Why Universities are Global

1
Why Universities are Global

• It is in our very nature

2
Discovery Dissemination of Knowledge

• Education
• Research
• Public Service Outreach
• Economic Development
• Intellectual Leadership

3
Human Resource Pipeline

• Faculty Recruitment Retention
• Student Recruitment and Retention
• Alumni Participation
• Partnerships Collaborations

4
Education

• Specialization Integration
• Experiential Learning
• Good Citizen Imperative
• Multi-dimensional Diversity
• International Experience as a Critical
  Differentiator
• Collaborative Teaching Content Delivery
• Joint and Dual Degrees

5
Research

• Ideas know no boundaries
• Interdisciplinary as a driver Collaborative
  research teams
• Unique Laboratories, Facilities, and Environments
• Clinical Research Opportunities
• The Foreign Culture, Society, and Location is the
  research

6
Public Service and Outreach

• Enrichment of Society
• Promote Education among the Worlds Youth
• Outreach via Life-Long Learning
• Partnerships with Humanitarian Agencies

7
Economic Development

• Technology Transfer, Innovation, and IP
• Joint Projects with Foreign Governments,
  Universities, and Corporations
• Growth of the consumer and the idea markets
  beyond US borders

8
Intellectual Leadership

• Marketplace for ideas and leadership is global
• Peer review is global
• Open-ness to alternative systems and ideas be
  flexible
• Confidence in what we do without being arrogant

9
Opportunities Challenges

• US Tradition of Open-ness and Transparency vs.
  Individual/Organization Gain IP
• Open-ness vs. Security the Post 9-11 challenge
• US Legal/Financial Framework and the Interface
  with International Partners
• The US Ethical/Moral Framework and Interface with
  International Partners

10
Fundamentals of International Contracts
11

• Introduction of Theme
• International Case Study When Do Applications
  End, Negotiations Begin, and Contracts Take
  Effect.
• Contractual Terms Conditions Where to Begin

12
Richeys List

• Adapted from John B. Richeys article on
• Crafting Contracts for International Projects
• (see resources for citation)
• Who are the parties to the agreement (National
  Sovereignty, Power-Sharing)
• Statement-of-Work
• Principals and Scientific or Programmatic
  Direction
• Contract Employees and Independent Contractors

13

• Subcontractors
• Term (remember that period during which funds may
  be spent can differ from the work period)
• Cost ConsiderationsFees for Extraordinary
  Service Settling-in CostsMake-Ready Costs
  Saturday/Sunday Pay Hardship Pay
  Cost-of-Living Adjustments Dependent Travel
  Educational Allowances Medical Evacuation
  Evacuation During Civil Disturbances Insurance

14

• PaymentLetter of CreditPayment in Dollars
  (other currency)
• Tax ConsiderationsAccounting and
  AuditingReports and ReportingWarrantiesTerminat
  ionArbitration and Applicable Law

15

• Property
• Intellectual Property
• Force Majeure
• Publications
• Facilities

16

• Budget Considerations (Direct Costs)
• Transport of Personal Items (freight forwarder
  service company fees)
• Storage costs of items not shipped
• Expediter costs for clearing shipments
• Home Leave (annual biennial) per institutional
  policy
• Rest and recuperation leave (quarterly, annually,
  other)

17

• Budget Considerations (Direct Costs)
• Temporary residences (including upon
  arrival/departure)
• Domestic security personnel
• Maintenance agreements
• Insurance (driving/auto, household, liability)
• License fees (driving, work permit, etc)
• Spare parts (vehicles, computers research
  equipment)

18

• Budget Considerations (Direct Costs)
• Medical examinations and vaccinations
• Orientation to country culture
• Language training
• Currency exchanges banking charges
• Airport and travel taxes or fees

19

• Indirect Costs
• Severability
• Notices
• Confidentiality
• Modifications
• Assignment
• Publicity
• Independent contractors
• Export controls

20

• Other Important factors and Considerations
• Expectations and Realities A DiscussionResource
  s Web Resources see supplemental handout 1

21
Budget Considerations
22
Start with the standard university budget for a
sponsored project. Costs should be budgeted and
accumulated in a consistent manner.
23
Special Budget Considerations

