Foreign Compliance Obligations
The University of Adelaide is committed to supporting the Australian Government’s national security agenda by giving foreign compliance obligations priority consideration before proceeding with any international engagement.
In some cases, notification requirements will add a layer of complexity to some carefully planned university activities, but the unequivocal message from Government is that the context in which these activities are conducted has fundamentally changed. The Foreign engagement compliance overview explains more about these changes and how they impact on the University.
The information below is intended to assist University personnel to understand key foreign compliance obligations which may impact on University activities. For an at-a-glance summary of these obligations, see Foreign compliance obligations "In-Brief".
Foreign Arrangements Scheme
Starting from 10 March 2021, Australian State and Territory entities, including public universities, must notify the Minister for Foreign Affairs of any written arrangements made with foreign governments or entities, under the Foreign Arrangements Scheme.
The Scheme is established by the Australia’s Foreign Relations (State and Territory Arrangements) Act 2020 (Cth).
Some key things to note
- A foreign entity is a foreign government or a related public institution, including a tertiary education institution located in a foreign country that does not have institutional autonomy because it is subject to substantial control by a foreign government or political party.
- Indicators of government control may be evident in the laws of the foreign country; the institution’s governance arrangements; laws or rules that require academics to conform to specific political ideas in their teaching and research.
- An obligation to notify applies to any written arrangement, whether legally binding or not, and may include contracts and MOUs or formal proposals set out in emails.
- Once an arrangement has been lodged, any variation to that arrangement or any subsidiary arrangements made (including when different parties are involved) must be added to the notification.
- The Minister has authority to declare invalid an arrangement considered to be contrary to Australia’s foreign policy or national interest.
- Failure to notify an arrangement may result in the arrangement being declared invalid under Australian law.
If notification is required, seek advice from Legal and Risk Branch about including additional clauses in contracts.
The implementation of the Foreign Arrangements Scheme is being conducted in two stages:
- Commencing 10 March 2021, all new foreign arrangements must be notified. A 14-day notification deadline applies once an arrangement has been finalised.
- Before 10 June 2021, all pre-existing arrangements, made before the Scheme commenced, must be notified. All existing foreign arrangements will need to be assessed against the criteria as soon as possible and necessary lodgements made prior to the deadline.
By meeting its obligations under the Foreign Arrangements Scheme, the University is able to:
- Demonstrate its support of the Government's national security agenda;
- Protect the University's reputation; and
- Maintain the confidence and support of partner organisations.
Foreign Influence Transparency Scheme
The Foreign Influence Transparency Scheme applies to anyone acting on behalf of a foreign government or its agent where that activity is for the primary purpose of influencing political or government outcomes.
Under the scheme, a person who enters into an arrangement with a foreign government, or an agent of that government, for the sole purpose of influencing government activity in Australia is required to register the relationship and the nature of the activity with the Commonwealth Government.
The Foreign Influence Transparency Scheme commenced on Monday, 10 December 2018.
Most academic activity is not conducted on behalf of a foreign government for the sole purpose of influencing Australian governments. Definitions adopted in the legislation were expressly drafted to ensure most academic work is excluded.
However, academics in faculties such as Arts and Professions where academic commentary on politics and government is more likely should carefully assess whether their collaborative or consultancy work could be characterised as primarily intended to influence Australian governments. Seek further advice from the Legal and Risk Branch if you think the following circumstances may apply to any academic activity you are aware of:
- An academic involved is based in an overseas university or other research institution which is publicly funded and which is subject to a high degree of direct government control over its function and operations.
- The publisher of your academic work is based in a university which is both publicly funded and subject to a high degree of direct government control.
- You are engaged by an overseas agent with connections to a foreign government about a consultancy seeking your expert strategic advice on future Australian policy directions in an area you are frequently asked to make public comment and formal submissions about.
In these circumstances, it may be prudent to register rather than deal with the potential consequences.
Penalties of up to 5 years imprisonment may apply to individuals who fail to register under the provisions of the Foreign Influence Transparency Scheme Act 2018 (Cth) or to individuals who ignore the obligation of others when the nature of the activities are known to them. For example, academic supervisors of research students or business partnership specialists.
The university has prepared a checklist and website to help you assess whether a particular activity should be registered under the Scheme. A range of fact sheets are also available on the Attorney-General's Department website that, together, provide a comprehensive overview of the requirements.
The following Rules are made under the Act and give detail about the operation of the Scheme:
- Foreign Influence Transparency Scheme Rules 2018
- Foreign Influence Transparency Scheme (Disclosure in Communications Activity) Rules 2018
Global engagement and collaboration can generate many benefits when it is done for a transparent purpose. When it is courted by a foreign government with the intention of subverting Australian national interests, it presents a risk to the institutions of Australian democracy. Protect your academic reputation and freedom by considering whether your international relationships could pose such a risk and should be declared.
"Foreign interference occurs when activities are carried out by, or on behalf of a foreign actor, which are coercive, covert, deceptive or corrupting and are contrary to Australia’s sovereignty, values and national interests" - Guidelines to Counter Foreign Interference in the Australian University Sector, p.6
Activities which threaten Australia’s national interest can be unexpected: like unauthorised foreign access to University IT systems (cyber-hacking) or to original research findings (theft of intellectual property).
The potential for such threats can be actively anticipated, however, and preventative measures should be always be put in place.
With commerce and communication systems operating on a global scale, university teaching and research activities increasingly involve collaboration with foreign nationals. The University’s routine development of intellectual property and engagement with strategic and defence research partners present potential incentives for foreign nationals with ulterior motives.
As the University’s international reach and engagement expands, the potential risks as well as the opportunities this brings must be actively managed. Australian universities are expected to ensure that the broad benefits to Australia derived from international collaborations and recruitment are balanced against the potential for foreign interference to be enabled through these relationships.
Guidelines to Counter Foreign Interference in the Australian University Sector were mutually adopted in November 2019. The premise of the Guidelines is that everyone involved with universities has a role to play in protecting Australia’s national interest and those with international connections should apply particular vigilance, including:
- Due diligence
- check out your international partner before you commit
- assess any potential risks to your intellectual property
- ensure that collaborative agreements are reviewed and give robust protection to your, the University’s and Australia’s interests
- Education and awareness strategies
- cultivate a security culture with your colleagues
- seek advice and training that is appropriate for your level of exposure to foreign nationals or entities
- Cyber security
- be aware and apply the protective strategies recommended
- seek advice from others, including IT support, and share concerns about vulnerabilities
You should also be aware that failure to prevent foreign interference can be an offence under Australian law.
The National Security Legislation Amendment (Espionage and Foreign Interference) Act 2018 expanded the types of behaviour that constitute espionage and increased the Commonwealth government’s legal capacity to prosecute Australians who engage in covert and deceptive conduct on behalf of a foreign principal. The concept of recklessness can also apply. If it is evident that someone was aware of a substantial risk to national security but nonetheless failed to act to control that risk, that person may face up to 20 years imprisonment.
The amendments, made to the Criminal Code Act 1995, established a new offence for theft of trade secrets for the benefit of a foreign government. Any Australian citizen or permanent resident involved in such an offence, or other offences against the national interest such as treason, espionage, sabotage or acts of treachery, may be subject to imprisonment for a period ranging from 10 years to life.
By being aware of foreign interference risks, properly managing those risks, and applying appropriate security to sensitive information and knowledge, you can reduce the risk that such information might be used to advantage a foreign nation rather than Australia.
It will also protect you and the University against the substantial consequences that could follow, including potential prison sentences for any Australian citizen or permanent resident who is found to have failed to act to defend the national interest.
- Due diligence
Facilitation Payments and Bribery
Facilitation payments are unofficial payments offered to public officials to secure an administrative outcome or speed up a routine government activity. In some countries, such payments are asserted as customary or as normal business practice. A modest payment by Australian standards may be considered very differently by your host nation, however. The reality is that such payments cannot be justified and are illegal. They are bribes.
This is not a routine cost of doing business and most OECD countries have banned such payments. Many jurisdictions, including Australia, have introduced laws to make it clear that such payments constitute bribery and are a crime.
Regardless of where this activity occurs, an Australian may be prosecuted under section 70.2 of the Criminal Code Act 1995 (Cth) if they 'provide or offer to someone (directly or indirectly) a benefit that is not legitimately due to that person, with the intention of influencing a foreign public official in the exercise of their duties, in order to obtain or retain a business advantage. Prosecutors do not have to prove intent to bribe or that a successful business outcome ensued.
Division 490 of the Criminal Code also makes it an offence to intentionally or recklessly falsify accounting documents to conceal bribery. This means that any person or organisation concealing bribes or facilitation payments by falsifying financial records, on purpose or through indifference to irregularities in organisational accounting practices, could be prosecuted.
Any activity that could be construed as bribery under these provisions would be subject to penalties, including significant fines and up to 10 years in prison.
Facilitation payments damage communities and economies by distorting government procedures and undermining transparency in business practices to the advantage of a few corrupt individuals. Facilitation payments should never be made. Irregularities in financial accounts should not be ignored. Report any requests for facilitation payments or evidence of falsified accounts to your Head of School or Branch.
Employees of Australian universities are subject to the Australian law regardless of the jurisdiction in which a facilitation payment is made. If you give a bribe to a public official or if you ignore irregularities in financial accounting records intended to conceal a bribe you risk investigation by the Australian Federal Police and criminal charges that can lead to imprisonment.
Defence Trade Controls
Researchers in universities must exercise caution where their experimental discoveries or the improved application of technology fit within categories on the Defence and Strategic Goods List.
Some goods and technologies are controlled and cannot be exported or transferred overseas without a permit issued by the Commonwealth Government. This includes the trade in traditional military goods, such as weaponry, but also componentry or technologies that have a dual use, such as sensing or measurement technologies.
This regulatory regime enforces international multilateral agreements about the safe trade in goods and technologies that have strategic or military use. Under these agreements, Australia adopts protocols to ensure transparency in the international transfer of listed goods and technologies with the aim of reducing the risk that they will be used by the wrong people for the wrong reason. These agreements are given force in Australia under the Customs Act 1901 (Cth) and the Defence Trade Controls Act 2012 (Cth).
The export from Australia of listed goods and technologies is strictly controlled and a permit required. Because of the global risk, the concept of export is broadly defined and can include the transmission overseas of controlled information such as design plans or software. Even emailing or carrying documents overseas containing restricted technical data without a permit can breach these laws.
It is important that you protect yourself against any breach of the Defence Trade Controls Act. Penalties of up to 10 years in prison and/or up to $525k apply to individuals.
The best strategy is to apply for a permit and be told by the Defence Export Controls Office that you don’t need one.
Contact the Office of Research Ethics Compliance and Integrity for advice and assistance with this process.
The University supports academic researchers to meet their obligations under the Act, but it is ultimately the responsibility and liability of each academic to understand the potential strategic defence risks that may attach to their research and to seek assistance in managing this risk by arranging for a permit to be issued.
Sanctions laws can impact on a broad range of university activities, including student enrolments, higher degree research projects, academic or commercial collaborations and staff recruitment. General awareness of the scope and purpose of international sanctions is important where activity may have an international connection.
Sanctions are used by governments as a form of economic or diplomatic restriction to signal and potentially curb objectionable actions of other nation states, entities or people. They are a key pillar in Australia’s diplomatic efforts to promote transparent government, the recognition of human rights across the globe and to prevent co-ordinated terrorism.
Sanctions impose restrictions on certain activities such as trade in goods and services (including research, education, training or intellectual property), financial transactions or travel. The scope of the restriction will vary depending on the nature of the behaviour being sanctioned. This means that it can be difficult to identify the “who, what and how” as it applies in any given context.
To assist, the Department of Foreign Affairs and Trade (DFAT) provides a searchable database called the Consolidated List which contains all persons and entities who are subject to targeted financial sanctions or travel bans under sanctions laws. DFAT also publishes details of the current Sanctions Regimes (listing countries, entities and the sanctions applied).
Contact the relevant administrative area, or Legal and Risk Branch, for more information if you are concerned that a sanction may apply to a person, activity or project.
An individual who breaches a sanction can face up to 10 years in prison and/or a fine the greater of $500k or three times the value of the transaction involved. The University could also be subject to a fine of $2M+ even where the failure to consider the impact of a sanction on their activity was solely that of an individual member of staff.
Sanctions can affect a broad range of University activities and the level of vigilance applied to manage this risk should reflect the level of international engagement activity. In particular, where the engagement is new or changing, you should refer to the DFAT website for details about the governing regimes and geopolitical features. Check whether any of the entities and individuals involved are on the Consolidated List.