Well, as I have just said, I do not believe that it does. If I may, I will confirm that and come back to the noble Lord.
I will now turn to the amendments from my noble friend Lady Noakes. I commend her for the spirit in which they were made. The first of these, Amendment 89A, looks to constrain our definition of “foreign principal” in the political influence tier of the scheme. She is quite right to point out that the current definition includes all foreign powers and foreign entities, but I will explain why the scheme has this breadth and the ways we have constrained the scheme to compensate for it.
The amendment seeks to include only those foreign entities that are controlled by a foreign power, rather than all foreign entities, in our definition of “foreign principal”. In the development of the scheme, we
considered this as an option. However, we have worked closely with our Australian partners and reviewed their submission to the parliamentary review of the foreign influence transparency scheme.
The Australians originally took a very broad definition of “foreign principal” to their Parliament. This was, through its passage, constrained to something akin to my noble friend’s amendment. However, this has caused the Australians significant challenges regarding compliance and enforcement. For FIRS to function as it should, it shall need to be crystal clear to people whether or not they are working for a foreign principal. With certain foreign entities, it can be very difficult to determine ownership and governance structures, and nearly impossible for a small business or individuals to know whether they are working for an entity owned or controlled by a foreign power. In their submission to their parliamentary review, the Australians have recommended that the “foreign principal” definition is broadened, in keeping with our proposals. To provide balance with the broad definition of “foreign principal”, we have drafted a narrower definition of “political influence activity” compared with the US and Australian precedents.
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Another of my noble friend’s amendments, Amendment 89C, seeks to probe why communications to the persons listed in Clause 68(2)(a) are treated differently from public communications within Clause 68(2)(b), where the communication is clear as to the involvement of a foreign principal. Clause 68(2)(a) includes private communication activities and Clause 68(2)(b) addresses public communications, which might, for example, constitute advertisements for a campaign seeking to promote a change in the law.
A key reason for this difference is enforceability. It is quite straightforward to determine whether someone has been clear as to the direction from the foreign principal in a public communication because it will say it somewhere on the communication or be implicit. However, it would be far more difficult to evidence whether an individual had been reasonably clear about their arrangement with a foreign principal during a series of private phone calls with a Secretary of State.
Another reason is to ensure transparency. This objective is met where it is clear in public communications who they are directed by. However, for private emails and meetings, it will still not transparent to the public that they are taking place at the behest of a foreign principal unless they are registered.
My noble friend Lady Noakes has also tabled two amendments, Amendments 89B and 92A, seeking to exempt those carrying out commercial and business activities from registration requirements under the political influence tier of FIRS. The noble Lord, Lord Anderson, has tabled further amendments to this, adding further exemptions for regulatory, administrative and charitable purposes.
I emphasise to noble Lords that the UK prides itself on being a hub for international business. The Government recognise that international businesses, and UK businesses with international links, engage with UK decision-makers for the purposes of influencing their decisions, maximising their prosperity and in
turn maximising UK prosperity. The scheme will not prohibit engagement with global companies where relevant arrangements or activities have been registered. Rather, it will ensure that it is transparent.
We have heard the concerns raised about the burdens for business that FIRS may create. The UK is and, we believe, will remain one of the best places in the world to do business. It is important to be clear that this scheme is not about obstructing or stifling the legitimate influence activities of businesses. It is there to encourage openness and transparency where activities are undertaken to influence the UK political system. We have deliberately designed the scheme to minimise the compliance burden for those falling within the scope of the requirements.