• Payments
• Currency fluctuations (are you going to be paid
  in US dollars?)
• Faculty compensation
• Travel and per diem
• Tax costs
• FA
• Audit costs
• Expectations and realities

24
Payments

• Fixed Price vs. Cost Reimbursement
• Advanced payments
• Consider escrowing 6 months of funding from
  sponsor to serve as contingency
• Payments by wire transfer

25
Currency

• Costs should be invoiced in U.S. dollars and
  payments should be made in U.S. dollars.
• If the transactions are not in U.S. dollars,
  costs should be indexed so that the universities
  actual costs are recovered.
• Reference a published exchange rate
• Currency conversion costs should be included in
  the budget

26
Currency

• Currency fluctuation is particularly important
  for fixed-price agreements.
• What happens if the dollar strengthens?
• If the dollar weakens, what happens to the
  recovered costs?

27
Faculty Compensation(when overseas for extended
period)

• Where will the faculty member be paid?
• Will the faculty member be paid in US dollars?
• Living allowance vs. travel

28
Travel Per Diem

• Is the fee to expedite passport processing an
  allowable cost and other special questions
  regarding international travel?

29
Tax Costs

• Consult tax advisor
• If the U.S. university will be required to pay
  taxes in the country, budget for preparation of
  tax returns or other required filings and for
  the cost of taxes.
• In some countries, taxes may be withheld from
  payment to the U.S. university.
• Consult tax advisor!

30
Questions about costs or questionable costs

• Special payments to individuals
• Cash payments to contract performers and
  consultants

31
Two Cases

• Singapore
• Taiwan
• Expectations Realities

32
FA

• The universitys audited rate appropriate for the
  activity should be used.
• Be prepared to explain how your rates are
  derived.
• Do not compromise the universitys U.S. federal
  funding for research
• The United States government is the most favored
  nation

33
Audit

• Is an audit required?
• When?
• What is the scope?
• Who will perform it? (Can this be part of a
  separate agreement?)
• Alternatives
• Often A133 will be acceptable
• Inspection of financial records in U.S.

34
Audit

• If an external audit is required
• Costs of audit should be a project cost, and
• separately budgeted from programmatic and
  institutional FA costs.

35

• Bibliography
• Richey, John B. (1994). Budgeting for
  International Projects In-Country Business
  Operations and Long-Term Residential
  Assignments. SRA Journal, Vol 25, No. 4, Spring.

36
Tax Liability to Foreign Jurisdictions
37
GOVERNED BY FOREIGN COUNTRYS TAX LAWS AND U.S.
TAX TREATIES

• What Scope of Activities/Revenues Is Subject to
  Taxation?
• Can Allocate Liability by Contract, But Cant
  Eliminate Legal Liability

38
ASSESSMENT REQUIRES TAX EXPERTS

• Legal/Accounting
• Consult Early to Facilitate Best Transaction
  Structure and Terms

39
COMMON FOREIGN TAX TRIGGERS

• Creation of Permanent Establishment in Foreign
  Country by
• Owning/Leasing/Contracting Rights to Use Real
  Estate
• Establishing Office or Residence
• Opening Bank Account
• Signing Contracts
• Making Payments

40
COMMON FOREIGN TAX TRIGGERS

• Exceedance of Per Person or Aggregated All
  Persons Days Limit in Foreign Country in Tax or
  Calendar Year
• Earning IP Royalties/Revenues in Foreign Country

41
OCCASIONAL EXCLUSIONS

• Purely Educational Activities (No Research) in
  Foreign Country
• Limited Days in Foreign Country
• Charitable Exclusion IF Qualify as Charity in
  Foreign Country

42
TAX LIABILITY TO FOREIGN JURISDICTIONS

• Entity Taxation
• Withholding From Payments for Services (e.g.,
  5-10-30)
• Corporate Income Tax on Percentage of Total
  Revenues Allocated to Foreign Jurisdiction

43
TAX LIABILITY TO FOREIGN JURISDICTIONS

• Individual Taxation
• Percentage of Total Compensation Allocated to
  Foreign Jurisdiction Activities and Taxed
• Arises Whether Individual Acts as Entity
  Representative or In Personal Capacity
• How to Compensate Net Additional Tax to
  Individual Over Otherwise Applicable Tax
  Liability
• Tax Accounting, Return Preparation, Filing
  May Pose Significant Costs

