The Foreign Agents Registration Act (FARA) has long been a thorn in the side of K Street lobbyists, corporate public affairs teams, and international nonprofits operating in the U.S. Originally passed in 1938 to counter Nazi propaganda, FARA has evolved into a sweeping disclosure law designed to track foreign influence efforts. However, under Attorney General Pam Bondi, the Trump administration is moving to gut FARA enforcement—prioritizing “espionage-related” cases while rolling back broad transparency mandates.

This shift comes as the Department of Justice (DOJ) finalizes a significant overhaul of FARA regulations, reshaping the compliance landscape for lobbying firms, multinational corporations, and nonprofits with foreign ties.

Does this deregulation reduce compliance headaches, or does it open the floodgates to foreign influence with little oversight?

Subscribe now

1. Key Changes Under Bondi’s DOJ

A. Biden DOJ's Last Minute Rule Tightening

The DOJ released a Notice of Proposed Rulemaking (NPRM) in January 2025 that redefined what qualifies for exemption under FARA. The most contentious change was the introduction of a "totality-of-the-circumstances" test, which replaces the prior bright-line exemptions for commercial and legal activities.

The DOJ explicitly excluded FARA exemptions for activities that:

• Promote a foreign government’s or political party’s interests.

• Are influenced by foreign governments or political parties.

• Primarily benefit foreign governments.

• Involve entities supervised or financed by foreign governments.

These changes would make it significantly harder for organizations to claim that their lobbying or PR work falls outside FARA’s purview.

B. Enforcement Rollback: From Transparency to Espionage

While the NPRM expands who qualifies as a foreign agent, AG Bondi’s DOJ enforcement pivot does the opposite—narrowing enforcement efforts to “traditional espionage” cases. Specifically:

• The Foreign Influence Task Force (FITF) has been disbanded. This unit was responsible for cracking down on undisclosed foreign lobbying.

• Corporate enforcement has been deprioritized, with resources reallocated to cartel-related FCPA cases instead.

• DOJ has deprioritized FARA-based prosecutions for undisclosed PR and lobbying efforts, signaling fewer cases against consulting firms and former government officials working on behalf of foreign clients.

C. Targeting FARA Compliance Through Advisory Opinions

The DOJ has acknowledged that the "totality" test remains vague and plans to issue advisory opinions on a case-by-case basis. This signals an intention to test legal boundaries through enforcement cases, rather than provide clear-cut compliance guidance.

Why this matters:

• Many lobbying firms and multinationals now operate in a gray zone, unsure if their work will be considered FARA registrable.

• DOJ’s case-by-case approach means companies and law firms may become test cases before clear compliance standards emerge.

• The legal industry is particularly vulnerable—as the revised legal exemption now excludes non-legal activities like lobbying and PR even when conducted by attorneys.

2. Implications for Key Stakeholders

A. U.S. Lobbying and PR Firms: Loopholes, But More Scrutiny

For K Street’s major lobbying and PR firms, the rollback in enforcement is a clear win. Less scrutiny means:

• Easier pathways to work with foreign clients without the stigma of FARA registration.

• Fewer investigations into undisclosed lobbying efforts, including work for foreign sovereign wealth funds and state-backed corporations.

• Lower compliance costs, as fewer firms will need to preemptively register under FARA.

However, this deregulation is a double-edged sword. The increased regulatory ambiguity could make firms more susceptible to retroactive enforcement. If a future administration reinstates FARA crackdowns, firms operating in this gray area may be exposed to major legal and reputational risks.

B. Multinational Corporations: Higher FARA Risk in the Gray Zone

For Fortune 500 companies with global lobbying operations, the commercial exemption revision is a major concern. Previously, corporate advocacy efforts were often shielded under the “commercial” exemption if they were not explicitly political. Now:

• Global corporations may need to register under FARA if their work “predominantly serves” foreign interests.

• Trade associations and business councils with foreign funding could face new scrutiny.

• Foreign state-owned enterprises (SOEs)—such as energy, defense, or telecom firms—will struggle to avoid FARA registration for their U.S. lobbying.

In short, corporate government affairs teams now face a more complex and uncertain FARA compliance landscape.

