UK government announces launch date, revised guidance and new secondary legislation for the Foreign Influence Registration Scheme

The UK National Security Act 2023 contains provisions for a scheme requiring businesses to register arrangements in which foreign powers direct them to undertake certain activities in the UK. The provisions will come into force on 1 July 2025. What does this mean for businesses?

Two tiers to FIRS

The Foreign Influence Registration Scheme (FIRS) is intended to improve the transparency around legitimate "political influence" activities undertaken at the direction of foreign powers. It also seeks to strengthen the resilience of the UK's political system and economy against certain specified foreign powers or specified foreign power-controlled entities, which may pose a risk to UK safety and interests.

Accordingly, the FIRS consists of two tiers:

• the "political influence" tier, aimed at improving transparency around legitimate political influence activities conducted by foreign powers in the UK; and
• the "enhanced tier", which requires the disclosure of information by those undertaking activities in the UK at the direction of foreign powers (or foreign power-controlled entities) which the government is to specify as posing a risk to UK safety and interests.

Key concepts

There are three key concepts that are relevant to both tiers of FIRS.

Arrangements

First there must be an arrangement. An arrangement includes a formal arrangement such as a control, a non-legally binding agreement and an informal quid pro-quo agreement.

Arrangements with a foreign power

All arrangements must involve a "foreign power". The legislation defines a foreign power as a foreign government/political party in power, head of state, agency or authority of a foreign government, or an authority administering a region of a foreign country.

An individual member of a governing political party could be considered a foreign power, but only where they hold a position which gives them authority to act on behalf of the party.

If an arrangement is formed with an employee of one of the above (such as a foreign civil servant) when acting in this capacity, it is treated as an arrangement with a foreign power.

Groups of countries or intergovernmental organisations, such as the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) are not considered foreign powers, nor are the Republic of Ireland, the Isle of Man, the Channel Islands and British Overseas Territories.

State-owned enterprises are not foreign powers, nor are foreign political parties that are not governing.

For the enhanced tier, only specified foreign powers or entities are the relevant foreign powers.

Direction given by foreign power

All arrangements must give a "direction" for an individual or an entity to do something. A direction includes an order or instruction to act, but it can also be a request – although only where a power relationship exists.

A direction can be given to a person/entity to carry out the activities themselves, but equally can be a direction to arrange for the activities to be carried out. For example, an overseas parent may be directed to arrange for its UK subsidiary to carry out the activities.

While funding from a foreign power does not, in itself, constitute a direction, it may form part of a direction if it has conditions attached for it to be used in a particular way.

Ownership, or part-ownership of an entity by a foreign power, does not necessarily mean that activities of such entities are directed by a foreign power.

The political influence tier

This tier will require the registration of arrangements (political influence arrangements) with foreign powers under which individuals and entities are directed by a foreign power to carry out, or arrange for others to carry out, "political influence activities" in the UK on behalf of the foreign power, and where no exemption applies.

Political influence activities include:

• communications (for example, email, letter or meeting) with senior UK civil servants and public officials or politicians, election candidates, military personnel and police; or
• a public communication such as a published article, where it is not clear it is made at the direction of a foreign power

where those activities are for the purpose of influencing UK public life (such as elections, manifesto commitments, the content of legislation or politicians' or political parties' decisions).

Examples given in guidance include:

• a letter to a minister encouraging them to impose tougher regulations on a particular industry;
• a meeting with an MP seeking to persuade them to vote in a particular way in Parliament;
• a newspaper article making policy recommendations for the UK government, where it is not reasonably clear that it is written or published at the direction of a foreign power; and
• investing money in an MP’s constituency with a view to influencing the actions or votes of the to register "lobbying" activity by foreign powers.

Lobbying example

An embassy of a foreign country asks a business domiciled in that foreign country to lobby the UK government to purchase military equipment from that business.

Assuming no exemption applies, the arrangement is likely to require registration under the FIRS.

Here is an explanation:

Condition 1: A person makes an arrangement (whether formal or informal) with a “foreign power”. 

First there needs to be a formal or informal arrangement in place between the embassy (which, as an agency of the foreign country, could be considered a foreign power) and the foreign company. Arrangements include contracts, but also non-legally binding MOUs, and informal quid pro quo agreements. It does not matter that the company is outside the UK or whether it has a UK establishment.

Condition 2: The arrangement involves a “direction” from the foreign power. 

In this scenario "asking" the company to do something could be considered a direction – either if the company is required to comply, or could be a request which equivalates to a direction where there is some kind of control relationship between the foreign embassy and the foreign company, coercion exists, or expectation of compliance, or there will be a benefit to complying (for example, remuneration) or negative consequences for not complying.

