Strengthening the Transparency and Integrity of Foreign Influence Activities in France

Annex D. Proposed Directive of the European Parliament and of the Council establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries

Description

The proposal for a Directive of the European Parliament and of the Council establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries, announced in December 2023 as part of the European Defence Package. Democracy aims to establish harmonised transparency requirements through national registers for entities carrying out such interest activities on behalf of third countries, regardless of their legal status. It therefore aims to harmonise the laws of the Member States by ensuring a common level of transparency throughout the Union (European Commission, 2023[1]). The explanatory memorandum states that, insofar as interest representation activities are “normally provided for remuneration”, the Directive is based on Article 57 of the Treaty on the Functioning of the European Union, which defines the concept of “services normally provided for remuneration”, and on Article 114, which provides for the adoption of measures having as their object the establishment and functioning of the internal market.

The proposal was prepared on the basis of consultations with interested parties in 2022 and 2023, including Member State authorities, commercial entities, entities engaged in interest representation activities and civil society organisations. A public consultation was also organised in February-April 2023, and an impact assessment was carried out.

As with the systems in force in Australia, the United Kingdom and the United States, the proposal makes a clear distinction between influence from third countries, which is presented as being able to "contribute positively to public debate", and situations of interference, where influence is carried out covertly. In particular, the proposal seeks to avoid any stigmatisation or adverse consequences that may arise from transparency obligations. Similarly, it does not aim to prevent third countries from promoting their opinions but to ensure that this is done in a transparent and responsible manner. It does not require compulsory registration on the sole basis of foreign funded unrelated to interest representation activities carried out on behalf of third countries.

Scope and definitions

Actors covered

The proposed Directive means by “third countries” countries that are not members of the Union or the European Economic Area. It applies to actors who provide an interest representation service to an entity from a third country, the definition of which is specified in Table A ‎D.1 below. The Directive notably avoids the use of the qualification "foreign agent", in order to avoid any “assimilation to measures in force in particular in Russia, measures which unduly restrict civic space by stigmatising, intimidating and restricting the activities of certain civil society organisations.”

Table A ‎D.1. Actors covered by the Directive

	Actors covered
“Third country entity” (Chapter 1, Article 2 §4)	(a) the central government and public authorities at all other levels of a third country, with the exception of members of the European Economic Area. (b) a public or private entity whose actions can be attributed to an entity referred to in point (a), taking into account all relevant circumstances.
“Interest representation service provider” (Chapter 1, Article 2 §3)	A natural or legal person that provides an interest representation service.
" Subcontractor " (Chapter 1, Article 2 §7)	An interest representation service provider with whom a main contractor, or one of its subcontractors, concludes a contract under which it is agreed that the subcontractor performs some or all parts of an interest representation activity that the main contractor has committed to carry out.

Source: (European Commission, 2023[2])

Decisions and public officials covered

The proposed Directive covers the development, formulation or implementation of policy or legislation, or public decision-making processes in the Union or a Member State.

Types of activities covered

The proposed Directive covers both direct lobbying and the organisation of communication or advertising campaigns (Table A ‎D.2).

Table A ‎D.2. Activities covered by the Directive

	Definition
“Interest representation activity” (Chapter 1, Article 2 §1)	An activity conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union, which could in particular be performed through organising or participating in meetings, conferences or events, contributing to or participation in consultations or parliamentary hearings, organising communication or advertising campaigns, organising networks and grassroots initiatives, preparation of policy and position papers, legislative amendments, opinion polls, surveys or open letters, or activities in the context of research and education, where they specifically carried out with that objective.
“Interest representation service” (Chapter 1, Article 2 §2)	An interest representation activity normally provided for remuneration, as referred to in Article 57 of the Treaty on the functioning of the European Union.

Source: (European Commission, 2023[2])

Exceptions

The proposal does not cover entities that receive financial support from other Member States or third country entities for purposes unrelated to interests representation. For this reason, contributions to the core funding of an organisation or similar financial support provided, for example, within the framework of a grant programme awarded by donors from a third country to a non-profit organisation, should not be considered as remuneration for an interest representation service when they are not linked to an interest representation activity, i.e. when the entity would receive the funds in question irrespective of whether it carries out specific interest representation activities on behalf of the third country providing the funding.

Article 3 (2) of the proposal also specifies the following exclusions:

• Activities carried out directly by a third country entity, i.e. the central government and public authorities at all other levels of a third country, with exception of members of the European Economic area, that are connected with the exercise of official authority, including activities related to the exercise of diplomatic or consular relations between States or international organisations.

• The provision of legal and other professional advice in the following cases:

  • Advice to a third country entity to help ensure that its activities comply with existing legal requirements.

  • Representation of third country entities in the context of a conciliation or mediation procedure aimed at preventing a dispute from being brought before, or adjudicated on by, a judicial or administrative body.

  • Representation of third country entities in legal proceedings.

• Ancillary activities, i.e. an activity that supports the provision of an interest representation activity but has no direct influence on its content.