44
Regardless of Expert Opinions, There is
Uncertainty

• Politics
• Regime Changes
• Law Changes
• Can Change Tax Liability

45
Research Agreements Should Allocate Tax Liability
to Foreign Sponsor/Collaborator (Payments Net of
Taxes)

• Or Funding Must Cover Program Costs and Taxes
• Consider Entity and Individual Taxes/Cost of Tax
  Accounting and Returns

46
Consider Limiting Scope of Revenues Subject to
Taxation Through Service Blocker Corporation

• Separate Entity Controlled by U.S. University for
  Purpose of Foreign Activity
• But Must Honor Corporate Formalities
• Hard for Faculty
• Foreign Sponsor/Collaborator May Misread as Lack
  of U.S. University Commitment

47
Special Concerns Human Subjects in Foreign
Agreements
48
IRB Oversight Roles Responsibilities

• Home Institution
• Local IRB
• Are modifications to FWA needed?
• Consideration of local context

49
Foreign Laws, IRBs, Oversight

• Does Foreign Organization/site have an IRB?
• Laws of country
• Situational specifics university, hospital,
  clinic, field site

50
Protocol Management

• Who gives approval for waivers of protocol? E.g.
  enrollment criteria
• Record keeping
• Confidentiality Access to identifiable data

51
IRB Points to Consider

• Payments to subjects (incentive versus coercive)
• Informed Consent
• Documentation of process in non-literate
  population
• Societal cultural influences

52
Contractual Matters

• Right to terminate for noncompliance with
  protocol
• Sensitivity to communication clear lines of
  authority for decision making

53
Managing the Costs of Trial

• Complicated local staff and subject payments in
  foreign currency
• Consider establishing separate organization for
  local management financial oversight

54
Managing Costs, continued

• Accountability to sponsor
• Audit costs
• Long term storage/archiving of subject records

55
Intangibles

• Risk to reputation
• Protect investigators as well as subjects
• Make sure you have exit strategy

56
State Department and NIH

• NIH policy requires State Department approval
  prior to authorizing funding for any clinical
  and/or social/behavioral research
• Managed internally within NIH time delays may
  result

57
EXPORT CONTROLS AND EMBARGOES
58
Export Controls and Embargoes

• International Collaborations and Foreign Sponsors
  Pose Potential Issues Under U.S. Export Controls
  and Embargoes
• May Apply to Activities/Transfers Abroad and to
  Transfers of Information to Foreigners in the
  U.S.

59
PURPOSES OF EXPORT CONTROLS/EMBARGOES

• Advance U.S. Foreign Policy Goals
• Restrict Goods and Technologies that Could
• Contribute to Military Potential/Economic
• Superiority of Other Countries
• Prevent Proliferation of Weapons of Mass
  Destruction
• Prevent Terrorism and Other Illicit Activities
  (e.g., Drug Trafficking)

60
PURPOSES OF EXPORT CONTROLS/EMBARGOES

• Fulfill International Obligations (e.g.,
  treaties)
• Post September 11, 2001 Anti-Terrorism Tool
• -Increased Focus on UniversitiesAnd on
  Enforcement
• -Focus on Life Sciences-Biologicals
• -USA Patriot Act and Public Health Security and
  Bioterrorism Preparedness and Response Act Also
  Govern Biologicals and Chemicals

61
Three Export Controls and Embargoes Regimes in
the U.S.

• 1. International Traffic in Arms Regulations
  (ITAR), Department of State, 22 C.F.R. 120-130
• Covers Munitions and other Military Application
  Technologies, both offensive and defensive
• Licensing by Directorate of Defense Trade
  Controls (DDTC)

62
Three Export Controls and Embargoes Regimes in
the U.S.

• 2. Export Administration Regulations (EAR),
  Commerce Department, 15 C.F.R. 730-774
• Dual Use Technologies With Primary Commercial
  Application, But Also Possible Military Use
• Licensing by Bureau of Industry and Security
  (BIS), formerly BXA