Condition 3: The direction is to carry out “political influence activities” in the UK (whether by the registrant, or with or through someone else). 

First there needs to be a communication – so speaking to, writing to or having a meeting with the UK government would be in scope (equally a social media post, blog post, newspaper article – if there is no reference to the foreign power – which has the UK as its audience). The communication needs to be to influence UK public life; the most relevant case in scope would be influencing a decision of a minister of government (such as the UK secretary of state for defence) or the UK Ministry of Defence. Government decisions about policy and spending are in scope.

The enhanced tier

This tier will require registration of arrangements (foreign activity arrangements) with a specified foreign power or a specified entity which the secretary of state reasonably believes is controlled by a foreign power, which involve a direction to carry out or arrange for another person to carry out any "relevant activities" within the UK (foreign activity arrangements), and no exemption applies.

Control

The definition of "control" is wide, and for a company includes:

• holding, directly or indirectly, more than 25% of the shares in the company;
• holding, directly or indirectly, more than 25% of the voting rights in the company;
• the right to direct or control or actually directing or controlling the company's activities (in whole or part); or
• holding the right, directly or indirectly, to appoint or remove an officer of the company,

So many entities could, in theory, be "controlled" by a foreign power and be specified, which is explored below.

Relevant activities

"Relevant activities" are either those activities set out in the secondary legislation or otherwise all activities of any nature in the UK (so includes commercial and research activities, and the provision of goods and services).

Specified foreign powers and entities

"Specified" means specified by the government in secondary legislation.

Iran and Russia are to be specified under the enhanced tier of the scheme, and regulations have been published including lists of the elements of those states (including entities controlled by them) that will be specified. Note that companies which are owned by, or controlled by, foreign governments (as may be the case with a state-owned enterprise) are not foreign powers by virtue of this ownership or control.

For both countries, the government has currently chosen not to narrow the range of activities that will need to be registered, so all and any activities will be in scope.

No decision has yet been made as regards specifying China for the purposes of the enhanced tier of the scheme, despite debate on this topic in parliament and the UK press.

Specified foreign power-controlled entities

Specified foreign power-controlled entities (specified FPCEs) are required to register prior to carrying out any “relevant activities” themselves in the UK.

The regulations specifying Iran and Russia have specified which entities controlled by those states are also specified. This includes, by way of example, their judiciaries and political parties. For now, state-owned commercial enterprises have not been included.

Exemptions

There are a number of exemptions from registration available to either one or both tiers. For businesses, the most relevant include:

• certain types of arrangement such as where a UK Crown Body is a party (both tiers);
• certain activities such as legal services (both tiers);
• certain categories of person such as news publishers (political influence tier);
• sovereign wealth funds and public pension funds relating to UK investments (political influence tier); and
• arrangements to which a UK body is a party (enhanced tier).

There is no requirement to register information that is subject to legal professional privilege.

Revised guidance on the tiers

Specific guidance with sector-relevant worked examples, for business and industry, academia and the research sector, charities, defence and security and the media has been published, as have more general revised worked examples and summary tables and additional clarity regarding definition items in the legislation to aid interpretation.

Newly-published guidance also includes information for state-owned enterprises and those being directed by such enterprises and on policy-making conferences and round tables.

Access the updated government guidance.

Launch date and grace period for existing arrangements

On 1 April 2025, the UK government announced that the go-live date for the FIRS scheme would be 1 July 2025, giving businesses three months' notice to prepare for the scheme.

The obligation to register will apply to existing as well as new arrangements.

New arrangements within the political influence tier entered into once FIRS is in force must be registered within 28 days of the date of the arrangement. For the enhanced tier, the period is 10 days, and registration must occur before activities are carried out.

In addition, there will be a three-month grace period for registering existing arrangements for either tier; in other words, these must be registered by 1 October 2025. Employees, subcontractors and other persons carrying out activities during this grace period, which are pursuant to an arrangement made before the scheme’s requirements come into force, may continue with their activities during this period without prior registration being required.

Agreements or arrangements made prior to the FIRS coming into force and completed by 1 July 2025 do not need to be registered.

The launch of the scheme, originally anticipated to happen in 2024, was delayed following the change of government last year, and further work undertaken in readiness for the scheme coming into force and the related computer systems.

Registration and the register

The responsibility to register lies with the business that makes the arrangement with the foreign power or foreign power-controlled entity, not with the employee tasked with organising the arrangement. Third parties can make the registration on a business's behalf, but legal responsibility remains with the party to the arrangement.

