Alarm grows over hit to business from UK move on 'foreign influence'

The British government's plans for a public register of "foreign influence" risk severely harming the United Kingdom's reputation as a global investment center, warned lobby groups for the finance, legal and academic sectors.

The planned Foreign Influence Registration Scheme is expected to become law next month as part of the National Security Bill. It would compel those acting for a foreign power or entity to declare political influencing activity, and criminalize those who do not.

Finance and professional services lobby group TheCityUK claimed the scope of the government's plan is too wide and risks becoming a bureaucratic disaster, the Financial Times reported.

The group's members have raised concerns that the proposals would have a deeply negative effect on legitimate interactions between the UK and foreign interests.

In a letter to Minister of State for Security Tom Tugendhat, TheCityUK's chief executive Miles Celic said such a register "risks seriously damaging the UK's financial and related professional services industry, as well as our reputation as one of the world's most attractive jurisdictions for cross-border business, trade and destinations for foreign investment".

Legal analysts said the register, added to the National Security Bill by former home secretary Priti Patel earlier this year, is similar to legislation in the United States and Australia, but "far exceeds "these in its range.

James Palmer, a partner at law firm Herbert Smith Freehills, was cited by the FT as saying in a briefing note to clients that the planned register was "one of the most fundamentally misconceived and ineptly focused that we have ever seen".

Broad impact

He added that, without modification, it would result in "bureaucratizing almost all global engagement with the UK", while criminalizing "an almost uncircumscribed range of individuals, charities, academics, businesses and other organizations".

The government has stated that the overall aim of the register is to "deter foreign power use of covert arrangements, activities and proxies, by requiring greater transparency around certain activities that foreign powers direct, as well as where those activities are directed or carried out by entities established overseas or subject to foreign power control".

Tim Bradshaw, head of the Russell Group of leading UK research universities, was quoted by the FT as saying that the group would seek exemptions where research was already covered by other legislation.

"We are concerned the current proposals will duplicate existing measures and capture many partnerships that are already scrutinized. That kind of duplication drains resources and increases the chance of genuine risks being missed," he said.

A government spokesperson said: "Openness and transparency are vital in a democracy and the government is clear that the Foreign Influence Registration Scheme is a vital step toward tackling covert foreign influence in the UK, in turn supporting the integrity of the City."

jonathan@mail.chinadailyuk.com