By Jim McShane, Export Solutions

Proposed Legislation

On March 12, 2019, a new bill was introduced in Congress.  The “Protect Our Universities Act of 2019” has at its purpose the “creation of a task force within the Department of Education to address the threat of foreign government influence and threats to academic research integrity on college campuses, and for other purposes." The goal of the bill is to protect U.S. universities from the theft of sensitive information by foreign nations such as China, Russia, Iran, and North Korea. The Department of Education task force will identify and address vulnerabilities of universities in the protection of research presently controlled by the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).

The proposed legislation, in addition to ITAR and EAR, requires export authorizations for foreign persons to participate in university programs in which export-controlled technical data/technology is utilized and for which there are  requirements for export authorizations for Foreign Persons involved in the programs. Students from China, Russia, Iran, and North Korea would be required to obtain a waiver to participate in sensitive research projects funded by the Department of Defense, Intelligence Community, and Department of Energy. The waivers would be reviewed and granted by the Director of National Intelligence.

The proposed legislation also seeks to block the use of technology developed by companies with a history of illegal acquisition, use, and/or diversion of U.S. sensitive export-controlled data and products in any research projects funded by the U.S. government.

Confucius Institutes

Several recent factors led to the proposal of the “Protect Our Universities Act of 2019”. A Defense Department investigation was initiated in June of 2018 into research partnerships between universities in the U.S. and Chinese owned companies.  In February of 2018, the Permanent Subcommittee on Investigations issued a report that the “Confucius Institutes” on American university campuses should be closed. The Director of the FBI testified before the subcommittee about the intelligence risks posed by Chinese students and scholars at universities in the US.

Confucius Institutes began in 2004 to promote Chinese language and culture. The institutes are funded by Hanban, an agency of the Chinese Ministry of Education. Estimates are that China has spent approximately $158 million on U.S.-based Confucius Institutes. At some locations there are matching funds from the universities and colleges. The Institutes typically offer some combination of Mandarin language classes and cultural programming. Some Institutes even offer a form of outreach (called Confucius Classrooms) in more than 500 K-12 schools and the community more broadly. The Institutes are staffed (in part) with visiting teachers from China who allegedly must then pledge not to violate Chinese laws or engage in activities contrary to China’s national interests.

Criticism began to arise of Chinese state censorship and impingements on academic freedoms. At a Confucius Institute-sponsored conference in Europe in 2014, materials related to Taiwan were censored. In addition, there have been documented incidents where discussions and practices of the Falun Gong religion were banned from classes. These and other concerns led to the American Association of University Professors to issue a report calling for the closure of campus Confucius Institutes.

As of April of 2017, there were 97 Confucius Institutes established on American college and university campuses. Most recently, 10 Confucius Institutes have been closed by colleges and universities over questions on the level of funding (by the Chinese government), curriculums, and security risks to sensitive data and technology.

Other Acts Regarding Confucius Institutes

Though just introduced, “The Protect Our Universities Act of 2019” has already been referred to the Committee on Education and Labor, and, in addition, to the Committees on Intelligence (Permanent Select), Armed Services, and Science, Space, and Technology for review and comment.

The Introduction of the “Protect Our Universities Act of 2019” is just the latest of several actions to be taken by the U.S. government, by NGOs and internationally.

Section 1091 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (passed into law on August 13, 2018) pointedly stated that “none of the funds authorized to be appropriated by this Act or otherwise made available for the Department of Defense may be obligated or expended for Chinese language instruction provided by a Confucius Institute.”

On March 20, 2018, the “Foreign Influence Transparency Act of 2018” was introduced. The Act required that: “organizations, such as the Confucius Institute, to register under the Foreign Agents Registration Act (FARA) if they promote the political agenda of the Chinese government.”

In February of this year, a bi-partisan report by the Homeland Security subcommittee requested that the Justice Department determine if Confucius Institutes are attempting to influence the U.S. government or public on behalf of the Chinese government, and if so the Institutes and those involved in the Institutes should register under the “Foreign Agents Registration Act”. The report went on to request the Department of State review visas of researchers and teachers in all Confucius Institutes and K-12 Confucius classrooms.

On June 28, 2018 the Senate introduced the “Countering the Chinese Government and Communist Party's Political Influence Operations Act.” This Act  requires “greater transparency for Confucius Institutes (Note: specifically named in the Act), think tanks, academic programs, and nongovernmental organizations funded primarily by the Government of China, or by individuals, or public or private organizations with an affiliation to the Government of China that are operating in the United States to register through the “Foreign Agents Registration Act of 1938”.

In other countries, similar actions are also being taken. In Australia, “The Foreign Influence Transparency Scheme” was enacted on December 10, 2018. The Scheme seeks to require greater transparency into the activities of those foreign entities that would attempt to influence Australia’s government and political processes. Anyone who acts on behalf of “foreign government principals” will need to register with the Attorney-General’s Department. The activities of Confucius Institutes in Australia are being reviewed by the federal government, and they have been warned they might be subject to “The Foreign Influence Transparency Scheme” and may be required to register.

Goals of the Act

An underlining goal of the “Protect Our Universities Act of 2019” is the same as these other initiatives: protect our leading-edge sensitive technologies from illegal acquisition and theft. There have been an increasing number of reported incidents of Chinese attempts to illegally acquire U.S. technologies. News articles and blogs written by Export Solutions have highlighted the extent of some of the methodologies utilized by the Chinese. The co-opting of sensitive and export-controlled technology by foreign powers through our institutes for higher learning is not a situation that we can allow to continue, but the remedies are not always the easiest given the fact that, in the U.S., we believe that the legitimate pursuit of learning and education is not meant to be impeded. However, when such pursuits are motivated by interests counter to the security of the U.S., actions need to be (and are) being taken.

Jim McShane is a Sr. Consultant, Trade Compliance for Export Solutions -- a full-service consulting firm specializing in ITAR and EAR regulations.