LawFlash

US Department of Agriculture Proposes Changes to AFIDA Rules and Enforcement

23 juillet 2026

The US Department of Agriculture’s recently proposed rule would significantly revise the requirements imposed by the Agricultural Foreign Investment Disclosure Act of 1978, including by expanding the act’s reporting and disclosure requirements, broadening the types of agricultural land and foreign ownership interests subject to reporting, strengthening civil penalties for noncompliance, and modernizing administration of the program through mandatory electronic reporting. Comments on the proposed rule are due by August 10, 2026.

KEY TAKEAWAYS

As the proposed rule would expand reporting obligations and increase USDA’s enforcement measures, current and potential foreign investors should review and update AFIDA compliance procedures to ensure they have processes in place to identify reportable transactions and track changes in ownership interests.
Foreign investors acquiring, transferring, or restructuring interests in US agricultural land should evaluate AFIDA reporting requirements early in the transaction process, as the proposed rule signals heightened scrutiny and enforcement.
Parties that identify historical reporting deficiencies should consider addressing them proactively before the proposed rule goes into effect, as the proposed rule suggests a more robust enforcement environment and the opportunity for voluntary disclosure may not remain as favorable.
Comments are due August 10. Investors and owners of agricultural land who have specific perspectives can file comments to seek to influence the contours of the proposed rule.

The proposed rule would make several significant substantive changes to the current AFIDA framework, particularly with respect to enforcement, reporting obligations, and the scope of covered transactions.

Elimination of USDA’s Enforcement Discretion

Among its most significant changes is the elimination of USDA’s enforcement discretion.

Under the current framework, the USDA has discretion to reduce or eliminate civil penalties based on mitigating factors. The proposed rule removes this discretion and increases civil penalties. If implemented, penalties will be dependent upon several factors, including whether the report is an acquisition/holding, transfer/inheritance, or a newly reportable holding.

Expansion of AFIDA Reporting

The proposed rule also significantly expands AFIDA reporting by narrowing the existing exemption for leases. Under the current regulations, leases of less than 10 years are generally exempt from AFIDA reporting. The proposed rule would reduce that exemption to leases of less than one year for most foreign persons. For “Foreign Adversaries” and “Foreign Adversary Controlled Entities,” the exemption would be eliminated entirely, making all leases reportable regardless of duration.

The proposed rule defines “Foreign Adversaries” to include any foreign government or foreign nongovernment person, citizen, and controlled entity headquartered in a “foreign country of concern,” which includes China, North Korea, Russia, Iran, and any other country designated by the Secretary of State. “Foreign Adversary Controlled Entity” is defined to include entities owned by, controlled by, or subject to the jurisdiction or direction of a Foreign Adversary.

The proposed rule also significantly broadens the existing definition of “Agricultural Land” through replacement of the current Standard Industrial Classification (SIC) codes with the 2022 North American Industry Classification (NAICS) codes. If implemented, the updated definition, which includes additional agricultural activities and land uses such as certain conservation land, agricultural research, solar and wind generation, and pipeline transportation, would greatly expand the types of land subject to AFIDA reporting.

Lowering the Aggregate Foreign Ownership Threshold

Beyond expanding the scope of covered Agricultural Land, the proposed rule broadens the entities subject to AFIDA reporting by lowering the aggregate foreign ownership threshold from 50% to 10%.

AFIDA currently requires that “any foreign person who acquires, transfers, or holds any interest in United States agricultural land” submit a report to the Secretary of Agriculture within 90 days of the transaction or holding (91 FR 38315).

Under existing regulations, reporting is required where a single foreign person holds a 10% or greater ownership interest or where multiple foreign persons acting in concert collectively hold at least a 10% interest. When multiple foreign persons are not acting in concert, reporting is required only when there is an aggregated foreign ownership interest of 50% or more.

For example, if there are two foreign persons not in concert with each other and each owns 9%, there would be no reporting requirement. However, seven individuals not in concert, each owning 7.5%, does trigger a reporting requirement.

The proposed rule would lower that aggregate threshold from 50% to 10% regardless of whether the foreign persons are acting in concert. Therefore, the same two foreign persons not in concert with each other, owning 9% each, would trigger reporting under the proposed revised AFIDA requirements.

It should be noted that AFIDA defines a “foreign person” more broadly than foreign individuals, foreign governments, and foreign-organized entities. The definition also includes entities organized under the laws of a US state in which foreign individuals, foreign entities, or foreign governments directly or indirectly hold a “significant interest or substantial control.”

