The UK government is exploring changes to plans for an American-style register of “foreign influence” after concerns were raised by the US, EU member states and business executives.
The Foreign Influence Registration Scheme, part of the government’s national security bill, has been criticised for risking relations between the UK and key allies as well as potentially harming inward investment.
The government is expected in the coming days to tell critics in parliament what concessions it is prepared to make to allay concerns over the scheme.
The bill as currently worded sets different rules for what it calls specified governments — expected to include Iran, Russia and other hostile states — whose activities cause the UK government particular harm.
However, the requirement for anyone dealing with any foreign government or other entity incorporated outside the UK to register with the scheme has caused alarm.
The US and EU member states have expressed astonishment that businesses and civil society groups from their countries are being grouped with those from nations like Iran, Syria or Russia.
A Home Office insider said the legislation was being “reviewed” but the exact nature of the proposed changes had not been decided. He added: “There are obvious ways to lessen its impact on friendly countries.”
The scheme is similar to legislation in the US and Australia, but legal experts warn that it goes further and is more intrusive. Critics say the draft wording would require businesses and overseas organisations to register every engagement they have with UK government officials as part of their day-to-day business with the Home Office.
This would lead to a “lot of extra and unwelcome red tape”, according to Duncan Edwards, head of BritishAmerican Business, the largest transatlantic corporate membership association.
Edwards said US companies had voiced concerns about how they were being treated under the scheme.
“The US is a large investor in the UK so it’s pretty offensive. This will choke off conversations between business and the government at all levels,” he warned. “We have had ministers desperately trying to encourage inward investment but at the same time you could be facing two years in jail if you go for a drink with a special adviser and forget to register.”
He added that a recent roundtable between US life sciences firms and government officials would have yielded 78 separate registrations.
“There would be hundreds every day. What’s the problem they are trying to solve? Legal counsel at these firms will just say don’t engage if there is any risk at all,” he said.
The group has lobbied ambassadors in Washington and officials in London over the plans, which it says would effectively stop US companies, or their representatives, from engaging with the UK government.
The vague wording around the scheme has also been criticised for potentially criminalising the conduct of journalists and campaigners.
Diplomats from EU member states have called the rules around the register “outrageous”. They say they would seriously restrict normal dialogue with the government on issues ranging from business to cultural programmes.
They have also warned the Home Office that the scheme could hit inward investment, not least because of the risk that companies could face heavy penalties if they inadvertently failed to comply.
One solution they have suggested is for the scheme to apply solely to hostile states, exempting allies such as the EU and US.
Peers on all sides of the House of Lords have also expressed concern about the scheme. Earlier this month, Lord Marks, a Liberal Democrat peer, put forward an amendment to allow people charged under parts of the bill that could affect journalists to argue that their actions were in the public interest.
Lord David Anderson, a barrister who is a former independent reviewer of terrorism legislation, has been the most vocal critic of that scheme in the upper house.
While he welcomed the constraints on entities wholly owned by specified states such as Russia and Iran, he warned that the scheme would impose a significant amount of new bureaucracy on a wide range of charities and other civil-society organisations that receive overseas funding.
“This would restrict legitimate interchange without any obvious national security benefit,” he said.
