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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
foreign agents; registration; attorney general
Purpose
Prohibits a person from acting as an agent of a foreign principal from a country of concern unless the person has filed a registration statement with the Attorney General's (AG) office and paid the fee as prescribed by the AG. Appropriates $100,000 and one FTE position in FY 2025 from the Consumer Protection-Consumer Fraud Revolving Fund (Fund) to the AG's office to implement the outlined requirements relating to the registration of an agent of a foreign principal from a country of concern.
Background
The AG is
required to serve as the chief legal officer of the State of Arizona and must:
1) be the legal advisor of the departments of the State of Arizona and render
such legal services as the departments require; 2) approve long-range plans for
developing departmental programs therein, and coordinate the legal services
required by other departments of the state or other state agencies; and 3)
represent political subdivisions, school districts and municipalities in suits
to enforce state or federal statutes pertaining to antitrust, restraint of
trade or price-fixing activities or conspiracies, if the AG notifies in writing
the political subdivisions, school districts and municipalities of the AG's
intention to bring any such action on their behalf. The AG is allowed to
compromise or settle any action or claim by or against the State of Arizona or
any department, board or state agency (A.R.S.
§ 41-192).
In 1938 the United States enacted the Foreign Agents Registration Act (FARA) with the purpose of requiring individuals doing political or advocacy work on behalf of foreign entities in the United States to register with the U.S. Department of Justice and to disclose the foreign agent's relationship, activities, receipts and disbursements in support of the foreign agent's activities. FARA requires the U.S. Attorney General to maintain a public database of registration statements. Individuals who willfully violate FARA or associated regulations are subject to fines up to $10,000 and imprisonment up to five years (22 U.S.C. §§ 612, 615 and 618).
H.B. 2506 appropriates $100,000 and one FTE position in FY 2025 from the Fund to the AG's office.
Provisions
1. Prohibits a person from acting as an agent of a foreign principal from a country of concern unless the person has filed a registration statement with the AG's office and paid the fee as prescribed by the AG.
2. Requires a person, within 10 days after becoming an agent of a foreign principal from a country of concern, to file a registration statement with the AG's office, under oath, on a form prescribed by the AG's office.
3. Requires the registration statement to include all of the following:
a) the registrant's name;
b) the registrant's address;
c) the foreign principal's business address and all other associated business addresses in the United States or outside of the United States;
d) the status of the registrant and any associated information based on the following:
i. if the registrant is an individual, the individual's nationality and addresses;
ii. if the registrant is a partnership, the names, addresses and nationalities of each partner and a copy of the partnership's articles of incorporation; or
iii. if the registrant is an association, corporation or organization, all of the following:
a) the names, addresses and nationalities of each director and officer and of each person performing the functions of a director or officer;
b) a copy of the charter, articles of incorporation or bylaws; and
c) a copy of a statement of the terms and conditions of every agreement relating to the association, corporation or organization, including powers and purposes and a statement of ownership and control;
e) a comprehensive statement of the nature of the registrant's business;
f) a complete list of the registrant's employees and a statement of the nature of the work in which each employee is involved;
g) the names and addresses of every foreign principal from a country of concern on whose behalf the registrant is acting;
h) the extent, if any, to which the foreign principal from a country of concern is supervised, directed, owned, controlled, financed or subsidized, in whole or in part, by any government of a foreign country or foreign political party or by any other foreign principal from a country of concern;
i) copies of each written agreement and the terms and conditions of each oral agreement, including all modifications or, if no agreements exist, a comprehensive statement of all the circumstances in which the registrant is an agent of a foreign principal from a country of concern;
j) a comprehensive statement of the nature and method of performance of any agreement and the existing and proposed activities engaged in by the registrant as an agent of a foreign principal from a country of concern, including any political activities;
k) the amount of any monies that the registrant has received from the foreign principal from a country of concern, either as compensation or disbursement, the form and time of each payment and from whom the registrant received the payment; and
l) a comprehensive statement of every activity that the registrant is performing or has agreed to perform for any other person other than a foreign principal from a country of concern and that requires the registrant's registration, including a detailed statement of any activity that is a political activity.
4. Requires the registration statement and any other supplemental information to be executed by the individual registrant unless any of the following apply:
a) if the registrant is in a partnership, the registration statement and any other supplemental information must be executed by the majority of the members; or
b) in any instance not involving an individual or partnership, the registration statement and any other supplemental information must be executed by a majority of the officers or persons performing the functions of officers or by a majority of the board of directors or persons performing the functions of directors.
5. Requires the AG's office, if the AG's office determines that a registration statement is deficient in any way, to notify the registrant in writing of any deficiencies.
6. Requires the registrant, within 10 days after receiving the notice of deficiency, to amend the registration statement and cure all deficiencies.
7. Requires the registrant, if the registrant receives any additional information that the registrant is required to report, to update the registration statement within 10 days after receiving the additional information.
8. Requires the AG's office to retain a copy of all registration statements and to post each registration statement on the AG's website.
9. Exempts, from the requirements relating to the registration of an agent of a foreign principal from a country of concern, the following:
a) an accredited diplomatic or consular officer of a foreign government that is recognized by the U.S. Department of State, while the officer is engaged exclusively in activities that are recognized by the U.S. Department of State as being within the scope of the functions of the officer, or the staff or employee of the officer;
b) if the foreign government is recognized by the United States, any official of the foreign government who is not any of the following:
i. a public relations counsel;
ii. a publicity agent; or
iii. an information service employee; and
c) agency proceedings required by statute or rule to be conducted on the record.
