United States: Department Of Defense Seeks To Combat Undue Foreign Influence In Higher Education Institutions With Funding Restrictions

Key Takeaways:

• Department of Defense ("DoD") released a new policy addressing unwanted foreign influence on DoD-funded fundamental research at higher education institutions.
• Alongside this policy, DoD published a list of foreign entities that have been confirmed to engage in malign activities.
• Though prohibitions under DoD's policy will not go into effect until August 9, 2024, higher education institutions can proactively assess their existing research compliance practices and pen new policies as needed.
• The new DoD policy builds on the Academic Outreach Initiative announced by the Department of Commerce last year aimed at ensuring that academic research institutions are complying with their export control obligations and keeping controlled information secure from unauthorized foreign sources, highlighting the importance for higher education institutions to invest in robust cross-border compliance programs.

DoD recently released a policy addressing unwanted foreign influence on DoD-funded research. According to the policy, DoD will conduct risk-based security reviews and assess potential conflicts of interest and conflicts of commitment for fundamental research proposals.¹ If a security review exposes risks that cannot be mitigated, DoD will not fund the research. Alongside the policy, DoD also released a list of foreign entities that have been confirmed to engage in malign activities. According to DoD, collaboration with a foreign entity on the list increases the risk of research results being misappropriated to the detriment of U.S. national security.

With a new academic year already underway, higher education institutions engaging in fundamental research should carefully note this new development.

This client alert identifies the various factors, listed below, that may not only result in a denial of DoD funding, but may also increase security risks and jeopardize research integrity. Although prohibitions under this policy do not go into effect until August 9, 2024, research institutions are advised to develop or review their existing research compliance practices and create any new policies required to safeguard their research efforts.

Institutions should exercise caution when engaging with entities on the foreign entities list.

Research institutions should review the full list of foreign entities on page 18-20 of DoD's new policy. The foreign entities list includes entities from the People's Republic of China, the Russian Federation, and other countries. Among the listed entities are:

• Academy of Military Medical Sciences;
• Beijing Institute of Technology;
• Moscow Institute of Physics and Technology; and
• Northwestern Polytechnical University.

If a research proposal indicates an association with an entity on this list, DoD will deny funding unless the proposing institution implements mitigation measures.

Institutions should have a policy regarding malign foreign talent recruitment programs.

DoD may also deny funding based on a "covered individual's" affiliation with a foreign talent recruitment program. According to DoD, "covered individuals" are those who are "essential to the successful performance" of the research and listed as key personnel in project proposals, such as principal or co-principal investigators.

A "foreign talent recruitment program" is a program organized by a foreign government to recruit science and technology professionals. DoD distinguishes "foreign talent recruitment programs" from "malign foreign talent recruitment programs" based on the sponsoring entity for the program. A foreign talent recruit program is deemed to be a malign foreign talent recruitment program if it is sponsored by a "foreign country of concern"—i.e., the People's Republic of China, the Democratic People's Republic of Korea, the Russian Federation, and the Islamic Republic of Iran—or sponsored by programs connected to these governments, including Changjiang Scholar Distinguished Professorship, Hundred Talents Plan, Pearl River Talent Program, Project 5-100, River Talents Plan, and Thousand Talents Plan. Additionally, if an entity on the foreign entity list sponsors a foreign talent recruitment program, then that program is also deemed a malign foreign talent recruitment program.

Institutions should take this opportunity to assess whether they have a policy in place addressing malign foreign talent programs. Beginning August 9, 2024, DoD will be prohibited from providing funds to an institution (1) in which a covered individual is participating in a malign foreign talent recruitment program, or (2) that does not have a policy in place addressing malign foreign talent programs, regardless of whether any prohibited affiliation with a malign foreign talent program exists at the institution.

Institutions should screen funds from a foreign country of concern.

DoD discourages a covered individual's receipt of funding from a foreign country of concern or an entity operated by a foreign country of concern. If a covered individual does receive such funding, then DoD will, "to the maximum extent practicable," require mitigation measures. Mitigation strategies include, but are not limited to:

• requiring any covered individuals at research institutions to complete insider risk awareness training;
• mandating increased frequency of reporting;
• allowing DoD to review all contracts and clarify relationships, affiliations, and associations it considers risky;
• replacing individuals deemed a research security risk on the proposal;
• asking covered individuals to resign from positions deemed problematic;
• verifying that a covered individual has a Top Secret clearance with a U.S. government department or agency.

In cases where mitigation is not possible, funding proposals will be rejected.

Institutions should screen for patents filed in a foreign country of concern.

If a patent is not disclosed in a research project proposal, was filed in a foreign country of concern, and funded by the U.S. government, DoD may require mitigation measures.

Next Steps

The new DoD policy builds on the Academic Outreach Initiative announced by the Department of Commerce last year aimed at ensuring that academic research institutions are complying with their export control obligations and keeping controlled information secure from unauthorized foreign sources. These developments signal that U.S. government agencies are closely scrutinizing foreign influence on higher education institutions, making it even more important for higher education institutions to invest in robust cross-border compliance programs.

Higher education institutions should take the time now to review their current research proposals, take stock of their connections and relationships with any foreign partners, and inform their research community regarding DoD's new policy and remind them about the institution's broader cross-border compliance obligations.

Footnote

1. DoD defines fundamental research as "basic and applied research in science and engineering conducted at colleges, universities, and laboratories, the results of which ordinarily are published and shared broadly within the scientific community."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.