63
Three Export Controls and Embargoes Regimes in
the U.S.

• 3. Office of Foreign Assets Control (OFAC)
  Regulations, Treasury Department, 31 C.F.R. 500
  et seq.
• Impose Trade Sanctions, and Trade and Travel
  Embargoes
• Prohibit Payments/Providing Value to Nationals of
  Sanctioned Countries and Some Specified
  Entities/Individuals
• May Prohibit Travel and Other Activities with
  Embargoed Countries and Individuals Even When
  Exclusions to EAR/ITAR Apply

64
BACKGROUND LICENSING

• ITAR and EAR Cover U.S. Origin Items (e.g.,
  equipment, chemicals, biologicals, other
  materials, software code, computersItems or
  Materials) If
• On the U.S. Munitions List (ITAR, 22 CFR 121.1)
  And
• Even if Not on USML, Anything with a Military
  Application

65
BACKGROUND LICENSING

• .Or
• - On the Commerce Control List (EAR 15 CFR 774)
• And Related
• - Defense Services (ITAR) e.g., training on how
  to use defense articles
• - Technologies/Technical Data (EAR and ITAR)
  information beyond basic and general marketing
  materials on use, development or production of
  controlled items or materials (15 CFR 772, 774,
  Supp. 1 and 2 22 CFR 120.10)

66
BACKGROUND LICENSING

• When Exclusions Dont Apply and License Required,
  Must Obtain License
• -Before Export (or Re-Export) Transferring
  Abroad in Any Mediumto AnyoneControlled Items
  or Materialsor Controlled Technologies/Techni
  cal Data
• And

67
BACKGROUND LICENSING

• Before Deemed Export Transferring to Foreign
  Nationals in the U.S. (Even on Campus) in any
  MediumControlled Technologies/Technical Data
• -Deemed Exports Apply to Controlled
  Technologies/Technical DataNot to Related
  Controlled Items or Materials Without Any
  Accompanying Information
• -Security Must be Implemented on Campus to
  Prevent Unlicensed Deemed Exports

68
BACKGROUND LICENSING

• If License is Required and Denied, Export or
  Deemed Export is Prohibited
• Exporting is a PrivilegeNot a Right

69
VIOLATIONS

• Violations Subject to Civil and Criminal
  Penalties Against Individuals and
  InstitutionsCan Also Result in Loss of
  Export/Deemed Export Privileges and Loss of
  Funding
• -ITAR (Individual and Entity)
• -Criminal Fines lt 1M and lt 10 Years in Prison
• -Civil Fines lt 500K and Forfeitures

70
VIOLATIONS, continued

• EAR
• Criminal Fines/Entities lt Greater of 1M or 5X
  Value of Export
• Criminal Fines/Individuals lt 250K and/or lt 10
  Years in Prison
• Civil Fines 10K - 100K
• OFAC (Individual and Entity)
• Criminal Fines lt 1M and lt 10 Years in Prison
• Civil Fines 12K - 55K
• Violations Affect Reputations

71
BACKGROUND EXCLUSIONS

• Most Common Exclusions from Controls/Exemptions
  from Licensing for Academic Research
  Institutions
• Fundamental Research Information Exclusion
  (ITAR/EAR) (22 C.F.R. 120.11(8) 15 C.F.R.
  734.8(a) and (b))
• Public Domain/Publicly Available Information
  Exclusion (ITAR/EAR) (See 22 C.F.R. 120.10(5),
  120.11, 125.1(b), 125.4 15 C.F.R. 734.3(b)(3),
  734.7-734.10)

72
BACKGROUND EXCLUSIONS, continued

• -Government Contract Controls Information
  Exemption (EAR) (15 C.F.R. 734.11)
• - Educational Information Exclusion (ITAR/EAR)
  (15 CFR 734.3(b)(3)(iii), 734.9, 22 C.F.R.
  120.10(5))
• - Full-Time Bona Fide U.S. Higher Ed Employee
  Information Exemption (ITAR) (22 C.F.R.
  125.4(b)(10))

73
FUNDAMENTAL RESEARCH EXCLUSION (EAR/ITAR)

• Fundamental Research Exclusion (EAR/ITAR) Applies
  to
• Information--Not to Items or Materials
• Resulting From--Or Arising During (Open Issue
  Already Existing and Used During)
• Basic and Applied Research in Science and
  Engineering
• Conducted at an Accredited Institution of
  Higher Education (EAR)/Higher Learning (ITAR)

