What changed between these versions
A substantive expansion of prohibitions and enforcement. v2 introduces a direct prohibition on foreign states and sovereign wealth funds providing or receiving monetary support for litigation, adding new enforcement mechanisms like dismissal with prejudice. It also broadens disclosure requirements to cover direct monetary support, not just contingent agreements, and refines the definition of sovereign wealth funds.
Overview
A handful of significant changes are introduced across the core operative sections of the bill. · v2 significantly expands the scope of prohibited activities related to foreign third-party litigation funding, strengthens enforcement mechanisms, and broadens disclosure obligations, representing a meaningful tightening of regulations.
The most significant change in v2 is the introduction of a direct prohibition against foreign states and sovereign wealth funds providing or receiving monetary support for civil actions in which they are not named parties, a substantial expansion beyond v1's focus on contingent payment agreements. Complementing this, v2 adds powerful new enforcement mechanisms, including dismissal with prejudice for non-compliant civil actions and the ability to relieve final judgments. Additionally, disclosure requirements are broadened to encompass direct monetary support, and the definition of 'sovereign wealth fund' is refined, while the bill's reporting and applicability sections remain largely consistent.
Major additions
v2 adds a new, direct prohibition making it unlawful for any foreign state or sovereign wealth fund to provide monetary support, either directly or indirectly, for initiating or litigating a civil action in which it is not a named party. It also makes it unlawful for any party or counsel to receive such support from these entities.
This addition fundamentally expands the scope of prohibited activities. While v1 prohibited entering into contingent payment agreements sourced from foreign states or sovereign wealth funds, v2 now directly bans the provision and receipt of any monetary support from these entities for litigation where they are not a named party, regardless of whether it's a contingent agreement. This significantly restricts foreign state and sovereign wealth fund involvement in U.S. litigation.
v2 introduces a new enforcement mechanism stating that any civil action in which monetary support in violation of subsection (a) has been or is being used by a plaintiff to litigate the civil action shall be dismissed with prejudice and subject to terms the court considers proper.
This addition provides a severe and direct consequence for non-compliance with the funding prohibitions. The threat of dismissal with prejudice creates a strong deterrent against using prohibited foreign funding, significantly strengthening the bill's enforcement capabilities and potentially impacting the viability of civil actions found to be in violation.
v2 adds another enforcement mechanism allowing any final judgment entered in a civil action, where monetary support in violation of subsection (a) was used, to be subject to being relieved on motion made pursuant to Rule 60(b)(3) of the Federal Rules of Civil Procedure.
This provision introduces a post-judgment enforcement tool, enabling the reopening of cases where prohibited foreign funding was later discovered to have influenced the outcome. This adds another layer of accountability and deterrence, ensuring that even successful litigation funded in violation of the Act can be challenged, thereby increasing the risk for parties using such funding.
v2 expands the disclosure requirements to mandate the disclosure of the name, address, and citizenship of any foreign person, foreign state, or sovereign wealth fund that has provided or agreed to provide direct or indirect monetary support for initiating or litigating the civil action.
This significantly broadens the scope of information that must be disclosed. While v1 focused on entities with contingent payment rights, v2 now requires disclosure of any entity providing direct or indirect monetary support, regardless of whether they have a contingent right. This increases transparency regarding all forms of foreign financial involvement in litigation, making it harder for foreign entities to fund litigation without public knowledge.
Deletions
The phrase 'of 2025' was removed from the short title, changing it from 'Protecting Our Courts from Foreign Manipulation Act of 2025' to 'Protecting Our Courts from Foreign Manipulation Act'.
This is a minor, cosmetic change that removes the specific year from the Act's official name. It does not alter the operative provisions or the substance of the bill.
The definition of 'sovereign wealth fund' in v1 included 'an agent of a foreign principal (as defined in section 1 of the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611))'. This clause has been removed in v2.
The deletion of this clause narrows the scope of entities that would be classified as a 'sovereign wealth fund' under the Act. This means that investment funds owned or controlled by agents of a foreign principal, as defined by FARA, would no longer automatically fall under the 'sovereign wealth fund' designation, potentially allowing such entities to engage in activities otherwise prohibited for sovereign wealth funds. This could reduce the number of entities subject to the bill's prohibitions and disclosure requirements.
Modifications
This modification is primarily a semantic clarification, aligning the language with the concept of 'proceeds' which is often the basis for contingent payments. It does not substantially alter the operative impact of the prohibition, which continues to prevent contingent payment agreements sourced from foreign states or sovereign wealth funds.
Before
v1 made it unlawful for a party or counsel to enter into an agreement creating a right for anyone, other than named parties or counsel, to receive contingent payment based on the outcome of a civil action or portfolio, if the money was sourced from a foreign state or sovereign wealth fund.
