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Recommended Conditions for Granting of a Waiver

In accordance with language found in Section 1062 of the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021,¹ the Statement of Task for this study directs the committee to recommend conditions that a host institution must demonstrate to support a waiver to the limitation on providing funds to institutions of higher education hosting Confucius Institutes (CIs). Congress formulated this language following the waiver process that the Department of Defense (DOD) developed in response to Section 1091 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019.²

The DOD waiver process from FY 2019 required universities to provide a substantial amount of information, lacked clear and transparent evaluation criteria, and failed to provide a timeline for considering a waiver application or providing feedback. By not involving key organizations in developing either the waiver criteria or the feedback process in 2018 and 2019, DOD created mistrust with colleges and universities. Ultimately, DOD did not approve any waiver applications following the FY 2019 NDAA, as the agency determined that it was “not in the national interest” to grant waivers (Asimov, 2019). Several institutions felt confident that they would receive a waiver and were genuinely surprised by DOD’s decision not to award any (Kaleem et al., 2022). This failure to issue waivers, coupled with a paucity of feedback—which could hamper an institution’s ability to reapply and achieve success in the future or to effectively mitigate

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¹ William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law No. 116-283, 116th Congress, 2nd Session (January 1, 2021), Section 1062 (U.S. Congress, 2021).

² John S. McCain National Defense Authorization Act for Fiscal Year 2019, Public Law No. 115-232, 115th Congress, 2nd Session (August 13, 2018) (U.S. Congress, 2018).

real risks that might be present on their campus—led to frustration and a lack of trust in future waiver processes.

A strong and credible waiver process should have as much transparency as possible in balance with legitimate national security concerns and allow institutions of higher education to retain access to resources and opportunities in Chinese language learning and related programs while safeguarding institutions from inappropriate engagements with the Chinese government on U.S. campuses. A potential waiver process, developed with input from key organizations including government, industry, higher education associations, and universities will

• articulate a clear, transparent waiver application process, including a clear data management plan for how this citizen data will be used, who will have access to the data, and how long the data will be maintained;
• include unclassified versions of review and decision protocols along with well-defined criteria for approval;
• identify timelines for review and response; and
• communicate waiver decisions and for denials, provide unclassified information that could be valuable to the institution in addressing national security concerns that could be taking place on their campuses.

The transparency of the waiver process is balanced by the U.S. institutions demonstrating both an understanding of the known risks associated with hosting a CI and that they have taken appropriate steps to mitigate these risks. This is imperative for protecting both DOD-sponsored fundamental and applied scientific research, and university research, academic freedom, and shared governance writ large. The committee notes that the “Agency Waiver Process for [Federal Acquisition Regulation] FAR Prohibition on Covered Telecommunications and Video Surveillance Services or Equipment” that the U.S. Agency for International Development developed in response to Section 889 of the NDAA for FY 2019 may provide a helpful template for organizing and streamlining the recommended waiver criteria into a formal, transparent waiver process (USAID, 2021). The committee also encourages DOD to incorporate aspects of the “Response and Remediation” process employed by the Committee on Foreign Investment in the United States, as this can shift the waiver process from a binary yes or no decision to a constructive, iterative dialogue between DOD and an institution of higher education. The committee wants to be respectful of DOD’s bandwidth and believes that such dialogue will not be needed for every waiver application, but rather when circumstances dictate more of a conversation in order to address and mitigate possible concerns.

Finally, the committee recognizes that the U.S. government has the right to withhold taxpayer dollars from going to institutions of higher education where the Chinese government is embedded on campus if proper risk-mitigating measures

to secure and protect research data and intellectual property are not present or sufficient.

Recommendation 1.1: Granting Waivers

In the absence of any applicable adverse information that cannot be addressed or mitigated through the criteria below or other means, DOD should grant a waiver if an applying institution of higher education meets the stated waiver criteria.

The committee recognizes that there may be classified reasons why a waiver might not be awarded to an individual institution of higher education. However, in the absence of DOD being aware of adverse information that cannot be addressed or mitigated, and in instances where all other criteria are satisfied, DOD should grant a waiver.

Recommendation 1.2: Communicating about Waivers

If DOD does not grant any waivers, or decides not to grant a waiver to a specific institution of higher education when other waivers are awarded, it should specify the reason(s) for denial to the extent possible at the unclassified level.

This will potentially allow an institution denied a waiver to understand underlying concerns and to address security risks on campus that they may not be aware of. Colleges and universities also may want to consider having access to or retaining a cleared individual in order to have a fuller understanding of security-related issues.

Recommendation 1.3: Establishing the Waiver Application Process

Outside input is critical to ensure that the waiver application process is free from undue administrative and regulatory burden. In addition to U.S. government input, DOD should solicit external input from key organizations, including industry, higher education associations, and universities.

