1. International engagement by Australian public universities

Universities have always operated internationally. Research collaboration, transnational education, offshore campuses, joint institutes, strategic partnerships and student mobility are part of the sector's mission and success.

However, the environment in which those activities occur is changing. Government scrutiny of international university activities continues to increase against a backdrop of heightened geopolitical tensions and growing national security and foreign interference concerns. This is reflected in recent developments relating to Australia's Foreign Arrangements Scheme (FAS), increased focus on foreign interference laws and sanctions compliance and increased attention to defence export controls, research security and sensitive technologies.

For university legal teams, the challenge is ensuring governance frameworks, policies and decision-making processes continue to respond to a more complex regulatory environment and enable informed, risk-based decision-making.

2. The evolving regulatory environment

In recent years, universities have seen growing government scrutiny of international engagement activities through a combination of legislative reform, regulatory guidance and the exercise of statutory powers. For example, powers under the FAS have been exercised in relation to university arrangements, the FAS has recently been amended (with a commencement date yet to be proclaimed as at the date of this article), updated sanctions guidance specifically for the university sector have been issued and powers under the Australian Research Council Act 2001 (Cth) have been exercised to refuse grants (with subsequent guidance in relation to ARC research security also issued).

What the recent updates to, and decisions under, FAS tell us about wider government expectations

Recent reforms to the FAS provide a useful lens through which to understand the changing expectations being placed on universities' international activities. At a very high level, for Australian public universities, some of the relevant reforms include:

• Broadening the FAS' focus to Australia's 'national interest' (rather than 'foreign relations'). According to the explanatory memorandum, this is intended to ensure that foreign arrangements can be considered against all aspects of Australia's national interest, including national and economic security, foreign relations and foreign policy considerations
• Extending the application of the FAS to certain overseas campuses of Australian universities
• Requiring universities to maintain policies and procedures relating to foreign research projects
• Streamlining the institutional autonomy test for foreign entities and changes to notification requirements for non-core arrangements.

The significance of those reforms extends beyond the specific legislative changes. Together with the recent use of powers under the FAS, it reflects an increased expectation that decisions about universities' international engagement will consider carefully risks associated with security, foreign policy and other national interest factors.

What the increased focus on sanctions, export controls and research security means for universities

Government focus on research security, sensitive technologies and Australia's defence export controls regime has also increased. This is reflected in initiatives such as the ARC Research Security Framework and updated Australian Sanctions Office Guidance Note - Sanctions compliance for universities both published earlier this year.

The updated sanctions guide highlights that Australia's sanctions laws can affect a broad range of university activities, including research collaborations, supervision and training, technology transfer and engagement with individuals and entities connected to countries subject to sanctions or designated persons.

Importantly, sanctions laws do not prohibit all collaboration with persons from countries subject to sanctions. Nor do they prevent universities from continuing legitimate international research and education activities. However, they do require universities to understand who they are dealing with, the nature of the activity, the technology involved and the potential end use of information or capabilities being shared in order to appropriately assess the risks involved in an activity. In the present environment, the importance of appropriate due diligence, risk assessment and escalation processes continues to increase.

Defence export controls are also increasingly important for universities working with advanced technologies, dual-use goods and sensitive knowledge transfers. Recent government focus on research security and critical technologies has only increased attention in this area.

The growing relevance of these issues is not limited to traditional defence-related research. Universities should be alert to potential implications in areas such as artificial intelligence, quantum technologies, advanced materials, cybersecurity, biotechnology and other emerging technologies. Dual-use goods and technology require particular attention: an item with an ordinary civil or commercial application may still be controlled because it is also capable of military or weapons use. Additionally, since the 2024 reforms, a permit may be required to supply controlled technology to a foreign national within Australia, meaning that in certain circumstances the controls can be engaged without anything leaving Australia.

More broadly, although not directly related to university activities, recent foreign interference prosecutions and convictions reinforce increasing government focus on these issues. While universities do not appear, at present, to be the primary target of these enforcement activities, they operate in an environment where governments are increasingly focused on protecting national security, critical technologies and Australia's national interest.

Against that backdrop, universities are expected to understand, assess and appropriately manage risks associated with international engagement.

3. What should university legal teams focus on now?

In practice, university legal teams increasingly encounter international engagement activities that engage several regulatory frameworks at once. For example, a foreign research collaboration can commonly raise sanctions, export control and research security considerations. Historically, researcher-to-researcher collaborations were often viewed primarily through those lenses. However, recent amendments to the FAS once commenced will introduce new requirements relating to foreign research projects, reinforcing expectations that universities maintain appropriate visibility, governance and oversight of certain international research activities.

A transnational education arrangement will often engage foreign arrangements requirements, governance considerations and higher education regulatory obligations. Depending on the scope, subject matter of the courses and countries or persons involved, it may also involve foreign interference, sanctions, export control and/or national security considerations.

As international engagement is expected to remain critical to Australia's university sector, the key question becomes how universities can continue to collaborate internationally in a way that is consistent with an increasingly complex regulatory and geopolitical environment.

The different frameworks require universities to ask similar questions in relation to each international engagement about the nature of proposed international activities, the counterparties involved, the information, technology or resources that may be shared and the risks that arise (including national interest, security or reputational risks). This is not new. What has changed is the context, sensitivities and risks around those matters. Arrangements that were previously assessed, notified and accepted in a different geopolitical context may now be viewed differently.

For many universities the frameworks themselves are not the issue. The question is whether the processes built around them will be sufficient to identify emerging risks and concerns in a fast-changing context and environment.

Looking ahead, universities should consider whether existing compliance and governance frameworks, processes and policies support the following in the current increasingly complex geopolitical and regulatory environment:

• Identifying international activities that warrant further assessment
• Escalating higher-risk matters to appropriate decision-makers
• Obtaining specialist advice where required
• Documenting the basis for decisions taken

For many universities now is the right time to assess whether existing governance frameworks, policies and decision-making processes remain fit for purpose.