Relating to the registration as a lobbyist of persons who engage in certain lobbying activities on behalf of a foreign adversary and to prohibitions on the receipt of compensation related to those lobbying activities; providing a civil penalty.

Contracts

• Master Services Agreements (MSAs): You must amend existing agreements to include a "Change in Law" clause allowing immediate termination without penalty if a client is designated a foreign adversary.
• Representations & Warranties: Insert a mandatory clause requiring clients to certify they are not a "foreign adversary" or "foreign adversary client" as defined by Texas Gov't Code 305.030.
• Indemnification: Expand indemnity clauses to cover legal defense and penalties resulting from a client's misrepresentation of their ownership status.

Hiring/Training

• Client Intake Screening: Integrate the U.S. Secretary of Commerce’s "Foreign Adversary" list (15 C.F.R. Section 791.4) into your Know Your Customer (KYC) or conflict check processes.
• Staff Training: Lobbyists must be trained to identify "foreign adversary" indicators in complex corporate structures (e.g., venture capital backing or board composition) before engaging in communication with officials.

Reporting & Record-Keeping

• Beneficial Ownership Audits: Maintain detailed organizational charts for all clients, tracing ownership back to the ultimate beneficial owner to rule out >20% foreign adversary control.
• Affidavits of Status: Secure signed affidavits from all high-risk clients attesting to their status.
• Fund Segregation: If you provide non-lobbying legal services to a prohibited entity, you must strictly segregate billing and time entries to prove no compensation was applied to legislative or administrative advocacy.

Fees & Costs

• Potential Liability: Violations carry a civil penalty of up to $10,000 per violation, plus full disgorgement of all compensation received for the prohibited activity.
• Insurance Gaps: Review Professional Liability (E&O) policies; most exclude coverage for civil penalties and disgorgement, leaving your firm self-insured for these risks.