C. Nonprofits & Advocacy Groups: Chilling Effect or Strategic Opportunity?

For international NGOs and nonprofit advocacy groups, the FARA revision introduces serious risks:

• Foreign-funded nonprofits may be reclassified as foreign agents if they engage in U.S. political advocacy.

• Human rights and pro-democracy groups operating in authoritarian states could face new compliance burdens.

• Legal defense funds for foreign nationals could face new restrictions under the narrowed legal exemption.

However, for conservative think tanks and advocacy organizations with foreign donors, the DOJ’s enforcement rollback offers a strategic opening. These groups may find it easier to engage in policy influence activities without registering under FARA.

3. Who Benefits and Who Loses?

Temporary Deregulation or Long-Term Shift?

The Trump administration’s FARA overhaul represents a fundamental shift—one that prioritizes espionage-related foreign influence while de-emphasizing transparency enforcement. In the near term, this shift offers relief to K Street and corporate public affairs teams but creates significant compliance uncertainty for multinationals and nonprofits.

However, if political winds shift in 2029 or beyond, we could see a sharp regulatory reversal—with firms operating in today’s “gray zone” becoming prime targets for retroactive FARA enforcement. For now, U.S. lobbying firms, global corporations, and advocacy groups must navigate a highly ambiguous compliance environment, balancing short-term deregulation benefits against long-term legal risks.

Subscribe now

Sources and Further Reading

• DOJ FARA Regulatory Overhaul – National Law Review. Will FARA Get a Facelift? DOJ Proposes Updated Regulations for the First Time in 15 Years. Link

• Proposed Changes to FARA Exemptions – JD Supra. DOJ Announces Significant Proposed FARA Amendments Narrowing Exemptions. Link

• Foreign Agent Law Changes – The Hill. Foreign Agent Law Faces Sweeping Changes Under New Regulations. Link

• Bondi’s DOJ Enforcement Rollback – Bloomberg Law. Bondi Scales Back U.S. Justice Department’s White-Collar Enforcement. Link

• FARA Compliance Uncertainty – King & Spalding. Proposed FARA Changes Will Result in More Questions Than Answers. Link

• DOJ’s New FARA Regulations – Morrison & Foerster. DOJ Proposes Significant Changes to FARA’s Regulations. Link

• Foreign Influence Policy Shift – Yahoo News. An Invitation for Foreign Actors? Bondi Tells DOJ to Back Off. Link

• Long-Awaited FARA Proposal – Mayer Brown. U.S. Department of Justice Issues Long-Awaited Proposal to Revamp FARA Regulations. Link

• Key Issues in FARA 2025 – Mayer Brown. The U.S. Foreign Agents Registration Act: Key Issues to Watch in 2025. Link

• New Compliance Risks Under FARA – Nossaman LLP. U.S. DOJ Proposes FARA Amendments to Narrow Exemptions for Commercial Lobbying. Link

• Undisclosed Foreign Consulting Services – Citizen.org. Kash Patel’s Failure to Register as a Foreign Agent Must Be Investigated. Link

• Modernizing FARA Enforcement – Morgan Lewis. DOJ’s Latest Attempt at Modernizing FARA Signals Greater Focus on Compliance and Enforcement. Link

• FARA’s Impact on Corporate Compliance – Reuters. Corporate Lessons from Recent Foreign Influence Prosecutions. Link

• Bondi’s DOJ Shake-up – Bloomberg Government. Bondi Confirmed as Trump’s Attorney General to Lead DOJ Shake-Up. Link

• New DOJ FARA Regulations Review – MoFo Insights. Lawfare Daily: The Proposed New FARA Regulations. Link

• FARA Rule Complications – O’Melveny & Myers LLP. Proposed FARA Rule Complicates Compliance and Suggests Aggressive Enforcement Will Continue. Link

Green Light for Corporate Corruption or a National Security Policy?