74
FUNDAMENTAL RESEARCH EXCLUSION (EAR/ITAR),
continued

• -Located in the U.S. (Doesnt Apply Abroad with
  Limited, Specific Exception Under ITAR)
• -Where the Information Is Ordinarily Published
  and Shared Broadly In The Scientific Community
• and
• - Is Not Subject to Proprietary or U.S.
  Government Publication or Access Dissemination
  Controls (e.g., re foreign national
  participation)

75
FUNDAMENTAL RESEARCH EXCLUSION (EAR/ITAR)

• Allows U.S. Universities to Include Foreign
  Faculty, Students, Visitors in Research Involving
  Creation of Controlled Information on Campus in
  the U.S. Without a License
• Doesnt Allow Research Abroad (Limited ITAR
  Exception)

76
FUNDAMENTAL RESEARCH EXCLUSION (EAR/ITAR),
continued

• Once Created in Fundamental Research, the
  Information May Be Transferred Abroad Without
  Restriction
• Fundamental Research Information Is Public In
  Nature--Excluded (Not Just Exempted) From
  Controls

77
FUNDAMENTAL RESEARCH EXCLUSION (EAR/ITAR)

• Based on NSDD 189 (1985)
• Fundamental Research is Basic and Applied
  Research in Science and Engineering, the Results
  of Which Ordinarily are Published and Shared
  Broadly Within the Scientific Community, as
  Distinguished from Proprietary Research and From
  Industrial Development, Design, Production and
  Product Utilization, the Results of Which
  Ordinarily are Restricted for Proprietary or
  National Security Reasons
• Classification is Appropriate for Security

78
PUBLICLY AVAILABLE/PUBLIC DOMAIN EXCLUSION
(EAR/ITAR)

• Publicly Available (EAR)/Public Domain (ITAR)
  Information Exclusion Applies to
• - Information already published, not just
  ordinarily published, through specified means
• -libraries open to the public, including most
  university libraries
• -unrestricted subscriptions, newsstands, or
  bookstores for a cost not exceeding reproduction
  and distribution costs (including a reasonable
  profit)
• -published patents

79
PUBLICLY AVAILABLE/PUBLIC DOMAIN EXCLUSION
(EAR/ITAR), continued

• -conferences, meetings, seminars, trade shows, or
  exhibits held in the U.S. (ITAR) or anywhere
  (EAR), which are generally accessible by the
  public for a fee reasonably related to the cost
  and where attendees may take notes and leave with
  their notes or
• -

80
PUBLICLY AVAILABLE/PUBLIC DOMAIN EXCLUSION
(EAR/ITAR), continued

• --websites accessible to the public for free and
  without the hosts knowledge of or control of who
  visits or downloads software/information (clearly
  acceptable under EAR, and likely acceptable under
  ITAR).

81
PUBLICLY AVAILABLE/PUBLIC DOMAIN EXCLUSION
(EAR/ITAR)

• Broadest Exclusion--Can Apply to Information
  Transfers in U.S. and Abroad

82
PUBLICLY AVAILABLE/PUBLIC DOMAIN EXCLUSION
(EAR/ITAR), continued

• If University/Entity Accepts Publication or
  Access/Dissemination Restrictions Fundamental
  Research/Publicly Available/Public Domain
  Exclusions Are Destroyed
• Side Deals With Sponsors Destroy Exclusions
• Short (30 - 90 days) Pre-publication Review
  Period (Not Approval) For Patent Protection/to
  Remove Inadvertently Included Sponsor-Proprietary
  Information Does Not Destroy Exclusions

83
GOVERNMENT CONTRACT CONTROLS LICENSE EXEMPTION
(EAR)

• License Exemption for Information Resulting from
  Federally Funded Research Covered by Contract
  Controls
• Must Satisfy Controls
• If Not, Fundamental Research Not Available and
  Violation May Occur

84
OTHER EXCLUSION/EXEMPTION

• Educational Exclusion (EAR/ITAR) Applies to
• -General Science, Math, Engineering Commonly
  Taught at Universities (ITAR - Subject Matter
  Focused), or In Course Catalogues and In
  Associated Teaching Labs of Any University (EAR
  Venue Focused)
• - Applies in U.S. and Abroad