Disclosure regime

Types of information to disclose

The entities concerned would be registered in a national register at the latest when interest representation activities begin. The information to be declared is specified in Annex I of the Directive. It includes:

• Information on each of the third country entities on whose behalf the entity carries out the interest representation activity. This includes name, address, a description of the entity’s main goals, remit and field of interest, and where available, the registration number of the third country entity in a business register or a comparable identifying code.

• The third country entity on whose behalf the third country entity is acting.

• The annual amounts covering all tasks carried out with the objective of influencing the development, formulation or implementation of the same proposal, policy or initiative, according to a range of annual amounts, for a full year of operations referring to the most recent financial year closed, as of the date of registration or the date of the annual update of the registration details.

• A description of the interest representation activity and its estimated duration, the Member States in which the interest representation activity is carried out, the legislative proposals, policies or initiatives targeted by the interest representation activity, and, where applicable, the names of subcontractors and the media service providers and online platforms where advertisements are places as part of the interest representation activity.

Frequency of disclosures

Member States shall ensure that registered entities communicate within a reasonable period of time, modifications or additions concerning the data provided on their entity, and annually modifications or additions concerning the data provided in accordance with the other information to be declared.

Registry administration, compliance and enforcement

Each Member State shall designate one or more authorities responsible for the national registers as well as one or more supervisory authorities (Article 15). The proposed Directive thus distinguishes the “authorities responsible for the national register”, which means the public authority or body responsible for maintaining a national register as referred to in Article 9 and for processing registrations submitted pursuant to this Directive from the “supervisory authority”, which means the independent public authority responsible for the supervision of the compliance with and enforcement of the obligations laid down in the Directive. The supervisory authority would be able to request information that could be shared with supervisory authorities of other Member States. They would also be able to request certain information from an entity to determine whether it falls within the scope of the Directive, according to very precise criteria specified in the Directive. Finally, supervisory authorities would have the possibility to receive information from whistleblowers about possible violations of the transparency requirements of the Directive, since the Directive would amend the Whistleblowers Directive.

Member States would be free to choose the administrative and supervisory arrangements, for example by choosing several supervisory authorities.

Violations and sanctions

Where the information provided for registration purposes is incomplete or contains manifest errors, the authority responsible for the national register shall ask the entity to complete or rectify its submissions. Within 5 working days of receiving a response from the entity in question, the authority responsible for the national register shall either include a corresponding entry in its national register, or refuse to make such an entry and inform the entity in question why the submission remains incomplete or contains manifestly incorrect information (Article 11(2)).

The proposed Directive then provides that only administrative fines capped at a certain amount depending on the economic capacity of the entity may be imposed by the supervisory authorities with jurisdiction over the entity concerned or by a judicial authority at the request of that supervisory authority in the event of violation of transparency obligations. The maximum amount of the financial sanction that may be imposed shall be, for undertakings, 1% of the annual worldwide turnover achieved in the preceding financial year, for other legal entities, 1% of the annual budget of the entity in accordance with the most recent financial year closed and for natural persons, EUR 1 000.

Criminal sanctions are explicitly excluded.

Reviews

Several reservations have been expressed about the proposal for a Directive, the most important of which is the full harmonisation approach. Under this approach, the schemes would be limited to administrative fines. Indeed, Article 4 of the Directive provides that “Member States shall not maintain or introduce, for interest representation activities falling within the scope of this Directive, provisions diverging from of those laid down in this Directive, including more, or less, stringent provisions to ensure a different level of transparency of those activities”. Member States would thus not be allowed to deviate from the rules by setting broader transparency requirements or criminal sanctions.

Secondly, the proposal follows the internal market principle and therefore provides for entities to be required to register in the Member State of their principal establishment ('country of origin' principle), irrespective of the Member State(s) in which they wish to carry out their interest representation activities. Thus, registration would not be carried out in the country in which the interest representation activity is carried out. Although this approach may strengthen the Commission's ability to enforce the Directive in Member States and provides for a mandatory exchange of information between national authorities, it could also create governance gaps conducive to the risk of interference.

Finally, several civil society organisations argued that legislative intervention should encompass all forms of interest representation activities, extending beyond activities on behalf of third countries, and should be unified under a framework on lobbying. They also underlined the risks of stigmatisation of civil society organisations and the potentially negative consequences of the Directive on their activities (Civil Society Europe, 2023[3]; Civil Society Europe, 2023[4]).

References

[4] Civil Society Europe (2023), EU Foreign Interference Law: Is Civil Society at Risk?, https://civilsocietyeurope.eu/wp-content/uploads/2023/07/230-Civil-Society-Organisations-Statement-on-EU-Foreign-Interference-Law-7-2.pdf.

[3] Civil Society Europe (2023), To defend our democracies we must defend civil society, https://civilsocietyeurope.eu/to-defend-our-democracies-we-must-defend-civil-society/.

[1] European Commission (2023), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Defence of Democracy, https://eur-lex.europa.eu/legal-content/en/TXT/HTML/?uri=CELEX:52023DC0630.

[2] European Commission (2023), Proposal for a Directive of the European Parliament and of the Council establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries and amending Directive (EU) 2019/1937, https://eur-lex.europa.eu/resource.html?uri=cellar:1916cc5e-99c7-11ee-b164-01aa75ed71a1.0001.02/DOC_1&format=PDF.