Congress Introduces Retroactive Foreign Agents Registration Act in Response to Wynn Decision

Last week, a bipartisan, bicameral group of legislators introduced the Retroactive Foreign Agents Registration Act (“RFARA”) in the U.S. Congress. Led by Chairman Mike Gallagher (R-Wis.) and Ranking Member Raja Krishnamoorthi (D-Ill.) of the U.S. House Select Committee on the Chinese Communist Party, the bill would amend the Foreign Agents Registration Act (“FARA”) to clarify that foreign agents have an ongoing obligation to register under the statute even after ceasing to act on behalf of a foreign principal. The bill was prompted by a recent decision in Attorney General of the United States v. Wynn, which interpreted the statute’s requirements.

Wynn Decision

In Wynn, the Department of Justice (“DOJ”) pursued a civil injunction to force Stephen Wynn to register retroactively for activities allegedly conducted on behalf of the People’s Republic of China (“PRC”). In a ruling that surprised the FARA bar, a federal district court judge in Washington, D.C. dismissed the complaint, holding that because Mr. Wynn terminated his agency relationship with the PRC—if one even existed—prior to the lawsuit, as both parties has acknowledged, Mr. Wynn no longer had an obligation to register. The court concluded that he therefore could not be enjoined to register under FARA, even retroactively. The court's reasoning underlying its holding was complicated and based on a prior D.C. Circuit case, United States v. McGoff, and textual analysis of the statutory provision relating specifically to civil injunctive actions. The government has appealed the district court decision, and the appeal is pending.

Congress’s Response

Although the Wynn decision only applies in the D.C. Circuit, Members of Congress have expressed concerns that the Wynn decision could have more far-reaching consequences. For example, a recent press release lamented that “an unregistered agent could simply announce that he is ending the agent relationship, never register, and face no penalty.”[1]

The new legislation is designed to overturn the conclusion in Wynn. The bill provides that DOJ “may make application for an order requiring a person to comply with [FARA and its regulations] . . . while the person acts as an agent of a foreign principal or at any time thereafter.” Additionally, the bill makes clear that it applies to any individual who “serves as the agent of a foreign principal . . . at any time before, on, or after the date of the enactment [of the Act.].” Accordingly, agents that have previously relied on the Wynn decision as a basis for non-registration would have new registration obligations under this bill, if enacted.

Curiously, the language of the bill only applies to “any individual who serves as the agent of a foreign principal.” This language would seemingly not extend to partnerships, associations, corporations, organizations, or any other combinations of individuals currently covered by the definition of a “person” under the statute. It is unclear whether Congress intends that the bill will only cover individuals like Mr. Wynn or whether the reference to “any individual” was a drafting error that could be changed in future iterations of the bill.

What Comes Next?

Given the strong bicameral and bipartisan support to regulate foreign agents, there may be an appetite in the full House to consider the bill. As we previously reported, there are a number of other bipartisan bills related to FARA reform pending in Congress, revealing Congress’s continued bipartisan attention to the statute. Covington will continue to monitor developments in changes to FARA and its regulations.

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