DOD should specify whether this is a one-time, permanent waiver, or provide additional information regarding the duration of the waiver and process for subsequent application, evaluation, and renewal.

Recommendation 2: Waiver Criteria

1. institution is not structured in a way that allows for formal Centers or Institutes, it should develop a structure for oversight and include the details for that structure in the documents governing a CI.
   1. U.S. host institutions should provide documentation of relevant sections on Centers and Institutes in their institutional handbook or policy manuals.
   2. U.S. host institutions should provide documentation of an established, regular review process for Centers and Institutes that would ultimately include the CI and would specify the period/frequency of review. This would include external reviews and advisory councils, as required by the institution.
   3. U.S. host institutions should provide documentation of public statements on academic freedom and freedom of expression as codified in university policy.
   4. U.S. host institutions should provide documentation of posted CI bylaws and governance documents, including operational and administrative policies and practices.
2. U.S. host institutions should demonstrate that they meet and comply with all applicable DOD requirements for information, data, physical, and research security.
   1. U.S. host institutions conducting $50 million or more of federally funded research per year should demonstrate compliance with National Security Presidential Memorandum – 33 (NSPM-33) or subsequent versions of this document. These institutions can satisfy this criterion by demonstrating that they have established and operate a research security program that includes elements of cybersecurity, foreign travel security, insider threat awareness and identification, and export control training.
   2. U.S. host institutions conducting less than $50 million of federally funded research per year should demonstrate the presence and implementation of adequate research security measures on campus. These institutions can satisfy this criterion by providing research security-related documents, including elements of cybersecurity, foreign travel security, insider threat awareness and identification, and export control training.
   3. U.S. host institutions should demonstrate that they have appropriate safeguards in place to ensure that CI faculty and visitors who are not university employees have limited or guest access to university computer networks and cannot access networks that store research results and communications. Institutions can satisfy this criterion by providing the university’s cybersecurity and visitor network access

2. 1. policy and demonstrating that CI faculty and visitors have limited or guest access.
3. U.S. host institutions should demonstrate that they possess full managerial control of CI curriculum, instructors, textbooks and teaching materials, programmatic decisions, and research grants.
   1. U.S. host institutions should demonstrate that CI employees and affiliates are formally associated with the host institution and subject to human resources policies and procedures. Institutions can satisfy this criterion by providing documentation, such as an employment contract or agreement, that the director of the CI is employed by the university with a reporting line to the host institution’s chief academic officer or their designee, and by providing public-facing personnel rosters that clearly state whether the host institution classifies CI-affiliated personnel from the Chinese partner institution as either host institution employees or as visiting scholars. CIs should hire their employees and affiliates in accordance with the host institution’s human resources policies and procedures and subject to corresponding campus policies.
   2. U.S. host institutions should demonstrate that CI curricula, including syllabi, textbooks, and teaching materials, are approved through faculty governance review.
   3. U.S. host institutions should demonstrate oversight over CI-supported research grants. In addition, universities should submit conflict of interest, conflict of commitment, and export control protocols that demonstrate university control.
4. U.S. host institutions should ensure that no contract or other written agreement pertaining to creating or operating the CI calls for the application of foreign law to any aspect of the CI’s operation at any U.S. campus of the host institution.
5. U.S. host institutions should demonstrate appropriate fiduciary and financial oversight of the CI. Host institutions can satisfy this criterion by providing the following:
   1. A publicly available annual budget for the CI, including sources of revenue and expenses.
   2. A copy of the agreement between the host institution and Hanban³ to host a CI (a hard or electronic copy of the original document, including the original version of the agreement in Chinese). The host institution should manage the agreement through its sponsored program process.

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³ “Hanban” is the colloquial term for the Chinese International Education Foundation, or CIEF, now known as the Ministry of Education Center for Language Education and Cooperation, or CLEC. This is the Chinese government agency affiliated with China’s Ministry of Education that promoted, managed, and funded CIs on foreign campuses.

1. 3. A copy of the Memorandum of Understanding and contract between the U.S. host institution and Chinese partner institution, if applicable.
   4. A copy of the policy that any financial contribution from foreign or domestic sources supporting the CI must be treated as a sponsored contract, not a gift, with a deliverable (programming, education, etc.).

The committee hopes that the recommendations and waiver criteria it proposes in this report are useful to DOD as the agency works to craft a fair, credible, and implementable waiver process in the coming months. The committee looks forward to undertaking additional research to understand foreign-funded programs and entities on campus more broadly and to identify implementable practices and principles regarding appropriate operations for academic institutions involving foreign partnerships in the coming months. The committee will present these, along with additional findings and recommendations, in a second report to be released in June 2023.