85
OTHER EXCLUSION/EXEMPTION

• Bona Fide Full Time Employee License Exemption
  (ITAR) Applies to
• -Unclassified Technical Data Provided to Bona
  Fide Fulltime Regular Employees of U.S.
  Institutions of Higher Learning
• -Requires Permanent Abode in U.S. Throughout
  Employment

86
OTHER EXCLUSION/EXEMPTION, continued

• -Must Inform Employee in Writing Not to Transfer
  to Other Foreign Nationals
• -Does Not Apply to Students with F-1 Visas or
  Others With Visas Allowing Only Part-time Work or
  to Non-Employee Collaborators or to Nationals of
  ITAR Prohibited/Embargoed Countries

87
IF EXCLUSIONS DONT APPLY AND LICENSE IS REQUIRED

• If Items or Materials/Technology on Commerce
  Control List
• EAR License May Be Required Depending on Type of
  Listing/Destination
• Most EAR Licenses are Considered Case-by-Case

88
IF EXCLUSIONS DONT APPLY AND LICENSE IS
REQUIRED, continued

• If Items or Materials Are On CCL as EAR 99 Only
• Likely Will Need EAR License If
• Destination-Foreigners Nationality is on
  EAR Entities List-China, India, Israel, Pakistan,
  Russia have restricted entities-15 C.F.R. 744,
  Supp. 4

89
IF EXCLUSIONS DONT APPLY AND LICENSE IS REQUIRED

• -End User is on Denied Person List
• -Destination is OFAC Embargoed Country Cuba,
  Iran, Iraq, Libya, N. Korea, Burma, Liberia,
  Sudan, Syria, Zimbabwe
• -Destination is Another U.S. Embargoed Country
  (Rwanda)
• -Individuals/Entities are on OFAC Prohibited List
• -Weapons of Mass Destruction Program or Red Flag
  Involved

90
IF EXCLUSIONS DONT APPLY AND LICENSE IS REQUIRED
If Items or Materials/Technical Data
On/Covered By the US Munitions List, ITAR License
Required

• -License Denied to Afghanistan, Belarus, Ivory
  Coast, Cuba, Cyprus, Indonesia, Iran, Iraq,
  Libya, N. Korea, Syria, Vietnam, Burma, China,
  Haiti, Liberia, Rwanda, Somalia, Sudan, Yemen,
  Zaire (Congo), UN Security Council Arms Embargoed
  Country (Certain Exports to Rwanda)
• -License Considered Case-by-Case Otherwise

91
Beware

• Export Controls May Apply/Be Violated
• When Biological Samples--Research Equipment
  Computer with Research Data or Proprietary
  Software--Are Hand-Carried or Shipped Abroad
  Without a License
• When University Has Reason to Know that Sponsors
  or Collaborators are Violating Controls (15 CFR
  736.2(b)(10))

92
Beware

• Export Controls May Apply/Be Violated
• When Sponsors Provide Proprietary Information to
  University Researchers Who Then Share It With
  Anyone Abroad or With Foreigners in U.S.

93
Beware

• If Exclusive Material Transfer Agreements or
  IP Licensing Agreements Impose Publication/Access-
  Dissemination Restrictions and the Materials
  and/or Related Technologies/Technical Data are
  Controlled Deemed Exports and Exports

94
Beware

• When Tech Transfer Disclosures are Made Abroad
  Before a Patent Issues (Becomes Public)--Except
  When Directly Related to Applying for a Foreign
  Patent

95
Beware

• Embargoes May Apply to
• -Payments (Compensation, Honoraria, Contracts
  to Embargoed Countries/Individuals/Entities)
• -Attendance At/Planning of International
  Conferences
• -Surveys/Services to Embargoed
  Countries/Individuals/Entities

96
Beware

• Embargoes May Apply to
• Joint Authorship/Editing of Articles with
  Nationals of Embargoed Countries
• December 17, 2004 OFAC General License for Cuba,
  Sudan and Iran Allows Most Editing/Joint
  Authorship with Nationals of these Countries (But
  Not the Governments or Government Employees) (31
  C.F.R. 515, 538, 560)

