Businesses across Canada have less than a month to comply with the Foreign Influence Transparency and Accountability Act, which one expert describes as still being a work in progress.
The act came into effect Aug. 4 and establishes a public registry of foreign influence activities by foreign principals. It follows findings from the Hogue Commission that foreign states, such as China and Russia, are attempting to interfere in the federal electoral process.
“I think there's good reason to be concerned about foreign interference in Canada, I think we should be concerned about the integrity of our elections, and about the democratic process here,” said Dana Gregoire, an associate practising commercial and corporate law at Fasken law firm.
He said the registry risks becoming burdensome on businesses and legal professionals if the scope of requirements is not further refined.
The new Office of the Foreign Influence Commissioner of Canada released an interpretation bulletin last month attempting to clarify that legal services rendered on behalf of a foreign principal are exempt from registration requirements.
Gregoire said the bulletin addresses the Canadian Bar Association’s concerns the act may undermine solicitor-client privilege, but it does not change concerns the act has no actual provisions for exemptions.
“What we see in other jurisdictions that have these kinds of registries, the Americans … the Brits … we do see exemptions for different scopes for legal services. There is no such exemption under this federal law in Canada,” he said.
The bulletin does not address legal work beyond providing advice, including lawyers’ dealings with public officeholders on behalf of clients before a matter reaches court.
And the act is broad in defining who a public officeholder is—essentially anyone employed by the government—and what they do, said Gregoire. He added that the only stated exemption is judges.
The unintended consequence may be a deluge of registerable activities.
“If we end up with an enormous number of filings about ordinary course activity, I worry that the public may not see this as useful. I worry that the transparent objective may not be achieved,” said Gregoire.
The Law Society of B.C. issued a statement to lawyers Aug. 6 noting the exemption of legal services as well as noting “activities outside the provision of legal services in relation to a political or governmental process as part of an arrangement with a foreign principal are considered a registerable activity.”
The society urges lawyers to read the act, which defines a foreign principal as a “foreign economic entity, a foreign entity, a foreign power or a foreign state.”
The bulletin stated a foreign principal can be “an organization representing the interests of one or more foreign governments or authorities or bodies” or “a business, cultural group, educational institution, non-governmental organization, media outlet, [or] charity that is effectively controlled by another foreign principal … even if this relationship is not formally stated.”
An individual or organization is not considered a foreign principal solely because they are not Canadian, or based outside Canada or receive funding from a foreign source, so long as they remain “accountable to an entity, such as a board, shareholders, owner(s) or creditor(s), which is not linked to a foreign principal.”
Foreign government bodies, diplomats and government workers are also exempt.
Gregoire said businesses and organizations may need to lean on their counsel to ensure their own responsibilities are met. He said they should also develop policies and procedures to assess and structure their engagements to ensure accurate disclosure and avoid penalties or prosecution.
Edmund Leung, chair of Vancouver Society in Support of Democratic Movement, said a lack of disclosure from businesses engaged in politics is concerning to diaspora communities.
“If [activity] is not related to public officeholders, this act doesn’t apply,” said Leung.
“If you have influence in a private business there’s nothing this act can do for those activities. That’s a gap because my group is concerned with CCP [Chinese Communist Party] influence and they do many things outside of working with election candidates,” said Leung. “They try to promote pro-CCP candidates by other means through misinformation, for example.”
Anton Boegman, Canada's first foreign influence transparency commissioner, told media last month that the registry cannot prevent foreign interference entirely.
“They can go through proxies by influencing a business to promote a candidate,” Leung said.
And Gregoire said if a foreign principal hires a lobbyist or a communications professional, then the obligation to register rests with the latter two.
“This obligation rests with this person when they understand what is happening here is some kind of arrangement, and there is a foreign principal here and the net of this arrangement is that they are acting under their direction or that they are acting in association with them,” he said.
“That's when the obligation to register arises. Once you undertake, you are committed.”
To that end Gregoire said the registry may help shine light on legal foreign influence and help curb covert foreign interference in politics.
“For the government, the challenge is that a motivated actor can characterize what they're doing in all kinds of ways. They can obscure the source of this foreign influence,” said Gregoire.
“So it's a difficult balance to strike. And so what they have done is they have created a fairly broad act in an attempt to frustrate any kinds of those efforts. There’s a lot of anti-evasion language that they've put in there. It’s a difficult balance.”
Gregoire said he expects to see more interpretation bulletins from Boegman over the coming years.
“It’s a start,” said Leung.