The Trump administration’s deregulatory crusade has taken a bold new step under Attorney General Pam Bondi, redefining the enforcement priorities of the Foreign Corrupt Practices Act (FCPA). Historically, the FCPA has been the cornerstone of U.S. anti-bribery efforts, holding multinational corporations accountable for paying off foreign officials. However, a new DOJ directive issued on February 5, 2025, dramatically narrows the scope of enforcement—shifting focus from traditional corporate corruption to transnational criminal organizations (TCOs), particularly drug cartels and human smuggling networks.

This move abandons long-standing corporate anti-corruption efforts, triggering concerns that foreign bribery schemes in key industries—energy, defense, healthcare, and finance—will now flourish unchecked. But proponents argue that refocusing on cartel-linked corruption aligns with national security priorities.

The key question: Is this a strategic reprioritization or an open invitation for corporate bribery?

Subscribe now

1. Breaking Down Bondi’s FCPA Overhaul

A. A Hard Pivot to Cartel-Linked Corruption

The new DOJ directive deprioritizes corporate bribery prosecutions unless they are directly linked to drug cartels, human smuggling, or firearms trafficking. Specifically:

• DOJ will now prioritize FCPA cases where bribes are paid to foreign officials in connection with cartels or TCOs, including:

  • Bribes to facilitate human smuggling, such as payments to foreign border officials.

  • Bribes to enable drug and arms trafficking, including payments to port and customs officials.

• Traditional corporate bribery cases—such as paying government officials to win contracts—are no longer an enforcement priority.

Why this matters:
For the first time since the FCPA’s passage in 1977, corporate corruption not tied to organized crime is effectively decriminalized at the federal level.

B. Procedural Changes: Decentralizing FCPA Enforcement

The DOJ has removed centralized oversight of FCPA cases, instead:

• Allowing U.S. Attorneys’ Offices to prosecute cartel-linked FCPA cases without approval from the DOJ’s Fraud Section.

• Eliminating the need for pre-authorization from the Criminal Division, reducing DOJ oversight on whether cases move forward.

This fragmented approach could lead to wildly inconsistent enforcement across jurisdictions.

C. Resource Reallocation: Corporate Oversight Defunded

• The Kleptocracy Asset Recovery Initiative and Task Force KleptoCapture—units responsible for tracking corrupt foreign assets—have been disbanded.

• Resources have been redirected to cartel-related financial crimes, with a focus on MS-13, Tren de Aragua, and other TCO-linked networks.

Bottom line:

• The DOJ no longer sees corporate corruption as a stand-alone threat—only cases tied to national security concerns (cartels, terrorism, and human trafficking) will receive attention.

• Major multinational corporations now operate in a gray zone where bribery laws may no longer be enforced.

2. Implications for Key Sectors

A. U.S. Lobbying & PR Firms: The “Foreign Bribery Loophole”

Washington’s K Street lobbying firms and PR agencies have historically navigated FCPA risks carefully when representing foreign governments and state-owned enterprises. Now, with the corporate corruption crackdown abandoned, lobbying and PR firms may:

• Expand their foreign influence activities without fearing FCPA scrutiny.

• Take on riskier clients, including foreign sovereign wealth funds and state-owned companies from China, Russia, and the Gulf States, with fewer legal repercussions.

• Exploit the DOJ’s cartel carveout—lobbying for non-criminal foreign governments now operates in a regulatory gray zone.

Big picture:

• The U.S. may become a global hub for undisclosed foreign lobbying and influence operations, reducing transparency on how foreign powers shape American policy.

B. Multinational Corporations: A Hall Pass for Bribery?

For Fortune 500 companies engaged in global business, the Bondi memo represents a major regulatory rollback.

• Industries previously under DOJ scrutiny for FCPA violations—such as energy, defense, and healthcare—will face minimal enforcement risks.

• Foreign corrupt payments to secure business deals will likely see a resurgence, as DOJ has deprioritized enforcement outside cartel-related cases.

• Mexico-facing industries—logistics, infrastructure, and automotive—may face new risks, as bribery cases linked to cartel influence could still be prosecuted.

C. Nonprofits & Advocacy Groups: Collateral Damage?

International nonprofits and advocacy groups working in corruption-prone regions (e.g., Latin America, Africa, and Eastern Europe) face a dangerous new reality:

• Humanitarian organizations with foreign government funding may face unexpected FCPA scrutiny if tied to alleged cartel activity.

