Strengthening the Transparency and Integrity of Foreign Influence Activities in France

Annex B. The Foreign Influence Transparency Scheme (FITS) in Australia

Description

Australia's Foreign Influence Transparency Scheme Act was enacted in 2018 "to provide the public and government decision-makers with visibility of the nature, level and extent of foreign influence on Australia’s government and political processes". The scheme establishes a public register of registrable activities undertaken on behalf of a foreign principal, and which are intended to influence any persons, entities, structures or processes that are part of Australia's federal political and government architecture. The scheme is not intended to restrict, deter, criminalise or punish lawful activities. What it does is highlight lawful activities being pursued for the benefit of foreign interests.

The scheme uses the term "influence", which refers to of the act of trying to affect or have an impact on a process, decision or outcome. This includes direct and indirect influence and is not limited by the degree of effect the activities have. It is not only influence to create change that is relevant to the scheme. It also includes influence to maintain the status quo. As such, the scheme clearly differentiates “foreign influence” from “foreign interference”:

• Foreign influence is considered legitimate insofar as “governments and other actors from around the world commonly make efforts to influence important issues and policies in Australia in a way which benefits their interests”. When conducted in an open, lawful and transparent manner, the Australian Government considers that it “contributes to [Australia]’s vibrant and robust democracy by ensuring that decision makers and the public are exposed to diverse opinions and voices from all sectors of society. The diverse opinions of community members, academics, the media, the business sector, non-government organisations as well as others, are a positive contribution to healthy and robust public debate”.

• Foreign interference goes beyond the routine diplomatic influence that is commonly practised by governments. It includes covert, deceptive and coercive activities intended to affect an Australian political or governmental process that are directed, subsidised or undertaken by (or on behalf of) foreign actors to advance their interests or objectives (Australian Attorney-General's Department, 2019[1]).

The FITS particularly highlights the significant risks that foreign interference activities pose to Australia's open system of government and national sovereignty, as these activities could “limit or shape government independent judgments and can corrupt the integrity established systems”. Furthermore, foreign interference into Australia's political system could “erode public confidence in its political and governmental institutions and could also interfere with private sector decision-making”. Ultimately, this “can be to the detriment of national security and economic prosperity” because foreign interference activities allow the interests of a foreign principal in Australia to be promoted in a covert manner, to the detriment of national interests if it is not clear that the act is undertaken on behalf of a foreign principal.

For these reasons, foreign interference is a serious criminal offense under the Commonwealth’s Criminal Code, punishable by up to 20 years' imprisonment (Australian Attorney-General's Department, 2019[1]).

Scope and definitions

Actors covered

Persons undertaking registrable activities on behalf of a foreign principal for the purpose of political of government influence must register under the scheme.

Table A ‎B.1. Definitions of a “foreign principal” in Australia (FITS Section 10)

	Categories covered
Foreign government	The government of a foreign country or parts of government of a foreign country. An authority of the government of the government of a foreign country or parts of the government of a foreign country (departments, agencies or other public entities that act in the name of the foreign government). A foreign local government body or a foreign regional government body. This definition captures all levels of government (e.g. ministry, municipal council).
Foreign political organisation	A foreign political party A foreign organisation that exists primarily to pursue political objectives. An organisation is a foreign political organisation if its primary purpose is to pursue the political objectives associated with governing a foreign country, even if the foreign country does not have a system of registration for political parties.
Foreign government-related entity	A company that is related to a foreign government or foreign political organisation in one or more of the following ways: The foreign government or foreign political organisation holds more than 15% of the issued share capital of the company. The foreign government or foreign political organisation holds more than 15% of the voting power in the company. The foreign government or foreign political organisation is in a position to appoint at least 20% of the company's board of directors. The directors of the company (however described) are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of the foreign government or foreign political organisation. The foreign government or foreign political organisation is in a position to exercise total or substantial control over the company. An entity that is not a company and that is related to a foreign government or foreign political organisation in either of the following ways: The members of the executive committee (however described) of the entity are accustomed or under an any kind of obligation to act in accordance with the directions, instructions or wishes of the foreign government or foreign political organisation. The foreign government or foreign political organisation is in a position to exercise total or substantial control over the entity. An entity that is not a body politic and that is related to a foreign political organisation in both of the following ways: Its directors, officers or employees are required to be a member or part of a foreign political organisation, and The above requirement is contained in a law, constitution, rules or governing documents by which the entity operates. Where an entity receives funding from a foreign government or foreign political organisation, this is not a sufficient link for the purposes of the scheme. If funding is the only link between the entity and the foreign government or foreign political organisation, then the entity will not be a foreign government-related entity.
Foreign government-related individual	An individual is a foreign government-related individual if the individual is not an Australian citizen or Australian permanent resident, and a foreign government, foreign government-related entity or foreign political organisation is able to exercise total or substantial control over the individual. This might be because the individual is accustomed or under an obligation (formal or informal) to act in accordance with the directions, instructions or wishes of the foreign government, foreign government-related entity or foreign political organisation, or they are in a position to exercise such control for other reasons. A person is not a foreign government-related individual if the only reason they satisfy the definition is because the individual is under an obligation to obey the laws of a foreign government. This scenario represents a relationship between the individual and the foreign principal that is already transparent if the laws are public knowledge.