Where there is a material change to a registered arrangement, there is an obligation to update registered information.

Registration, other than for sensitive matters, will be via an online portal with a GOV.UK One Login account and a FIRS sub-account. Registrants must assign a Senior Responsible Officer (SRO) who must verify their identity. Additional users can be added to the FIRS account. There will be no fee for registration.

The process will be managed by a Case Management Team in the Home Office. The team cannot provide advice as to whether an arrangement is in scope, but can direct registrants to guidance, and there will be an online "registration checker" to help registrants ascertain if registration is needed, and the team also cannot reject registrations.

Registration is complete as soon as submitted, though a confirmation email will be sent to the registrant.

Guidance has been provided on the information that must be registered. Registered information is published on the register as soon as reasonably practicable, meaning there could be a delay in information appearing when someone searches the register. Only political influence activities will appear on the register and there are provisions to allow the avoidance of publication where information is sensitive.

The register will be searchable by members of the public.

Information is retained on the public register for 10 years after the stated end date of an arrangement. Where an end date has not been provided at registration, the information will be retained on the register indefinitely. The Case Management Team will review any information they consider no longer needed on the register.

Where a specified FPCE is itself carrying out registerable activities in the UK, the responsibility to register lies with it. The registration form may be completed by any employee of the FPCE who is authorised to do so (or a third party on its behalf).

Offences

FIRS registration does not prevent any activity from taking place. However, the Home Office scheme unit can issue information notices to obtain further information about registered arrangements, or arrangements requiring registration.

The below provides a summary of the key offences.

Failure to register or update

Failure to register when required to do so, with knowledge the arrangement is in scope, will be a criminal offence. Failure to update a registration is also an offence.

Offences are punishable by up to two years' imprisonment (under the political influence tier) or up to five years imprisonment (under the enhanced tier) and/or an unlimited fine.

Senior managers of a business that commits an offence could also be found to be liable for the offence, if the offence is committed with their consent or connivance, or due to their neglect. For more on this (and in particular criminal liability for "espionage offences"), see our Insight.

It is an offence for a specified FPCE to carry out relevant activities unless they have registered beforehand.

Unregistered in-scope arrangements

In addition to the offence for failure to register, it is an offence if a business enters into an in-scope arrangement, knows the arrangement is in scope, does not register it in accordance with the Act and carries out activities pursuant to such unregistered arrangement.

This offence applies to foreign influence arrangements once the registration period has expired, and to foreign activity arrangements from the date of the arrangement.

An offence is also committed by an employee of the party to the arrangement, if they carry out activities pursuant to an arrangement they know to be in scope and the arrangement has not been registered.

Any person may have a defence if they have taken all steps reasonably practicable to determine whether the activities in question are or are not registered, and having taken such steps, reasonably believe that they are registered.

Obligations of employees and sub-contractors

The government has published more detailed guidance for employees and sub-contractors carrying out in-scope activities, and in particular regarding:

• their obligations to check the register if they have information which suggests there is a registrable arrangement, but a confirmation that they are not subject to obligations to undertake due diligence about who is directing any activity they are undertaking where they have no such information; and
• their obligation to contact the registrant if they believe a registration contains inaccurate or misleading information.

What actions should businesses take now?

Businesses should use the period before 1 July 2025 to identify any arrangements that might require registration and update or implement training and compliance programmes.

There is a balance to be struck between compliance and providing information which will be a matter of public record on the FIRS register; businesses will need to consider the government guidance and whether they need to register any arrangements.

In particular, a business should:

• establish if it carries out any political influence activities (or if it arranges for others to carry them out) pursuant to a direction in an arrangement with a foreign power;
• assess whether those activities fall within the "enhanced tier";
• ascertain if it has entered into, or is proposing to enter into any arrangement which involves a direction from high-risk countries (or their state entities), including Russia and Iran (and the specified elements of those states) to carry out (or arrange the carrying out) of activities in the UK;
• analyse the impact that these obligations may have on business operations and supply chains, and consider whether those arrangements need to be reviewed;
• consider if any contracts require amendment to ensure compliance;
• understand who in the organisation is responsible for registering political influence and enhanced tier activities, and ensure that they have access to government registration platforms and are suitably trained on their responsibilities under the Act; and
• communicate the obligations, risks and penalties imposed by the National Security Act 2023 more widely across their organisation, to avoid inadvertent non-compliance.

Osborne Clarke can provide support in any analysis to ensure compliance and to avoid unnecessary registrations. If you would like to discuss any of the issues raised in this Insight, please get in touch with your usual Osborne Clarke contact or one of our experts listed below.