• U.S.-based NGOs advocating for anti-corruption reform could lose a key enforcement tool, making foreign governments less accountable.

• Foreign aid programs that previously relied on FCPA oversight to prevent misappropriation will have fewer safeguards.

The concern:

• The rollback could weaken international anti-corruption frameworks, including the OECD Anti-Bribery Convention and United Nations Convention Against Corruption (UNCAC).

3. Who Benefits, Who Loses?

4. Is This the End of Corporate FCPA Enforcement?

With the Bondi DOJ dismantling corporate corruption oversight, the U.S. is experiencing the most radical shift in FCPA enforcement since its inception. The administration frames this move as a national security priority—claiming that targeting cartel-linked bribery is a more effective use of federal resources.

However, critics argue this opens the floodgates for unchecked corporate corruption, creating a de facto "safe harbor" for foreign bribery.

Subscribe now

Sources and Further Reading

• DOJ FCPA Overhaul Memo – U.S. Department of Justice. Attorney General Bondi Issues Directive Limiting Scope of FCPA Enforcement. Link

• Treasury Sanctions & Cartel Designations – U.S. Department of Treasury. Treasury Designates Foreign Terrorist Organizations Linked to Mexican Cartels. Link

• Bondi’s DOJ Enforcement Rollback – Bloomberg Law. Bondi Scales Back U.S. Justice Department’s White-Collar Enforcement. Link

• FCPA Reform Analysis – Debevoise & Plimpton. FCPA Update: Bondi’s DOJ Narrows Corporate Anti-Bribery Focus. Link

• FCPA Policy Shifts and National Security – U.S. Department of Treasury. Revised DOJ Priorities for Foreign Bribery Enforcement. Link

• Mexican Cartels as Foreign Terrorist Organizations – JD Supra. Implications of Cartel FTO Designations on U.S. Business Operations. Link

• Bondi’s FCPA Memo & Corporate Prosecutions – Foley Hoag LLP. AG Bondi Overhauls FCPA Enforcement in Day-One Memo. Link

• U.S. Anti-Corruption Strategy Shift – Bloomberg Law. Bondi’s DOJ Rolls Back Corporate Corruption Prosecutions. Link

• OECD Anti-Bribery Convention Risks – WilmerHale. FCPA Year in Review 2024: Developments and Predictions for 2025. Link

• Global Bribery and Corruption Outlook – Hogan Lovells. 2025: A Year of Change in Bribery and Corruption Enforcement. Link

• DOJ Corporate Crime Focus Shift – MLex. Bondi Deprioritizes U.S. Anti-Corruption Corporate Criminal Enforcement. Link

• Implications for Mexican Banks and Finance – Paul Hastings LLP. Mexican Cartel Designations as FTOs: Risks for Financial Institutions. Link

• Cartel Terror Designations and Business Risk – Atlantic Council. Mexican Cartels as Foreign Terrorist Organizations: Impact on U.S. Businesses. Link

• Intersection of FCPA and Antitrust Violations – U.S. Department of Justice. International Cartels and the FCPA: Overlapping Risks for Corporations. Link

• Corporate Bribery Trends Under Bondi DOJ – Covington & Burling LLP. What to Watch for in FCPA Enforcement in 2025. Link

• Anti-Corruption Enforcement in the Americas – DLA Piper. How Cartel Enforcement is Evolving Across the Americas. Link

• Foreign Lobbying and Corporate Bribery Loopholes – Salon. Bondi’s DOJ Tells Prosecutors to Quit Worrying About Foreign Lobbying. Link

• Trump-Era White Collar Enforcement Strategy – Vinson & Elkins LLP. White Collar and Corporate Criminal Enforcement in the Trump 2.0 Era. Link

• Human Smuggling and Cartel Financing Risks – Money Laundering News. FinCEN Issues Alert on Human Smuggling and Trafficking Along the Southwest Border. Link

• Trump DOJ Policy Changes on White Collar Crime – Morgan Lewis. Newly Confirmed AG Pam Bondi Issues Directive Limiting FCPA Enforcement. Link