97
Beware

• Embargoes May Apply to
• Joint Authorship/Editing of Articles with
  Nationals of Embargoed Countries
• OFAC April 2, 2004 Letter Allows Peer Review/Copy
  and Style Editing of Libyan Nationals Articles
• Raises First Amendment Issues

98
Beware

• Licenses Can Take WeeksMonths
• - Sometimes Longer to Obtain
• - Apply Early

99
Subcontracting/ContractingWith Foreign Sites
100

• Introduction of Theme
• Contractual Terms Conditions Where to Begin
• Richeys List
• Adapted from John B. Richeys article on
• Crafting Contracts for International Projects
• (see resources for citation)

101

• Richeys List
• Have you received the following items from a
  subcontractor
• Statement-of-Work
• Budget and Budget Justification
• Description of Key Personnel and Facilities
• Review of all Contractual Items paying particular
  attention to the international dimension of the
  subcontract.

102

• Questions
• Do you anticipate any problems with the
  subcontractors Ability to perform the work?
• Are you satisfied with the reporting requirements
  of the subcontractor?
• Will this allow sufficient tracking of
  performance/nonperformance?

103

• Questions
• Will an A-133 audit be required the by the
  university of the subcontractor?
• Have you considered and/or incorporated all the
  costs of the subcontractor, including the
  subcontractors IDC (if any) into the budget
  agreement?

104

• Items to Consider Early
• Payment
• Accounting and Auditing
• Reports and Reporting
• Termination
• Arbitration and Applicable Law

105

• Cost Considerations (Managing
  Expectations and
  Realities)
• Settling-in Costs Make-Ready Costs
  Saturday/Sunday Pay Hardship Pay
  Cost-of-Living Adjustments Dependent Travel
  Educational Allowances Medical Evacuation
  Evacuation During Civil Disturbances Insurance
  Fees for Extraordinary Service

106

• Budget Considerations (Direct Costs)
• Transport of Personal Items (freight forwarder
  service company fees)
• Storage costs of items not shipped
• Expediter costs for clearing shipments
• Home Leave (annual biennial) per institutional
  policy
• Rest and recuperation leave (quarterly, annually,
  other)

107

• Budget Considerations (Direct Costs)
• Temporary residences (including upon
  arrival/departure)
• Domestic security personnel
• Maintenance agreements
• Insurance (driving/auto, household, liability)
• License fees (driving, work permit, etc)

108

• Budget Considerations (Direct Costs)
• Spare parts (vehicles, computers research
  equipment)
• Medical examinations and vaccinations
• Orientation to country culture
• Language training
• Currency exchanges banking charges
• Airport and travel taxes or fees

109

• Other Important Factors and Considerations
• Expectations and Realities A Discussion
• Resources
• See supplemental handout 2

110
Monitoring International Sites Practical
Considerations
111
Accreditation Issues

• Compliance and consistency with institutional
  policies, governing board policies, cognizant
  professional accreditors, and the cognizant US
  regional accreditor

112
Accreditation Issues

• Regional agencies accredit the entire institution
• Accreditation is specific to an institution (not
  transferable)
• Compliance criteria apply to programs wherever
  located and however delivered

113
Accreditation Issues

• Prior notice to regional accreditor
• Transparency of agreements/documents for review
  of accreditation-related issues
• Assessment processes in place

114
Transfer Credit Issues

• Student admissibility
• Mission convergence
• Comparability
• Intl-based accreditors are not material

115
Accreditation Issues

• Institution must monitor all public
  communications by partners to avoid
  misrepresentations
• Must clearly delineate who awards the certificate
  or the degree
• Joint-degrees require an additional level of
  effort and care
• Joint theses and dissertations

116
Other Academic Issues

• Recruitment counseling of students
• Admission of students
• Student instruction
• Evaluation of student progress
• Record keeping

117
Other Academic Issues, continued

• Tuition and fees
• Faculty appointment and credentials
• Nature and location of courses
• Instructional resources such as IT and Library

118
Student and Faculty Services

• Institute of International Education (IIE)
  www.iie.org
• NAFSA Association of International Educators
  www.nafsa.org
• Council on International Education Exchange
  (CIEE) www.ciee.org

119

• Questions regarding the administration of an
  international sponsored program agreement
• Do you anticipate any problems with the
  recipients ability to perform the work?
• Are you satisfied with the reporting requirements
  of the subcontractor?
• Will this allow sufficient tracking of
  performance/nonperformance?
• Expectations and Realities A discussion.

