available.
The Bill prescribes significant penalties for breach of the provisions, including criminal offences, for those undertaking registrable activities who knowingly do not fulfil the registration requirements or recklessly do not renew their registration or fail to meet other requirements.
Charges (fees) will be imposed for registration and renewal of registrations (by way of the Foreign Influence Transparency Scheme (Charges Imposition Bill 2017, which has been introduced by the Government but not yet passed by Parliament).
If passed in its current form, this Bill is likely to have an impact on the work of many not-for-profit organisations that have a relationship (i.e. broad support or donation) with a foreign entity or person, particularly their advocacy work. Not-for-Profit Law is concerned with the broad scope of the Bill (see below).
The Bill has been referred to the Parliamentary Joint Committee on Intelligence and Security for inquiry and report on 23 March 2018. Submissions are being accepted until 15 February 2018. Submissions already provided to the Committee can be accessed here. Note the latest advice is that "The Committee intends to present its report in April 2018."
What are some of Not-for-profit Law’s key concerns?
Not-for-profit Law (and many others) is concerned about the broad scope of the Bill - the very wide definitions of “on behalf of”, “lobby” “general political lobbying”, “purpose of political or government influence’"coupled with the limited and narrow exemptions) means many not-for-profit organisations that receive support from an entity or person outside of Australia (who are not Australian citizens or permanent residents) and who engage (directly or indirectly) with public officials or parliamentarians will be captured by the Bill.
For those not-for-profit organisations and social enterprises that would be covered, we are concerned about the significant administrative burden (registration and disclosure) that will be placed on them, and the severity of enforcement provisions. This Bill may have a negative impact on the ability of these organisations to undertake and fund their work including important advocacy work (for registered charities this is work allowed by law and acknowledged to be of public benefit), and as such provide important, and necessary contributions to public debate and public policy development.
If we are caught by the Bill how could it impact my not-for-profit or social enterprise?
As outlined above (and in more detail below), the Bill brings with it the requirement to register (if caught by its operation) and to provide certain information, with increased requirements (pending the activities and the foreign principal) during an election or other voting periods (for example, a vote like that undertaken by the Australian Bureau of Statistics in relation to marriage equality). There are also requirements in relation to ongoing disclosure of certain information. Registration must be maintained (where the organisation is caught by the Bill) and there are specific record keeping requirements. Organisations will be charged a fee for registration and renewal. Non-compliance could result in imprisonment.
How does the Bill work – registration under the scheme
The Bill introduces a registration system. It makes a person liable to register if they undertake an activity on behalf of a foreign principal that is registrable in relation to the foreign principal (see below), or the person enters into a registrable arrangement.
- Person includes an individual, body corporate, an association (whether incorporated or not) and other forms of bodies, and regardless of whether the person or body is resident in, formed or created in, or carrying on a business in, or constituted under an Australian law or a foreign law or not constituted at all (so this would cover not-for-profits and social enterprises whether incorporated or not, and including trusts, incorporated associations, companies limited by guarantee, co-operatives and unincorporated groups)
- On behalf of is given a very wide definition and includes under an arrangement (whether in writing or not), in the service of, or the order or request of, under the control of, with funding or supervision of, or in collaboration with the foreign principal.
- Foreign principal is a foreign government, foreign public enterprise, foreign political organisation, foreign business, or an individual who is neither an Australian citizen nor a permanent Australian resident.
The Bill provides that certain activities on behalf of the foreign principal including ‘activity for the purpose of political or governmental influence’, must register if that activity involves ‘parliamentary lobbying’ or ‘general political lobbying’ or ‘communications activity’ or ‘donor activity’ and a foreign principal.
The following definitions are relevant:
An activity for the purpose of political or government influence
A person undertakes an activity for the purpose of political or government influence if a purpose of the activity (whether or not there are other purposes) is to influence directly, or indirectly, any aspect (including the outcome) of a number of things including a process in relation to a federal government election or federal government decision or proceedings of a House of the Parliament (s12). This also includes where the purpose of the activity is to influence an aspect of a process or proceedings by influencing the public or a section of the public (in relation to the process or proceedings). Note that ‘federal government decision’ includes a decision of the Executive Council, Cabinet or committee of, Minister, a Commonwealth entity, Commonwealth entity or person performing their duties in relation to a process. Also note that a decision includes a decision on any matter including administrative, legislative and policy matters.
- Lobby means 'communicate in any way with a person or a group of persons for the purpose of infleuencing any process, decision or outcome and represent the interest of a person in any process'
- Parliamentary lobbying means lobbying a member of Parliament or their staff (a person employed under s13 or s20 of the Members of Parliament Staff Act 1984)
- General political lobbying means lobbying a Commonwealth public official; a Department, agency or authority of the Commonwealth; a registered political party; or a candidate in a federal election (and is lobbying that is not parliamentary lobbying)
- Communications activity means communicating or distributing information or material in any form including oral, visual, graphic, written, electronic, digital and pictorial (with some exceptions for certain broadcasters, telecommunications providers and periodical publishers).
- Donor activity means disbursing money or things of value where the person or recipient of the disbursement is not required to disclose that under certain provisions of the Commonwealth Electoral Act 1918 (see here for further information about proposed changes currently before the Parliament to the Electoral Act in relation to foreign donations).
Registration will be required if the activity undertaken for the purpose of government or political influence involves any kind of foreign principal, however, ‘donor activity’ excludes a foreign ‘individual’ (meaning that donations from a foreign individual may not require registration for the activity of the purpose of government or political influence, pending the need to disclose the donation under certain provisions of the Electoral Act – but an organisation still may need to register in relation to other activities, like communication).
Registration will be required for other activities (relating to recent Cabinet Ministers and recent Members of Parliament, recent Ministers and holders of senior Commonwealth positions), however these are less relevant to not-for-profit organisations.
Some exceptions may apply from the requirement to register. Those most relevant to not-for-profit organisations are:
- Humanitarian aid or assistance: a person is exempt in relation to an activity the person undertakes on behalf of a foreign principal if the activity is, or solely relates to the provision of humanitarian aid or humanitarian assistance. In the Explanatory Memorandum (EM) to the Bill it explains the intent of the of terms ‘humanitarian aid or humanitarian assistance’ include man-made and natural disasters and crises and during times of conflict or civil unrest and whether to save lives, alleviate suffering and maintain human dignity. The example given involves a foreign country funding an Australian non-government organisation (NGO) to produce materials encouraging the Australian government to give more money to a particular overseas humanitarian crisis. The development and communication of materials for the purpose of political or government influence would be registrable activity (meaning the NGO would be required to register), except for this exemption (the materials are developed and communicated solely in relation to humanitarian aid or assistance). Note that concern has been raised in relation to the ambiguity of, and narrowness of this provision in hearings to the Inquiry.
- Religion: a person is exempt in relation to an activity the person undertakes on behalf of a foreign principal if the foreign principal is a foreign government and the activity is solely, or solely for the purposes of acting in good faith in accordance with the doctrines, tenets, beliefs or teachings of a particular religion of the foreign government (this does not apply in relation to Cabinet Ministers or recent Ministers). This is explained (in the EM) to avoid the activities of churches, affiliated with foreign governments, such as the Catholic Church from being registrable under the scheme. The example in the EM is where a Catholic priest speaks to his congregation about a pending vote in the Australian Parliament about voluntary euthanasia, in good faith and in accordance with the beliefs and teachings of the Catholic Church, consistent with the teachings of the Vatican City. He asks the congregation to contact their local member of Parliament to seek to influence that MPs vote. This would be registrable activity (meaning the priest would be required to register), except for the exemption. Note that concern has been raised by Catholic organisations in hearings to the Inquiry in relation to the operation of this provision and the example given.
Other exemptions included in the Bill relate to news media, diplomatic, consular or similar activities, legal advice or representation, commercial or business pursuits and other circumstances that may be prescribed.
Registration and other requirements under the scheme
If required to register, then registration must take place within 14 days. A registered person (entity) has the following obligations:
- report certain changes affecting the registration, for example, undertaking a new kind of registrable activity
- review information and report of registrable activities undertaken during an election campaign
- disclose communications activity (which could, pending prescription, include instances of communications activity such as when and how disclosures are made, their content and form and manner of disclosures)
- renew registration annually (where remaining liable to be registered), and
- keep records (of registrable activities, any benefits provided to foreign principal, information forming part of communication activity, any arrangements with foreign principal or other material or information distributed on behalf of the foreign principal) for five years from when registration ends.
Some of the information provided under the scheme will be made publicly available (names of registrants and the foreign principals, and description of the activities being undertaken) with some exceptions. The handling of information is subject to the Privacy Act 1988 and the Criminal Code. Powers have been given to the Secretary of the Commonwealth Department that will administer the scheme, to require information from ‘any person’ in relation to the scheme in certain circumstances.
Enforcement of the scheme
Criminal offences apply to a person who is liable to register and knowingly does not register (or maintain the registration), for providing false or misleading information in relation to their responsibilities under the scheme, for destroying documents or not complying with notices (from the Secretary) in relation to the scheme. These offences range from 12 months to 7 years imprisonment. Penalties (60 units, $12 600) apply for a failure to fulfil obligations under the scheme.