Other Updates

Finally, the proposed rule would enhance AFIDA’s requirements for reporting and ownership transparency. In addition to current reporting requirements, the proposed rule would require expanded disclosures, including current acreage, geospatial maps, ownership diagrams, beneficial ownership information, tax identification and passport numbers, and additional identifying information for persons holding significant interests or substantial control.

The table below provides a side-by-side comparison of the current AFIDA regulations and USDA’s principal proposed revisions.

Current	Proposed Changes
Penalty Mitigation USDA has discretion to adjust proposed civil penalties downward for late-filers and those who failed to file. Penalties are subject to downward adjustment based on factors including: Total time the violation existed. Method of discovery of the violation. Extenuating circumstances concerning the violation. Nature of the information misstated or not reported. (See 7 CFR 781.4(b)(3))	Entirely remove § 781.4(b)(3), which outlines USDA’s discretion to reduce civil penalties based on mitigating factors (e.g., time of violation, method of discovery, extenuating circumstances, the nature of the reporting error).
Penalty Structure One penalty scheme for late-filed reports. Current regulations assess “one-tenth of one percent of the fair market value . . . for each week or portion thereof . . . up to a 25 percent maximum.” (See 7 CFR 781.4(b)(1))	Creation of three penalty schemes for late reports depending on whether the report in question is an acquisition/holding, transfer/inheritance, or a newly reportable holding. Penalty schemes for acquisition and transfer/inheritance establish enhanced penalty tracks for Foreign Adversaries and Foreign Adversary Controlled Entities, with lower penalty tracks for other filers. (see “Penalties”)
Penalty Accrual Rate Late reports accrue penalties at 0.1% of fair market value per week (shall not exceed 25%). (See 7 CFR 781.4(b)(1))	Substantially increases potential civil penalty exposure by raising the weekly accrual rate for late-filed reports from 0.1% to 1.5% or 2.5% of fair market value (depending on the filer), while retaining the 25% statutory maximum. (See “Penalties”)
Appeals Parties have 60 days to request review, may submit a written statement or request a hearing, and may pay by check or money order. (See 7 CFR 781.5(b))	Reduces the appeals period to 30 days, removes the hearing process, establishes a new Office of Homeland Security (OHS) appeal process, and requires electronic payment. (See “Appeals”)
Filing Paper Form FSA-153 filed with local Farm Service Agency Office. (See 7 CFR 781.3(a) and 7 CFR 781.3(b))	Requires electronic submission through USDA’s AFIDA Portal. (See “Portal”)
Lease Reporting Leases (leaseholds) of less than 10 years are generally exempt from AFIDA reporting. (See 7 CFR 781.2(c)(2))	Narrows the general lease exemption from leases under 10 years to leases under one year and eliminates the exemption entirely for Foreign Adversaries and Foreign Adversary Controlled Entities. (See “Any Interest”)
Agricultural Land[1] Agricultural Land comprises land in the United States that is: Used for forestry production; or Currently used for, or (if currently idle) last used within the last five years for, farming, ranching, or timber production. (See 7 CFR 781.2(b))	Replaces the 1987 SIC codes with 2022 NAICS codes and expands the definition of Agricultural Land to include additional agricultural activities, conservation land, certain agricultural research, renewable energy uses, pipeline corridors, and related land uses. (See “Definitions”)
Reporting & Disclosure Requirements Reports must include: Foreign person information Interest type Legal description and acreage of the land Purchase price/consideration and land value Transferee information (if applicable) Intended agricultural use Representative information (if applicable) Acquisition/transfer details Acquisition/transfer date (See 7 CFR 781.3(e))	Expands required disclosures to include (see “Revisions to Disclosure Requirements”): Current acreage Geospatial maps Intended land use Tax identification/passport numbers and any other information needed to fully reveal ownership interests Requires foreign persons to update reports within 90 days when specified information changes. (See “Reporting Requirements”)
Ownership Reporting Any foreign person “other than an individual or government” must report “each foreign individual or government holding significant interest or substantial control.” (See 7 CFR 781.3(f))	Expands ownership reporting to include indirect ownership and foreign control by requiring the following for persons holding significant interests or control: Beneficial ownership information Ownership diagrams Aggregate interests by country Additional identifying information (See “Reporting by Foreign Persons”)
Definitions Existing definitions for terms: Agricultural Land Any Interest Foreign Person County Significant Interest of Substantial Control	Revises Existing Definitions Agricultural Land Any Interest Foreign Person Significant Interest/Substantial Control Transfer Adds New Definitions Beneficial Owner Director Foreign Adversary Foreign Adversary Controlled Entity Shell Corporation
Administrative Authority AFIDA administered by the Farm Service Agency. (See 7 CFR 781.1)	Administration transferred to the OHS and regulations moved from part 781 to part 5100. (See “Role of OHS”)