120
Technology Transfer
121
When in Rome..

• Take a moment to understand how IP management
  happens in the collaborative institution.
• You will find a lot of similarities
• There ARE differences inLawsExpectations of
  facultyLicensing practices and treatment of
  income

122
When the Point of the Agreement is Technology
Transfer

• Technical Assistance Agreements
• Provision of training or services
• Required language
• Submitted unsigned

123
Information Required for TAA

• ITAR Section 124.7
• Describe defense article
• Specifically describe the assistance or data
• Specify duration
• Specifically identify the foreign country or
  countries

124
Required Clauses

• ITAR Section 124.
• This Agreement shall not enter into force, and
  shall not be amended or extended without the
  prior written approval of the Department of State
  of The U.S. Government.
• This Agreement is subject to all U.S. laws and
  regulations relating to exports and to all
  administrative acts of the U.S. Government
  pursuant to such laws and regulations.

125
Required Clauses, continued

• ITAR Section 124.
• The parties to this Agreement agree that the
  obligations contained in this Agreement shall not
  affect the performance of any obligations created
  by prior contracts or subcontracts which the
  parties may have individually or collectively
  with the U.S. Government.

126
Required Clauses, continued

• ITAR Section
• No liability will be incurred by or attributed to
  the U.S. Government in connection with any
  possible infringement or privately owned patent
  or proprietary rights either domestic or foreign,
  by reason of the U.S. Governments approval of
  this Agreement.

127
Required Clauses, continued

• ITAR Section
• The technical data or defense service exported
  from the U.S. in furtherance of this Agreement
  and any defense article which may be produced or
  manufactured from such technical data or defense
  service may not be transferred to a person in a
  third country or to a national of a third country
  except as specifically authorized in this
  Agreement unless the prior written approval of
  the Department of State has been obtained.

128
Required Clauses, continued

• ITAR Section
• All provisions of this Agreement which refer to
  the U.S. Government and the Department of State
  will remain binding on the parties after the
  termination of the Agreement.

129
No License Required

• Exportation of Data
• Second Party acknowledges that University's
  exportation of any intellectual property and/or
  technical data is subject to compliance with the
  United States Export Laws.

130
Submit Unsigned TAA

• Submit fully negotiated unsigned TAA
• TAA not effective until approved
• Transmittal letter with required clauses
• 8 collated sets
• Certification letter Required by 22 CFR 126.13

131
Identify Ownership of Intellectual Property
Developed During the Project or Collaboration.

• Generally intellectual property developed solely
  using the facilities and personnel of one party
  will be solely owned by that party.
• In some cases intellectual property will be
  jointly owned by the U.S. and the foreign
  institutions.

132
Identify Ownership of Intellectual Property
Developed During the Project or Collaboration,
continued

• Funding source does not necessarily dictate
  ownership but understand obligations of a foreign
  prime contract or grant before developing any
  sub-agreement.
• Note Results of some sub-agreements ARE works
  made for hire!

133
Provide for Costs and Royalty Sharing for Jointly
Held Intellectual Property

• Inter-institutional agreements may be useful
  although there are few models.
• Specify that each institution is responsible for
  obtaining assignment of IP from inventors ahead
  of time.
• Identify process for obtaining and notifying
  other party of disclosures.

134
Inter-institutional agreements, continued

• Reciprocal research/education licenses are
  needed.
• A commercialization plan will be necessary.
• Include rights one party may have to improvements
  the other party makes to the technology in the
  future.
• Identify who will be responsible for
  administration, paying costs, approvals,
  recovering payments due from licensees, etc.

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A few hints

• Good fences make good neighbors
• Background IP
• Non-collaborative IP
• U.S. inventors must file first in the U.S.
• Talk with your Technology Transfer Office
• Dont forget about export concerns

136
Special considerations for research conducted in
other countries

• Rights in intellectual property derived from
  indigenous resources.
• Reservation of rights for licensing in developing
  nations.