BAKGRUNN (fra kommisjonsforslaget)

This proposal aims to contribute to the proper functioning of the internal market for activities conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or of public decision-making process, in the Union (“interest representation activities”) carried out on behalf of third countries by laying down harmonised rules for a high level of transparency of such activities when carried out in the internal market.

A high level of transparency in this field will also place citizens, public decision-makers and other stakeholders in a better position to understand which third countries request the provision of interest representation activities.

To the extent that it is normally provided against remuneration, interest representation, including interest representation provided to third countries, constitutes a service within the meaning of Article 57 of the Treaty on the Functioning of the European Union (‘TFEU’).

The provision of interest representation in the Union is a growing and increasingly cross-border activity. Interest representation activities are regulated in different ways in the Member States. Currently, 15 Member States 1  have a transparency register on interest representation activities, though not always at the national level. Those Member States that have a regulatory framework provide for measures that differ in the following respects: the scope of the entities and activities covered, including the relevant definitions of interest representation activities; the thresholds for the size of entities or level of activities triggering transparency or registration requirements; the requirements concerning record keeping; the data collected from entities engaged in interest representation, including regarding their identity and the identities of their clients; the existence, powers, structure and independence of supervisory authorities; the nature of sanctions and the amounts of fines, where they exist; and the frequency of updates to the registered information. 12 Member States do not regulate the transparency of interest representation activities. The legislative framework is therefore highly fragmented across the Union 2 .

This fragmentation causes obstacles in the internal market for interest representation activities, including when carried out on behalf of third countries, which undermine the proper functioning of the internal market. The divergences among Member States create an uneven playing field and increase compliance costs for entities seeking to carry out cross-border interest representation activities. The uneven playing field directs cross-border interest representation activities away from more regulated Member States towards less regulated ones. There is, in turn, a risk of forum shopping and regulatory arbitrage, that is, the exploitation of differences in regulatory requirements, by entities seeking to evade regulation in certain Member States.

Interest representation activities are increasingly used by third country governments alongside formal diplomatic channels and processes to promote their policy objectives 3 . This situation is recognised by Member States as presenting an opportunity for third-country actors to evade transparency requirements and covertly influence decision-making and democratic processes in the Union. Some Member States are therefore considering developing new rules to address foreign influence, including by imposing general obligations on entities receiving foreign funding that would in practice apply to the provision of interest representation on behalf of third countries. The fragmentation described is therefore likely to increase specifically in relation to interest representation carried out on behalf of third countries. This would expose entities carrying out interest representation to additional obstacles when providing interest representation for third countries in the internal market.

When presented transparently, ideas from third countries can contribute positively to public debate and are a welcome part of international engagement. However, when carried out covertly, interest representation on behalf of third countries is prone to being used as a channel for interference in Union democracies 4 . By shaping public opinion, this is in turn can influence political choices to the detriment of the political life in the Member States and the Union as a whole. 

As noted by the Organisation for Economic Co-operation and Development (“OECD”), “influence and lobbying by foreign interests can have a transformative impact on the political life of a country, not only on domestic policies but also on its foreign policy, its election system, economic interests and its ability to protect its national interests and national security” 5 . Foreign governments can make use of public resources to carry out wide-ranging and sustained influence campaigns. The risks involved in lobbying and influence activities by foreign government are therefore higher than the risks posed by purely domestic activities 6 .

There is also a lack of information about interest representation carried out on behalf of third countries in the internal market. Member States do not consistently collect or systematically share information on such interest representation. This makes it difficult to identify and map interest representation activities carried out on behalf of third countries in the Member States and do so in a coordinated and efficient way across the Union. In addition, the lack of transparency regarding the funding of certain interest representation activities does not allow citizens and policymakers to identify sources of such funding. This lack of information is another factor that could lead Member States to respond to this phenomenon in different ways. There is a public interest in such information, both as an objective of the national legislation regulating interest representation activities already mentioned, but also of interested actors and citizens more generally seeking to understand how public decisions are influenced.

