Two individuals were recently charged and sentenced for violating U.S. sanctions against Zimbabwe and the Foreign Agents Registration Act (FARA), underscoring the potential legal risks associated with engaging in business activities with foreign entities that are subject to U.S. economic sanctions. It also highlights the dangers of failing to register under the little-known FARA.
On Tuesday, a Chicago man, Mr. Turner, received a 15 month prison sentence for engaging in lobbying and consulting efforts, contrary to U.S. law, in order to garner U.S. government support for lifting U.S. sanctions against Zimbabwe. According to prosecutors, the defendant repeatedly met with Zimbabwean government officials in Africa, including President Robert Mugabe and the governor of the Reserve Bank of Zimbabwe, both of which are subject to U.S. sanctions. This sentence comes after Mr. Turner was found guilty of violating the International Emergency Economic Powers Act (IEEPA) last October.
Although U.S. sanctions against Zimbabwe have stayed out of the spotlight in recent years as other OFAC country programs (e.g., Iran, Syria, and more recently Cuba) have taken center stage, the U.S. Treasury Department’s Office of Foreign Assets Control continues to block the property and interests in property of individuals and entities found to be contributing to the political instability in Zimbabwe, including certain government officials and their family members. As a result, U.S. persons are prohibited from conducting business with such “specially designated nationals,” including unauthorized lobbying of the U.S. government on their behalf. IEEPA violations carry significant potential civil and/or criminal penalties.
Mr. Turner’s co-defendant, Mr. Ben Israel, was sentenced to seven months in jail last August after pleading guilty to violating the FARA statute. Under FARA, which is enforced by the Counterespionage Section of the National Security Division of the U.S. Department of Justice (DOJ), persons (i.e., individuals or companies) acting as “agents of foreign principals” (e.g., persons that represent the interests of foreign individuals, companies, or government in the United States in a political or quasi-political capacity) must register as such and must make periodic public disclosures regarding their relationship with, activities on behalf of, and receipts and disbursements in connection with a foreign principal.
Though such prosecutions are relatively rare, DOJ has prosecuted individuals in the past for failing to register under the FARA statute. Moreover, increasingly, the agency is actively contacting individuals/companies that it believes may have an obligation to register based on information available in the press, but have not done so. Given DOJ’s enhanced focus on compliance and enforcement, and the potential penalties for noncompliance, it is important that individuals and companies that represent foreign interests in the United States are aware of the activities that may trigger registration.