Current

Proposed Changes

Penalty Mitigation

USDA has discretion to adjust proposed civil penalties downward for late-filers and those who failed to file.

Penalties are subject to downward adjustment based on factors including:

Total time the violation existed.
Method of discovery of the violation.
Extenuating circumstances concerning the violation.
Nature of the information misstated or not reported.

(See 7 CFR 781.4(b)(3))

Entirely remove § 781.4(b)(3), which outlines USDA’s discretion to reduce civil penalties based on mitigating factors (e.g., time of violation, method of discovery, extenuating circumstances, the nature of the reporting error).

Penalty Structure

One penalty scheme for late-filed reports. Current regulations assess “one-tenth of one percent of the fair market value . . . for each week or portion thereof . . . up to a 25 percent maximum.”

(See 7 CFR 781.4(b)(1))

Creation of three penalty schemes for late reports depending on whether the report in question is an acquisition/holding, transfer/inheritance, or a newly reportable holding.

Penalty schemes for acquisition and transfer/inheritance establish enhanced penalty tracks for Foreign Adversaries and Foreign Adversary Controlled Entities, with lower penalty tracks for other filers.

(see “Penalties”)

Penalty Accrual Rate

Late reports accrue penalties at 0.1% of fair market value per week (shall not exceed 25%).

(See 7 CFR 781.4(b)(1))

Substantially increases potential civil penalty exposure by raising the weekly accrual rate for late-filed reports from 0.1% to 1.5% or 2.5% of fair market value (depending on the filer), while retaining the 25% statutory maximum.

(See “Penalties”)

Appeals

Parties have 60 days to request review, may submit a written statement or request a hearing, and may pay by check or money order.

(See 7 CFR 781.5(b))

Reduces the appeals period to 30 days, removes the hearing process, establishes a new Office of Homeland Security (OHS) appeal process, and requires electronic payment.

(See “Appeals”)

Filing

Paper Form FSA-153 filed with local Farm Service Agency Office.

(See 7 CFR 781.3(a) and 7 CFR 781.3(b))

Requires electronic submission through USDA’s AFIDA Portal.

(See “Portal”)

Lease Reporting

Leases (leaseholds) of less than 10 years are generally exempt from AFIDA reporting.

(See 7 CFR 781.2(c)(2))

Narrows the general lease exemption from leases under 10 years to leases under one year and eliminates the exemption entirely for Foreign Adversaries and Foreign Adversary Controlled Entities.

(See “Any Interest”)

Agricultural Land[1]

Agricultural Land comprises land in the United States that is:

Used for forestry production; or
Currently used for, or (if currently idle) last used within the last five years for, farming, ranching, or timber production.

(See 7 CFR 781.2(b))

Replaces the 1987 SIC codes with 2022 NAICS codes and expands the definition of Agricultural Land to include additional agricultural activities, conservation land, certain agricultural research, renewable energy uses, pipeline corridors, and related land uses.

(See “Definitions”)

Reporting & Disclosure Requirements

Reports must include:

Foreign person information
Interest type
Legal description and acreage of the land
Purchase price/consideration and land value
Transferee information (if applicable)
Intended agricultural use
Representative information (if applicable)
Acquisition/transfer details
Acquisition/transfer date

(See 7 CFR 781.3(e))

Expands required disclosures to include (see “Revisions to Disclosure Requirements”):

Current acreage
Geospatial maps
Intended land use
Tax identification/passport numbers and any other information needed to fully reveal ownership interests

Requires foreign persons to update reports within 90 days when specified information changes. (See “Reporting Requirements”)

Ownership Reporting

Any foreign person “other than an individual or government” must report “each foreign individual or government holding significant interest or substantial control.”

(See 7 CFR 781.3(f))

Expands ownership reporting to include indirect ownership and foreign control by requiring the following for persons holding significant interests or control: