Foreign Arrangements Scheme

The Foreign Arrangements Scheme establishes a formal notification process that applies to all Australian public universities. The Scheme is established by the Australia’s Foreign Relations (State and Territory Arrangements) Act 2020 (Cth) (the Act). Public universities are included in the definition of “State/Territory entities” along with all Australian State, Territory and local governments.

The Foreign Arrangements Scheme legislative summary diagram provides an overview of the operation of the Scheme.

Any foreign arrangements in operation or established from 10 December 2020 must be notified under the Scheme.

Global Engagement is authorised to lodge and maintain records of notifications made on behalf of the University.

The purpose of the Act is to protect and manage Australia’s foreign relations. The FAS is the statutory notification and assessment process managed by the Department of Foreign Affairs and Trade (DFAT) to support compliance with the Act.

A foreign arrangement is a written agreement, contract, understanding or undertaking between an Australian State/Territory entity and a foreign entity, whether or not there are any other parties to the arrangement or whether it is legally binding or not. It may include MOUs or formal proposals set out in emails. Types of arrangements include:

• Research collaboration between 2 universities
• Establishing student exchange or mobility programs
• Collaboration between academics on a workshop or conference presentation
• Arranging cultural activities  

Any subsidiary arrangements that are entered into as a consequence of, or for the purpose of implementing, the “head” foreign arrangement must be included in the notification.

A due diligence assessment will help determine whether an arrangement is caught by the Scheme by determining whether it involves a foreign entity.

A foreign entity is defined by the Act to include foreign governments (at all levels) and related public institutions. This would include a tertiary education institution that does not have institutional autonomy because it is subject to substantial control by a foreign government or political party. Indicators of government control of a tertiary education institution 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. Some helpful due diligence resources are available on the About your foreign partner webpage.

A detailed table setting out the legislative criteria for foreign entities is provided in page 2 of the FAS due diligence explainer.

The University must notify the Minister for Foreign Affairs that it: 1. proposes to enter and 2. it has entered into an arrangement with a foreign entity. This means that the University must generally make 2 notifications: 1. When an arrangement is certain but before it has been finalised (e.g., terms are being agreed); and 2. once the arrangement has been finalised (e.g., an agreement has been signed by the parties). An arrangement that has been finalised must be notified within 14 days.

An arrangement between the University and a foreign entity is defined under the Scheme as a “non-core” foreign arrangement. This is different from a “core” foreign arrangement which involves an Australian government entity and a foreign entity. It is possible that the University could be involved in a “core” foreign arrangement if, for example, the SA Government is a party. 

Australian entities involved in multi-party arrangements can agree which entity will make the notification (usually the lead entity). You should seek further advice about the obligations that may apply to multi-party or multi-agreement arrangements.

Global Engagement is authorised to make notifications on behalf of the University. Refer to “What do I need to do?” for more information about the University’s procedures for reviewing and notifying arrangements involving foreign partners

Once lodged by Global Engagement, an arrangement will be formally reviewed by the Department of Foreign Affairs and Trade and then listed on a public register. The Act also authorises the Minister for Foreign Affairs to

• determine whether an arrangement is compatible with Australia’s foreign relations and policy
• declare an arrangement to be invalid and unenforceable or that it must be altered or terminated
• write to the University advising that a declaration has been made
• seek a court injunction to stop the arrangement if an entity fails to notify an arrangement or disregards a formal notice. A Ministerial declaration would mean that the purpose of arrangement cannot be given effect or be held by the parties to be in effect. If the University receives such a declaration, it must take steps to notify the parties involved and cease all activities.

Given the possibility that an arrangement may be disallowed, special contract clauses should be included in relevant agreements. Standard form contracts should include a FAS clause. Should a negative declaration be made, the consequences for any subsidiary (secondary) arrangements that have been made under the auspices of the foreign arrangement will need to be considered. An arrangement is subsidiary to a foreign arrangement if it has been anticipated by, or supports the implementation of, that arrangement.

The purpose of the Scheme is to ensure that certain arrangements with foreign entities do not adversely affect Australia's foreign relations and are not inconsistent with Australia's foreign policy.

Where an assessment indicates the contrary, the Minister for Foreign Affairs may declare an arrangement to be invalid, unenforceable or require it to be alerted or terminated (depending on the nature of the arrangement). A declaration may also be applied to subsidiary arrangements.

The Minister must consider significant consequences of a declaration where it has the potential to adversely affect the functioning of an Australian State or Territory. It is not sufficient that there are consequences for the University alone. Usually this would mean consequences for South Australia, but the University might be involved in an arrangement with another Australian jurisdiction.

Under section 51(2) of the Act, consideration must be given by the Minister if a declaration would:

• Impede activity intended to assist or enhance the functioning of the State or Territory
• Impair the continued existence of the State or Territory as an independent entity
• Significantly curtail or interfere with the capacity of the State or Territory to function as a government
• Have significant financial consequences for the State or Territory
• Impede the acquisition of goods or services by the State or Territory, including, for example, for the purposes of infrastructure
• Have an effect on the capacity of the State or Territory to complete an existing project that is to be delivered under the arrangement (either at all, or within the intended timeframe)

In circumstances where a declaration would have such significant consequences for the State, a written submission should be prepared, noting however, that it may not be taken into account unless that submission has been endorsed by the State. The Minister is only required to take into account information provided by the relevant State or Territory.

Before proceeding, all arrangements involving a foreign partner must be submitted for a compliance review and may require endorsement or approval by senior managers. Make sure that you are familiar with the regulatory obligations by applying  the ‘C, D, E, F' process for foreign compliance. There may be additional details you will need to ask your foreign partner to provide so that a compliance assessment can be completed.

• Compliance: know the regimes 
• Due diligence: know your partner, activity & risks 
• Endorsement: the Foreign Engagement Compliance Review 
• Fruition: bring to Fruition, with a formal agreement if needed 

Refer to the Global Engagement Foreign Compliance website for full details of this step by step compliance process.  

Foreign engagement activities that are supported by central units at the University (e.g. Research Services or Innovation and Commercial Partners) will routinely be assessed for compliance. Any compliance concerns can be directed to contacts in these business areas.

If notification is required, additional FAS clauses should be included in relevant written agreements. Legal and Risk can be contacted for advice.

A Foreign Engagement Compliance Review should be completed for all foreign engagement activities. Any arrangement involving a foreign entity will be referred to Global Engagement as a part of the endorsement phase. Global Engagement will action the notification process if required. 

In all cases, a final assessment and the formal notification via the DFAT portal is managed by Global Engagement and notification details recorded. Each notification is issued with a unique ID number.

Once lodged, each foreign arrangement will be issued a unique foreign arrangement number. Global Engagement will notify you of this number for your records.

Each arrangement is reviewed by DFAT and, once completed, the arrangement will appear on the online public register. Basic information (title and parties involved and commencement date) will be publicly visible. If the Minister makes a declaration, that decision will also be visible. 

Any significant variations to an arrangement must be notified using the same process. This includes providing a notification that an arrangement has been extended or renewed.

For further advice and assistance with FAS, including final assessment of an arrangement for notification, please contact Global Engagement or visit the Global Engagement Foreign Compliance website.