This lack of information and the resulting obstruction of effective oversight not only acts to the detriment of the functioning of the internal market but also of democracy in the Union, as it impacts Union citizens’ trust in democratic processes and decision-makers’ and their ability to exercise their rights and responsibilities. A recent Eurobarometer on Citizenship and Democracy showed that about 8 in 10 Europeans consider that foreign interference in Union democratic systems is a serious problem that should be addressed 7 . 84.5% of respondents to the public consultation consider that lobbying or public relations activities remunerated by or controlled by third countries are associated with a high risk of covert foreign interference. The European Parliament 8 and the Council 9  have underlined the importance of addressing the threat to democracy posed by foreign interference. These concerns have intensified since Russia’s war of aggression against Ukraine.

The main aim of this proposal, which complements existing measures at Union level, would be to introduce common transparency and accountability standards in the internal market for interest representation activities carried out on behalf of third countries. By providing common transparency requirements for such activities, the initiative would improve the functioning of the internal market of such activities, creating a level-playing field, reducing compliance costs for entities that seek to carry out interest representation activities on behalf of third countries across borders, and preventing regulatory arbitrage. A core element of the proposal is the establishment of national registers for entities carrying out such activities.

By providing for full harmonisation, the proposed Directive would provide for proportionate harmonised transparency requirements and a comprehensive system of safeguards, including effective judicial review, a harmonised sanction regime limited to administrative fines, independent supervisory authorities, obligations to prevent stigmatisation, and in particular the need to ensure that no adverse consequences arise from being subject to the transparency rules. This will effectively prevent gold-plating and stigmatisation. Member States would, within the framework of the harmonised rules, be prohibited from diverging from the rules by laying down more extensive transparency requirements.

This intervention would also aim to enhance the integrity of, and public trust in, the Union’s and Member States’ democratic institutions by ensuring the transparency of interest representation activities carried out on behalf of third countries, and by improving the knowledge of the magnitude, trends and actors behind such activities. Furthermore, a coherent and proportionate Union approach focusing on transparency and democratic accountability to address the challenges posed by interest representation on behalf of third country entities could serve to set standards globally. In comparison, the current fragmented approach by Member States is more likely to be damaging to the Union’s reputation, as it lacks a consistent and coherent approach.

Action at Union level is needed to prevent the emergence of new obstacles and to ensure the proper functioning of the internal market of interest representation activities carried out on behalf of third countries. Without Union action, Member States will address the identified risks to democracy unilaterally, risking undermining the internal market of interest representation carried out on behalf of third countries. Approximation of the legislation of the Member States is therefore the primary purpose of this initiative.

This proposal puts forward specific and targeted measures in a proportionate manner, seeking to ensure that entities carrying out interest representation activities on behalf of third countries in the internal market are able to do so in a harmonised, transparent and more predictable legal environment, benefitting the entities involved, the decision-makers targeted, and citizens. Strong safeguards prevent potential negative impacts on the entities concerned, ensuring full respect for fundamental rights and democratic principles and values. The proposal does not cover entities which receive financial support from other Member States, or from third country entities for purposes unrelated to interest representation.

This approach differs radically from those observed in certain other jurisdictions (characterised as ‘foreign agent’ laws) 10 . Such laws often include measures that unduly restrict civic space by stigmatising, intimidating and curtailing the activities of certain civil society organisations (CSOs), journalists or human rights defenders. The label of ‘foreign agent’ under such laws frequently seeks to undermine both the financial stability and credibility of the organisations targeted.

In contrast to such ‘foreign agent laws’, this proposal does not negatively label the activities of specific entities, including CSOs, nor does it seek to limit civic space. Instead, it provides for transparency and accountability requirements applicable to all entities carrying out interest representation activities on behalf of third countries, regardless of their legal status. Furthermore, the measures do not ban any type of activity or require transparency of foreign funding that is unrelated to interest representation activities carried out on behalf of third countries. Finally, the proposal includes safeguards aimed at ensuring a proportionate transposition and enforcement and avoiding risks of stigmatisation.