To address issues of foreign influence and interference in Australia, the Australian Government has introduced a package of reforms (Reforms) designed to increase transparency and accountability around Australia‘s political processes. The Reforms include the Foreign Influence Transparency Scheme Act 2018 (Cth) (FITSA). This was introduced as part of the Reforms, and requires entities to register with the Attorney General's Department if they conduct certain activities on behalf of foreign principals.

In recent months, Universities with Confucius Institutes have featured heavily in the media in relation to reports on the Reforms, leading to questions around the obligations on Universities to register under the FITSA. Since the deadline date for registration under the FITSA (which was 10 March 2019), no university has registered their Confucius Institute leading various news sources to question whether they are acting in contravention of the FITSA.

The FITSA applies to universities that undertakes political or governmental lobbying, communication activities or disbursement activities on behalf of a foreign principal. The FITSA define ‘foreign principal’ and ‘registrable activity’ very broadly. These concepts are complex and require careful examination of both the legislation and the activities of the entity. Australian universities that have close relationships or that act in conjunction with international universities or other foreign education bodies should be particularly vigilant in undertaking activities that can influence political or governmental processes.

Universities should monitor and be conscious of any of the following activities undertaken by a foreign education body or other foreign principal:

• Activities undertaken by the foreign education body in conjunction with the university that involves a Federal government minister or is attended by a member of parliament or their staff.
• Activities that encourage the general public to take political action. For example, encouraging students to write to a political candidate on a policy issue.
• Activities undertaken by a student organisation that may have ties to a foreign principal.
• The publication or distribution of material jointly produced by the university and the foreign education body.

There are a number of exemptions set out in the FITSA which exempt an entity that is acting on behalf of a foreign principal from the obligation to register. Though most of these exemptions will not be relevant to universities generally, some universities may fall within the scope of the registered charities exemption. This exemption applies where:

1. the university is registered as a charity under the Australian Charities and Not for Profits Commission Act 2012;
2. the activity that is otherwise registrable is undertaken in pursuit of a charitable purpose of the person within the meaning of Part 3 of the Charities Act 2013;
3. the activity is not a disbursement activity;
4. at the time the activity is undertaken, the fact that the person is undertaking the activity on behalf of a foreign principal is apparent to the public or disclosed to the public; and
5. at the time the activity is undertaken, the identity of the foreign principal is apparent to the public or disclosed to the public.

Given the media scrutiny around registration obligations under the FITSA, universities should take steps to ensure that activities are appropriately screened and registered, if required. Our foreign investment advisory team has assisted clients across a range of sectors including the education sector and are available to assist on the FITSA.