What is the Foreign Influence Transparency Scheme?
The Foreign Influence Transparency Scheme (FITS) is a statute-based scheme whose purpose is to provide the Australian government and public with “visibility of the nature, level and extent of foreign influence on Australia’s government and politics”.
How does it work?
Under the scheme, all foreign entities, organisations, and individuals are required to register their intended activities in Australia on a government registration portal, the details of which, with the exception of commercially/politically sensitive or national security-related information, is published online on the publicly visible and accessible Transparency Register.
Registration requirements
To determine whether or not they need to register with the Australian government, a questionnaire is provided to potential registrants to assist them. Should it be determined that registration is required, registrants’ applications will be expected to meet a variety of criteria to ensure they are compliant with the scheme. Failing to comply with the scheme is a criminal offense and can result in a variety of different penalties.
Compliance Expectations
The purpose for the penalties, as explained in Factsheet 17, is to encourage registrants to be compliant with the scheme and to discourage registrants from avoiding registration obligations. The repercussions for non-compliance can vary, as they depend on the severity of the offense, and can range from penalty unit fines to a prison sentence.
What is a penalty unit?
A penalty unit is a financial scaling system used to determine the fine for a given offence, where a single penalty unit is set to a specific dollar value (e.g. 1 penalty unit in New South Wales is $110), and a fine for an offense is determined by multiplying the number of penalty units associated with a given offense against the current value of a single penalty unit.
In Australia, the federal (Commonwealth) government and all states and territories have different penalty unit values. Having a scaled system for offenses allows courts to adjust them when factoring in unique circumstances, thus ensuring penalties are dynamic and proportionate, rather than set to a fixed and potentially unreasonable sum.
Factsheet 17: Offenses and Penalties for Non-Compliance
Factsheet 17: Penalties for Non-Compliance covers four types of non-compliance offenses and their associated penalties:
Engaging in registrable activities whilst not registered (under the scheme)
Penalty: between 6 months to 5 years imprisonment
Not meeting all scheme obligations
Penalty: 60 penalty units to 6 months imprisonment
Providing misleading/false information or documents
Penalty: 3 years (maximum) prison sentence
Destroying, damaging, or concealing records
Penalty: 2 years (maximum) prison sentence
Engaging in registrable activities whilst not registered
It is a criminal offense if a person is found to be unregistered and engaging in registrable activities on behalf of a foreign principal or declaring they are “no longer liable to be registered” whilst engaging in registrable activities on behalf of a foreign principal.
Failing to fulfill reporting and scheme obligations
It is an offense to not meet expected reporting obligations. This includes, for example, failing to report on:
- significant changes in circumstances
- disbursement activities
- a review of registration when a voting period begins
- engaging in registrable activities during voting periods
Part of a registrant’s obligation is to comply with requests for information from the Attorney-General’s office, should they be made. Failing to comply with such requests is considered an offence under the scheme.
Providing false or misleading information or documents
As mentioned above, the Attorney-General’s office may request additional information, and failing to comply by providing documents or information that are false and/or misleading is an offense under the scheme.
Tampering with records
One of the scheme’s requirements is that records relevant to registration be properly maintained, and any attempt taken to “damage, destroy or conceal” them or stop a registrant from preserving “proper records” will be treated as an offense.
Key Takeaways
The penalties for non-compliance as laid out in Factsheet 17 serve to remind registrants of the severe repercussions they could face for non-compliance and thus encourage them to adhere to the terms of the scheme and meet their reporting obligations.
