William Barr testifies before the Senate Judiciary Committee during his confirmation hearing on Jan. 15, 2019. Photo: Diego M. Radzinschi / NLJ

U.S. Attorney General William Barr on Thursday delivered a stark warning to American executives courting business in China, cautioning that their efforts to win favor in the country could put them at risk of running afoul of a federal law requiring the disclosure of influence activities for foreign powers.

In a speech at the Gerald R. Ford Presidential Museum, Barr urged executives to be mindful of being "used" by the Chinese government and of the possible need to register as a "foreign agent" in connection with any influence efforts for a foreign company or government.

Barr made explicit reference to the Foreign Agents Registration Act, an 80-year-old law the Justice Department has enforced with renewed vigor in recent years. The Justice Department has taken new steps to enforce provisions that require law firms, lobby shops and consulting agencies to disclose their work for certain foreign clients.

Barr said the Justice Department has seen Chinese officials and their proxies increasingly turn to corporate leaders for help promoting policies favored by the country's ruling Communist Party. Characterizing those private appeals as a "significant threat," Barr said the pressuring of corporate leaders in the U.S. raised the risk of putting a "friendly face" on foreign influence, with the Chinese "hiding behind American voices."

"America's corporate leaders might not think of themselves as lobbyists. You might think, for example, that cultivating a mutually beneficial relationship is just part of the 'guanxi'—or system of influential social networks—necessary to do business with the PRC," Barr said. "But you should be alert to how you might be used, and how your efforts on behalf of a foreign company or government could implicate the Foreign Agents Registration Act."

In 2018, the Justice Department ordered China Global Television Network, a Chinese state-run media organization commonly known as CCTV, to register as a foreign agent. Months later, in early 2019, the network registered as a foreign agent "out of an abundance of caution and in the spirit of cooperation with U.S. authorities,", even as it maintained that it is not engaged in political activities and has editorial independence.

"The attorney general's speech underscores that the Department of Justice is a front-and-center player in the Trump administration's more aggressive initiative to counter China, utilizing all the law enforcement tools available to the department," said David Laufman, a partner at Wiggin and Dana who previously headed the section of the Justice Department's national security division tasked with enforcing FARA. "To the extent, as stated by the Attorney General, that China is seeking to use U.S. business executives as a mechanism to urge U.S. lawmakers or government officials to 'go easier on China,' anyone undertaking that activity could certainly come within the scope of FARA."

Barr delivered the speech as the Trump administration has intensified its efforts to check China's growing global influence. He also alleged hackers linked to China's ruling party of targeting U.S. universities and companies with the goal of stealing valuable research concerning treatments for the coronavirus, an accusation that came a day after the Trump administration made similar claims against Russia.

"The People's Republic of China is now engaged in an economic blitzkrieg—an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world's preeminent superpower," he said.

In recent months, the Justice Department has brought prosecutions against professors at American universities alleging they concealed their ties to China's Thousand Talents Plan, a program designed to recruit scientific talent to advance Chinese interests. Among the pending prosecutions is a case against the onetime chairman of Harvard University's chemistry and chemical biology department, Charles Libor, who stands accused in Boston federal court of lying about his connection to the Thousand Talents program.

Meanwhile, the Justice Department's national security division has in recent years stepped up its enforcement of FARA, driving a flood of new "foreign agent" disclosures. The renewed attention on the decades-old disclosure has come in the wake of the Russia investigation, in which Special Counsel Robert Mueller III's office charged former Trump campaign chairman Paul Manafort with violating FARA by failing to register in connection with his past work for Ukraine.

A former prosecutor on Mueller's team, Brandon Van Grack, was appointed last year as the chief of the Justice Department unit tasked with enforcing FARA. Under his leadership, the unit has pushed more aggressively for new registrations while also scrutinizing whether consultants already registered as "foreign agents" have adequately disclosed their activities.

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