‘Defend Democracy’ package: Commission proposes more transparency of Third Country lobbying - but not for corporate influence
On 12 December, the European Commission proposed mandatory lobby registers in all Member States for lobbyists working on behalf of countries outside the EU and EEA. This would capture lobbying on behalf of Katar, Morocco, Russia, China or the United States. But it would not apply if third country funding is channelled through EU based entities, as happened with Russian funding for Marine Le Pen for example. Undue influence from inside the EU would not become more transparent. The proposal does not contain a strong argument why the EU-Commission does not propose for this register to cover non-state actors and EU based actors as well.
Daniel Freund, Green negotiator on the EU Transparency Register and the EU Ethics Body, comments:
“Qatargate and similar attempts of foreign influence clearly show: we need more lobby transparency. It’s a good sign that the European Commission now made a proposal. There are promising elements to make foreign influence more transparent and have registers to detail their activities. The part that is much less understandable: Why would foreign influence transparency not also cover companies or NGOs from non-EU countries? Limiting the proposed register to only government funded activities creates a big loophole that can easily be exploited by oligarchs from Russia, China and other autocracies. EU citizens deserve transparency on all lobbying activities. That’s what we will suggest as amendments.”
full defense of democracy package: https://commission.europa.eu/publications/defence-democracy_en
Civil Society statement for an ‘Interest Representatives Act’
“We propose replacing the current Directive with an EU Interest Representatives Act to comprehensively address third-country malign interference. This Act would cover all interest service representatives in the Union, addressing internal and external funding. It aims to enhance transparency, accountability, and integrity, by establishing a horizontal and fair framework. Member States’ existing registries should be harmonised or improved, not dismantled.
A decentralised EU-wide register
As a directive, the law would apply to Member States, not create a unified EU register. But each lobby would need to register only once and would be allocated a “European Interest Representation Number” (EIRN) in the structure of EIRN:Countrycode:NationalRegisterCode:LobbyEntityCode. Thereby, each lobby organisation registered under this law would have a single number code for EU wide use. For lobbying in other countries, this code is prescribed to be used as an identifier.
Annual overview about lobbying third countries
Member States have to report annually the lobbying by third countries registered in their registers. The EU Commission generates an annual overview on this basis, which countries paid how much for what.
Safeguards against misuse by autocratic governments
The main fear of Non-Governmental Organisations (NGOs) with this piece of legislation is to be singled out, demonised and legally discriminated against by autocratic governments for funding from outside the EU, e.g. by pro-democracy foundations. This draft law addresses these concerns with a number of measures:
- Only cover interest representation (lobbying) activities by clearly distinguishing them from other activities. Lobbying activities are however defined broadly in Article 2 (1).
- Funding for lobbying is only covered if provided by public authorities of third countries or entities whose action may be attributed to public authorities of third countries. Private funding from third countries is not covered.
- No difference between NGOs and lobbying companies.
- No restrictions for ‘harmful’ activities – all activities are covered equally.
- No discrimination between third countries – lobbying activities on behalf of any country beyond EFTA to be reported.
- Reporting obligation and hence administrative burden is rather limited. First, entities are required to report a list of all third countries on whose behalf they have carried out interest representation activities in the preceding financial year and the aggregated annual amount received from each of them. There is no obligation to report other sources of funding or funding not received for lobbying. Second, ad hoc reporting is possible based in information requests by supervisory authorities. Third, entities are obliged to keep records of key information or material related to the interest representation activity for a period of four years after the end of this activity.
- Authorities must ensure that no adverse consequences result from registration. Independent national supervisory authorities are created that can only establish proportionate administrative fines for non-compliance, but no criminal sanctions.
- A harmonisation clause prohibits Member States from imposing more extensive transparency requirements, which could for example be especially harmful for NGOs. While this could give the Commission a better hook for infringement procedures, it seems easily possible to circumvent by Member States through for example labelling the purpose of such requirements as prevention of money laundering rather than of transparency for lobbying.
Good arguments for this law to apply to all lobbying in the EU
These 4 paragraphs include many arguments, why this law should apply to all lobbying without limits to foreign funding only:
(5) Member States’ measures regulating transparency of interest representation activities
are very divergent, in particular concerning the record-keeping and registration
requirements which apply to entities carrying out interest representation. Some
Member States have established mandatory registers aiming, in particular, at ensuring
transparency. Others have established voluntary registers, whereas some Member
States have no registers for interest representation. There are also considerable
variations regarding the granularity of the information provided for transparency
purposes, including the type of information required, for instance about the interests
represented or about the client. In some Member States information about interest
representation must be updated on a regular basis whereas in others the information
must be updated every time there is a change in the scope of the interest representation
activity carried out.
(6) Such divergences create an uneven playing field and increase compliance costs for
entities seeking to carry out interest representation activities in more than one Member
State, which may deter the development and provision of new interest representation
activities in the internal market. Third countries are likely to seek interest
representation in more than one Member State in order to ensure an overall positive
policy in their favour across the Union. Such conditions negatively impact economic
operators and constitute obstacles to the provision of cross-border interest
representation within the internal market. This uneven playing field also directs cross-
border interest representation activities away from more regulated Member States
towards less regulated ones or where enforcement is limited. Such regulatory arbitrage
also presents an opportunity for third-country actors seeking to evade transparency
(10) By providing harmonised transparency requirements applicable across the internal
market, this Directive aims to establish a coherent and systematic framework to ensure
transparency as regards interest representation activities conducted on behalf of third
countries with the objective of influencing the development, formulation or
implementation of policy or legislation, or public decision-making processes, in the
(11) Providing common transparency and accountability standards and common reporting
standards also support democratic accountability and a better common knowledge of
interest representation activities conducted with the objective of influencing the
development, formulation or implementation of policy or legislation, or public
decision-making processes, in the Union, addressing the need for reliable and
consistent data. The need to ensure transparency of interest representation activities
carried out on behalf of third countries is a legitimate public goal, in the light of the
principles of openness and transparency which must guide the democratic life of the
Union in accordance with the second paragraph of Article 1 and Article 10(3) of the
Treaty on the European Union (‘TEU’), in conformity with the values shared by the
Union and its Member States pursuant to Article 2 TEU, also supporting the exercise
of citizenship rights.
Why would foreign influence transparency not also cover companies or NGOs from non-EU countries?