10. Prohibits a person in the State of Arizona that is an agent of a foreign principal from a country of concern from doing any of the following:
a) transmitting through the U.S. mail, or by any other means or instrumentality of interstate or foreign commerce, any informational materials for or in the interests of a foreign principal from a country of concern without including a conspicuous statement within the materials that the materials are being distributed by the agent on behalf of a foreign principal;
b) transmitting or conveying to any agency or public official in the state any political propaganda in support of a country of concern unless the propaganda is accompanied by a true and accurate statement that the person is registered as an agent of a foreign principal; or
c) requesting any information or advice regarding the political or public interests, policies or relations of a country of concern.
11. Requires a registered agent of a foreign principal of a country of concern, if the registered agent appears before any committee of the Arizona Legislature to testify for or in the interest of the foreign principal from a country of concern, to provide the committee with a copy of the registration statement filed with the AG's office.
12. Deems it unlawful for an agent of a foreign principal from a country of concern to be a party to any contract or agreement, either express or implied with a foreign principal from a country of concern where the amount of compensation is contingent, in whole or in part, on the success of any political activities carried out by the agent of a foreign principal.
13. Deems that a person who commits the prescribed violation relating to compensation for political activities is guilty of a class 6 felony and a fine of $50,000 per violation.
14. Requires all employees of the State of Arizona to submit a signed affidavit annually to the employee's employer attesting that the employee is not an agent of a foreign principal.
15. Deems that any person that knowingly or willfully violates the prescribed requirement that all employees of the State of Arizona submit a signed affidavit annually attesting that the employee is not an agent of a foreign principal is guilty of a class 4 felony and subject to a fine of $100,000 per violation.
16. Requires, any person who is a student, faculty member, researcher or adjunct professor or who is otherwise employed or associated with a university in the State of Arizona and who willfully violates the outlined requirements relating to the registration of an agent of a foreign principal from a country of concern, makes a false statement of material fact or willfully omits any material fact required to be state in any registration statement or supplement or in any other document filed with the AG's office, to be expelled or dismissed from any role with the institution of higher education and prohibits the person from entering any institution of higher education's campus in the state.
17. Requires each institution of higher education in the State of Arizona to adopt a policy for the expulsion or dismissal of any individual who is in violation of the outlined requirements.
18. Requires each institution of higher education in the State of Arizona to develop a reporting mechanism for students who are former citizens and dissidents of a country of concern and who are being harassed by an agent of a foreign principal to file a report with the institution of higher education describing the harassment.
19. Deems that any alien who fails or is found to be in a conspiracy to fail to report the harassment by an agent of a foreign principal is subject to referral to the U.S. Department of Justice.
20. Allows the AG to adopt rules necessary to implement the outlined requirements relating to the registration of an agent of a foreign principal from a country of concern.
21. Appropriates
$100,000 and one FTE position in FY 2025 from the Consumer Protection
-Consumer Fraud Revolving Fund to the AG's office to implement the outlined
requirements relating to the registration of an agent of a foreign principal
from a country of concern.
22. Defines agent of a foreign principal as a person:
a) that acts as a representative or employee of a foreign principal;
b) that acts in any capacity at the order or request or under the direction or control of a foreign principal;
c) whose activities are directly or indirectly supervised, directed, controlled, financed or subsidized, in whole or in part, by a foreign principal and that directly or through any other person engages in political activities for or in the interests of a foreign principal in the state;
d) that acts as a public relations counsel, publicity agent, information service employee or political consultant for or in the interests of a foreign principal in the state;
e) that solicits, collects, disbursed or dispenses contributions, loans, monies or other things of value for or in the interests of a foreign principal in the state;
f) that represents the interests of a foreign principal before an agency or public official in the state; or
g) that agrees, consents, assumes or holds the person out to be an agent of a foreign principal.
23. Stipulates that agent of a foreign principal does not include:
a) any news, press service or association organized under the laws of the United States or any state or other area subject to the jurisdiction of the United States; or
b) any newspaper, magazine, periodical or publication.
24. Defines country of concern as:
a) China, including the Hong Kong special administrative region;
b) Cuba;
c) Iran;
d) North Korea;
e) Russia;
f) Saudi Arabia; and
g) Venezuela.
25. Defines foreign political party as any of the following:
a) the government of a foreign country or a foreign political party;
b) a partnership, association, corporation, organization or other combination of persons organized under the laws of or having its principal place of business in a foreign country; or
c) a partnership, association, corporation, organization or other combination of persons that is at least 20 percent owned by a partnership association, corporation, organization or other combination of persons organized under the laws of or having its principal place of business in a foreign country.
26. Defines government of a foreign country as:
a) any person or group exercising sovereign political jurisdiction over any country, other than the United States, or over any part of a country; and
b) includes the following:
i. a subdivision of any group and any group or agency where a sovereign's authority or functions are directly or indirectly delegated; and
ii. a faction or body of insurgents within a country assuming to exercise the governmental authority regardless of whether the faction or body of insurgents has or has not been recognized by the United States.
27. Defines information service employee as any person that is engaged in furnishing, disseminating or publishing accounts, descriptions, information or data with respect to the political, industrial, employment, economic, social, cultural or other benefits, advantages, facts or conditions of any country other than the United States or of any government of a foreign country, of a foreign political party or of a partnership, association, corporation, organization or other combination of individuals organized under the laws of or having its principal place of business in a foreign country.
28. Defines conspicuous, person, publicity agent and public relations counsel.
29. Becomes effective on the general effective date.
House Action
GOV 2/14/24 DPA 8-0-1-0
3rd Read 2/26/24 37-19-3-0-1
Prepared by Senate Research
March 11, 2024
ZD/SB/cs