After
v2 rephrases this prohibition, making it unlawful for any party or counsel to enter into an agreement creating a right for anyone, other than named parties or counsel, to receive contingent payment based on proceeds from the action or from any matter within a portfolio, if the money is sourced from a foreign state or sovereign wealth fund.
The addition of 'directly or indirectly' broadens the scope of ownership or control that qualifies an investment fund as a sovereign wealth fund, potentially capturing more entities under the definition if their control is not direct. Conversely, the deletion of 'an agent of a foreign principal' narrows the definition by excluding a specific category of entities previously covered. The net effect on the total number of entities classified as sovereign wealth funds could be complex, but it clarifies that indirect control is sufficient while removing FARA agents as a distinct category.
Before
v1 defined 'sovereign wealth fund' as an investment fund owned or controlled by a foreign state, an agency or instrumentality of a foreign state, or an agent of a foreign principal.
After
v2 defines 'sovereign wealth fund' as an investment fund owned or controlled, directly or indirectly, by a foreign state or an agency or instrumentality of a foreign state.
This modification increases the transparency requirements by mandating the production of a broader range of documents. Parties are now required to provide documentation related to direct monetary support, not just contingent agreements, which provides a more comprehensive view of foreign financial involvement in litigation and enhances oversight by the court and government agencies.
Before
v1 required the production of 'a copy of any agreement creating a contingent right' to the court, parties, Attorney General, and Principal Deputy Assistant Attorney General for National Security.
After
v2 requires the production of 'a copy of any documentation concerning monetary support described in subparagraph (A)(i)(I) or any agreement creating a contingent right described in subclause (II) or (III) of subparagraph (A)(i)'.
This modification ensures that disclosures are made earlier in the litigation process if direct monetary support is provided before a formal agreement is executed or the civil action is filed. This accelerates transparency, allowing the court and other parties to be aware of foreign funding sources sooner, which can impact strategic decisions and oversight from the outset of the case.
Before
v1 required disclosure and certification not later than 30 days after execution of any agreement or the date the civil action is filed.
After
v2 requires disclosure and certification not later than 30 days after the date on which any monetary support required to be disclosed is initially provided, or any agreement described in the disclosure section is executed, or the date the civil action is filed.
Scope
Meaningful expansion or narrowing — Changes are concentrated within the newly added section 1660 of title 28, United States Code, which is the core of the bill. While the changes are not scattered throughout the entire bill, they are extensive within this critical section. — v2 represents a meaningful change in policy direction by moving from primarily regulating contingent funding agreements to directly prohibiting foreign state and sovereign wealth fund monetary support for litigation where they are not named parties. The addition of strong enforcement mechanisms further shifts the policy towards stricter control and deterrence. — The changes primarily interact with and expand the scope of the new section 1660 itself. The new prohibitions and enforcement mechanisms directly build upon and strengthen the regulatory framework established in v1, particularly concerning the definition of sovereign wealth funds and the types of foreign funding subject to oversight.
Impact analysis
Foreign states and sovereign wealth funds
Lose something; they face significantly increased restrictions and prohibitions on their involvement in U.S. civil litigation.
These entities are now directly prohibited from providing any monetary support for civil actions in which they are not named parties, and parties/counsel are prohibited from receiving such support. This is a significant expansion from v1's focus on contingent payment agreements.
Parties and counsel in civil actions receiving foreign funding
Lose something; they face increased legal risks, potential dismissal of their cases, and stricter compliance burdens.
They are now prohibited from receiving any direct or indirect monetary support from foreign states or sovereign wealth funds if those entities are not named parties. Additionally, civil actions found to be using such prohibited funding are subject to dismissal with prejudice, and final judgments can be relieved.
Entities previously classified as 'agents of a foreign principal' under FARA, who might also be investment funds owned or controlled by a foreign state
Gain something; they are potentially relieved from certain restrictions previously imposed by the 'sovereign wealth fund' classification.
These specific entities are no longer explicitly included in the definition of 'sovereign wealth fund' under v2.
Investment funds with indirect ownership or control by a foreign state or agency/instrumentality of a foreign state
Lose something; they are more clearly subject to the restrictions and disclosure requirements of the bill.
The definition of 'sovereign wealth fund' now explicitly includes funds owned or controlled 'directly or indirectly' by a foreign state or its agency/instrumentality.
Parties and counsel in civil actions receiving any direct or indirect monetary support from foreign persons, foreign states, or sovereign wealth funds
Experience a procedural change; they face increased disclosure obligations and earlier reporting deadlines.
Disclosure requirements are expanded to include any entity that has provided or agreed to provide direct or indirect monetary support for litigation, not just those with contingent payment rights. The timing for disclosure is also triggered earlier if monetary support is provided.