The US Department of Agriculture has released a proposed rule updating the Agricultural Foreign Investment Disclosure Act, signalling a clear shift toward stricter enforcement.
The proposal, published on June 25, would eliminate the USDA’s longstanding discretion to reduce civil penalties for foreign investors who file AFIDA reports late or fail to file them altogether.
Historically, AFIDA filers could benefit from downward adjustments to penalties based on the method of discovery, extenuating circumstances, and the nature of information that was misstated or not reported.
That flexibility would now be removed entirely under the proposed changes, sending a strong signal that the federal government intends to hold foreign landowners to a higher standard of compliance.
Failure to file an accurate and timely AFIDA report can result in a penalty of up to 25% of the fair market value of the agricultural land in question, with penalties often running into the millions or tens of millions of dollars.
The proposed rule also introduces three separate penalty schemes for late reports depending on whether the filing involves an acquisition, a transfer or inheritance, or a newly reportable holding, and would increase the rate at which penalties accrue.
Foreign investors designated as a Foreign Adversary or Foreign Adversary Controlled Entity would face even steeper penalties under the new framework.
Any US entity with an ultimate foreign parent that owns or leases agricultural land must report holdings and transactions to the USDA within 90 days of each acquisition or disposition, with the ownership threshold set at just ten percent or more.
The USDA’s proposed rule changes arrive alongside parallel legislative momentum, with the US Senate releasing its draft 2026 Farm Bill, known as the Agricultural Act of 2026, on June 23.
The 900-page Senate proposal follows the House of Representatives’ April 2026 vote to pass the Farm, Food, and National Security Act of 2026, and the two bills share broadly similar approaches to strengthening AFIDA oversight.
The Agricultural Act of 2026 would expand AFIDA reporting requirements to include security interests and would lift the existing cap on penalties for untimely filings, setting a minimum civil penalty of 15% of fair market value.
The Senate bill would also codify the Consolidated Appropriations Act of 2023 direction to establish an electronic filing process and disclosure database, and would direct the USDA to make the relevant data publicly available.
Additional provisions would allow the Secretary of Agriculture to use funds collected from penalties to finance AFIDA enforcement, while strengthening outreach and training efforts for USDA staff at both state and county level.
The bill would further require annual reports to Congress on AFIDA data, foreign influence in agriculture, and an assessment of the Committee on Foreign Investment in the United States referral capacity.
For foreign-owned agribusinesses, investors and companies with US agricultural land interests, the combined pressure of the proposed rule and the advancing legislation makes proactive compliance review increasingly urgent.
Comments on the USDA’s proposed rule are due no later than August 10, giving affected entities a limited window to engage with the regulatory process before enforcement expectations harden further.