Source: Australian Attorney-General’s Department (2019[2]), Foreign Influence Transparency Scheme Factsheet 3: Foreign principals, https://www.ag.gov.au/sites/default/files/2020-03/foreign-principals.pdf.

The scheme applies where the person undertakes registrable activities (FITS sections 11 and 13A):

• Under an arrangement with the foreign principal. An arrangement between the person and the foreign principal could be formal or informal, written or verbal. It could be a contract, understanding or agreement of any kind. It does not need to have been made in Australia for it to be registrable. The foreign principal does not need to pay the person to undertake the activity, or provide any other advantage to the person.

• In the service of the foreign principal.

• On the order or at the request of the foreign principal, or

• Under the direction of the foreign principal.

Regardless of the nature of the relationship between the person and the foreign principal, both the person and the foreign principal must have intended or expected that the person might or would undertake the registrable activities on behalf of the foreign principal.

A connection between the actions of the person and the foreign principal must be established. It is not sufficient for a person to unilaterally decide that they will undertake an activity on behalf of a foreign principal. The foreign principal must be seeking or expecting the activity.

If a person undertakes an activity without the foreign principal’s knowledge or expectation, there is no obligation to register under the scheme. In this case, the person’s activities and the foreign principal’s interests are merely coincidental. Where the person and the foreign principal expect the person to undertake a registrable activity, even if the activity is in the interests of both the person and the foreign principal, the person must register unless an exemption applies (Australian Attorney-General's Department, 2019[3]).

Decisions and public officials covered

FITS is intended to cover a wide breadth of political or governmental decisions, including but not limited to:

• Political decisions.

• Legislative processes.

• Regulatory decisions.

• Procurement decisions, and

• grant-making decisions.

FITS covers four main categories of activities, which are described below. Among them are activities aimed at “political or governmental influence”, which is intended to have a broad definition. Activities are considered to be aimed at political or governmental influence if the sole or primary purpose, or a substantial purpose, of the activity is to influence the public, (FITS Section 12) one or more of the following:

• A process in relation to a federal election or a designated vote.

• A process in relation to a federal government decision. A ‘government decision’ includes any formal or informal, final or interim decisions of the Executive Council, the Cabinet (or a committee of Cabinet), a Minister, an Australian Government Department, agency or company (or their subsidiary) of the Australian Government (within the meaning of the Public Governance, Performance and Accountability Act 2013), or any person performing duties in relation to any of those other entities. Examples of these types of processes related to these decisions include grant, licensing or procurement processes, policy development processes or other decisions.

• Proceedings of a House of the Parliament.

• A process in relation to a registered political party.

• A process in relation to a member of Parliament who is not a member of a registered political party.

• A process in relation to a candidate in a federal election who is not endorsed by a registered political party.

Any attempt by a foreign principal to influence the opinion of the Australian public about these political and governmental processes is also covered by the scheme.

Types of activities covered

Whether the activity is registerable depends on a number of factors, namely the identity of the person undertaking the activity, the identity of the foreign principal, the nature of the relationship between the foreign principal and the person undertaking the activity, and the nature and purpose of the activity.

The regime covers activities of a political nature (e.g. lobbying members of Parliament) and activities undertaken for political or governmental influence (e.g. providing information or material to influence public voting during a federal election). The scheme also captures activities where the purpose of the activity is not always clear. This includes activities undertaken on behalf of a foreign principal to influence any aspect of Australia’s democratic system (e.g. processes of government including the creation of laws and policies, the practices of Parliament and the conduct of federal elections).

Table A ‎B.2. “Registrable” activities within the meaning of FITS

	Type of activities	Description	Examples
Lobbying for political or governmental influence Lobbying includes communicating with the intent to influence processes, decisions or outcomes and representing the interests of another person in any process.	Parliamentary lobbying (Sections 10, 20, 21)	Lobbying a Member of Federal Parliament or their staff. N.B: any parliamentary lobbying undertaken on behalf of a foreign government, for whatever purpose, is a registrable activity unless an exemption applies. Parliamentary lobbying undertaken on behalf other foreign principals for the purpose of political or governmental influence, is registrable.	(e.g. meeting with a parliamentarian to express a particular point of view on behalf of a foreign principal).
	General political lobbying (Sections 10, 21)	General political lobbying covers lobbying activities directed towards: Commonwealth public officials. Departments, agencies or authorities of the Commonwealth. Registered political parties. Candidates for federal elections.	(e.g. sending a letter to a ministry, in order to express a particular point of view on behalf of a foreign principal).
Communication activity, including for the purpose of political or governmental influence. Such activities can influence the views and opinions of people involved in political and governmental processes. (Sections 13, 21)		Communications activity covers all circumstances in which information or material are disseminated, published, disbursed, shared or made available to the public. Information and material can be in any form including interpersonal, visual, graphic, written, electronic, digital and pictorial forms	(e.g. the government of country Y asks an eminent Australian expert to write and publish an article protesting against a measure taken by the government).
Disbursement activity (Sections 10, 21, 35)		Disbursement activity includes the distribution of money or things of value on behalf of a foreign principal. This activity must be registered under the scheme if the person, or recipient of the disbursement, is not required to disclose the activity under Part XX of the Commonwealth Electoral Act 1918 and the activity is undertaken at purposes of political or governmental influence. The Commonwealth Electoral Act 1918 disclosure requirements relate to donations made to candidates for federal election and political parties during a relevant disclosure period.	(e.g., an individual acting on behalf of a foreign political organisation makes donations on behalf of that foreign organisation to a student organisation on a college campus in order to encourage students to vote for a specific party). This donation is not made public under electoral laws and must be registered.

Source: (Australian Attorney-General's Department, 2019[4])

Exceptions/exemptions

Exemptions from registration in the Australian FITS are specified in sections 5, 24, 25, 26, 27, 29, 30 of the Act. These are the following activities:

• Humanitarian aid or assistance: The exemption applies where a person is undertaking a registrable activity on behalf of a foreign principal and that activity primarily relates to the provision of humanitarian aid or humanitarian assistance.

• Legal advice or representation: This exemption applies where a person is undertaking a registrable activity on behalf of a foreign principal and the activity primarily relates to, or is incidental to, providing (i) legal advice; (ii) legal representation in judicial, criminal or civil inquiries, investigations or proceedings; or (iii) legal representation related to government administrative proceedings involving a foreign principal.

• Members of Parliament and statutory office holders: This exemption applies where a person is undertaking a registrable activity on behalf of a foreign principal and, while the activity is being undertaken the person holds a position or appointment as a member of the Australian parliament or a member of the state Parliament or territory Legislative Assembly, or an office bearer under a law of the Commonwealth, state or territory.

• Diplomatic, consular, and similar activities: This exemption applies where a person is undertaking a regitrable activity on behalf of a foreign government and the activity is within the scope of the person's function as a diplomatic or consular official.

• United Nation (UN) Officials: This exemption applies to UN personnel or individuals formally associated with the UN who are undertaking a registrable activity on behalf of a foreign principal.

• Religion: This exemption applies where a person is undertaking religious activity on behalf of a foreign principal and the activity is undertaken in good faith.

• Foreign government employees: This exemption applies where a person is undertaking a registrable activity on behalf of a foreign principal and does so while employed as an officer of a foreign government and the activity is undertaken in name of the foreign government.

• Commercial or business pursuits - directors and employees of a foreign government-related entity: this exemption applies where: (i) a person is undertaking a registrable activity on behalf of a foreign government-related entity, (ii) the activity is a commercial or business pursuit, (iii) the activities are undertaken by the individual are in the capacity as a director, officer or employee of the foreign government-related entity, and (iv) it is clear that the person is undertaking the activity in their official capacity.

• Commercial or business pursuits – operating under the name of a foreign government related entity: This exemption applies where: (i) a person undertakes an activity on behalf of a foreign government related entity, (ii) the activity is a commercial or business pursuit, and (iii) the person undertakes the activity in or under the same or a substantially similar name to the foreign government-related entity.

• Industry representative bodies: This exemption covers circumstances where a registrable activity is undertaken in the course of representing the collective interests of members (both foreign and domestic) of an industry representative body. The exemption does not apply to representative groups which are foreign entities or where the membership does not include Australian entities.

• Personal representations in government administrative processes: This exemption applies to individuals who make representations on behalf of a foreign principal in relation to a governmental administrative process that involves the foreign principal or matters affecting the personal welfare of the principal stranger.

• Registered charities: The exemption applies to registered charities that undertake certain registrable activities on behalf of a foreign principal in pursuit of the charity's purpose. This exemption only applies to parliamentary lobbying, general political lobbying and communications activities. The exemption does not apply to disbursement activities.

• Artistic purposes: This exemption applies where a person is undertaking a registrable activity on behalf of a foreign principal and the activity relates to the arts or to a person’s artistic purposes.

• Certain registered organisations: This exemption applies where an association of employees or an enterprise association that is registered under the Fair Work (Registered Organisations) Act 2009 undertakes registrable activity on behalf of a foreign principal.

• Activities of members of certain professions: This exemption applies where a tax agent, a customs broker or a liquidator or receiver undertakes a registrable activity on behalf of a foreign principal in the usual context of undertaking their profession.

• Employees and contractors engaged under the Members of Parliament (Staff) Act 1984 and Commonwealth public officials: This exemption will only apply if the person undertakes a registrable activity within the scope of the person’s ordinary or usual duties, and at the time the activity is undertaken, the identity of the foreign principal is made apparent or is disclosed to all persons with whom the person is dealing (Australian Attorney-General's Department, 2019[5]).

Disclosure regime

Initial registration

The full list of information which must be made public under FITS is in section 6 of the Rules. Upon initial registration, registrants are required to provide the following related information and supporting documents:

• Detailed information about registrable activities (including types of recordable activities, dates of activities, details about the purpose of the activity).

• Information describing the nature of the relationship with the foreign principal.

The specific information and documents that registrants are required to provide will depend on their particular circumstances, including the types of registrable activities they are undertaking and the nature of their relationship with the foreign principal. For example, for any disbursement activity, the exact amount must be mentioned as well as the beneficiary. For a communications activity, the registrant must state the format of the communications activity (for example, radio broadcast, article, speech, text message) as well as details about the audience or recipient of the communication.

However, the information that is made publicly available does not include information that the Secretary of the department is satisfied is commercially sensitive, is sensitive and relates to a confidential government consultation on proposed policy changes, or affects national security.

Frequency of disclosures

Registrants are required to report material changes in circumstances, including updating their information to ensure it is not misleading or inaccurate. When a registrant becomes aware that information provided is or will become inaccurate or misleading, they are required to correct that information within 14 days.

Specific obligations during voting periods

People and entities who need to register under the FITS scheme have specific obligations during voting periods (including election periods). The particular obligations that apply during voting periods include:

• Reviewing registration information and confirming it is correct or updating the information.

• Reporting any registrable activities undertaken on behalf of a foreign principal during the voting period within seven days if the activity relates to the relevant vote or election, or involves disbursement activity that reaches the ‘electoral donations threshold’ or a multiple of the threshold.

During a voting period, the Attorney General's Department is required to publish the above corrections, updates and reports within 48 hours of receipt.

Registry administration, compliance and enforcement

The registry is administered by a dedicated Unit within the Attorney -General's Department. This Unit is also in charge of the Australian Government Register of Lobbyists.

Violations and sanctions

The Foreign Influence Transparency Scheme Act 2018 contains offenses for non-compliance under the scheme. These include:

• Undertaking registrable activities while not being registered under the scheme. It is a criminal offence for a person to not register under the scheme when they should do so. The maximum penalties for these offenses range from six months to five years' imprisonment, depending on the seriousness of the conduct.

• Failure to fulfil responsibilities (e.g. reporting and disclosure obligations) under the scheme. It is a criminal offense for a person to not fulfil responsibilities under the scheme. The maximum penalties for these offenses range from a fine of 60 penalty units to six months' imprisonment, depending on the seriousness of the conduct.

• Failure to comply with an information gathering notice issued under section 45 or 46 of the Act.

• Providing false or misleading information or documents in response to an information gathering notice issued under section 45 or 46 of the FITS Act. It is an offence to give false or misleading information or documents to the Attorney-General’s Department in response to an information gathering notice. The maximum penalty for this offense is three years imprisonment.

• Destroying records in connection with the scheme. It is an offence to damage, destroy or conceal records that are required to be kept in relation to any registration under the scheme. It is also an offence to take any action to prevent a registrant from keeping proper records related to the scheme. The maximum penalty for this offense is two years imprisonment.

References

[1] Australian Attorney-General’s Department (2019), Foreign Influence Transparency Scheme Factsheet 2: What is the difference between ‘foreign influence’ and ’foreign interference’?, https://www.ag.gov.au/sites/default/files/2020-03/influence-versus-interference.pdf.

[2] Australian Attorney-General’s Department (2019), Foreign Influence Transparency Scheme Factsheet 3: Foreign principals, https://www.ag.gov.au/sites/default/files/2020-03/foreign-principals.pdf.

[3] Australian Attorney-General’s Department (2019), Foreign Influence Transparency Scheme Factsheet 4: Acting on behalf of a foreign principal and ‘registrable arrangements’, https://www.ag.gov.au/sites/default/files/2020-03/acting-on-behalf-of-foreign-principals.pdf.

[4] Australian Attorney-General’s Department (2019), Foreign Influence Transparency Scheme Factsheet 5: Registrable activities, https://www.ag.gov.au/sites/default/files/2020-03/registrable-activities.pdf.

[5] Australian Attorney-General’s Department (2019), Foreign Influence Transparency Scheme Factsheet 7: Exemptions from registration, https://www.ag.gov.au/sites/default/files/2020-03/registration-exemptions.pdf.