Sec. 216. Prohibition on contracts between certain foreign entities and institutions of higher education conducting Department of Defense-funded research
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Beginning on January 1, 2027, a covered institution may not enter into a contract with a covered nation or a foreign entity of concern. Subject to the provisions of this subsection and subsection (c), the Secretary of Defense may, or their designee, pursuant to a request submitted under paragraph
(2)of this subsection, issue a waiver of the prohibition set forth in subsection (a). A covered institution that desires to enter into a contract with a foreign entity of concern or a covered nation may submit to the Secretary of Defense, not later than 120 days before the institution enters into such a contract, a request to waive the prohibition set forth in subsection
(a)with respect to such contract. A waiver request submitted by a covered institution under clause
(i)shall include— the complete and unredacted text of the proposed contract for which the waiver is being requested, and if such original contract is not in English, a translated copy of the text into English (in a manner that complies with subsection (e)); and a statement that— is signed by the President or compliance officer of the institution designated in accordance with subsection (f); and includes information that demonstrates that such contract is for the benefit of the institution’s mission and students and will promote the security, stability, and economic vitality of the United States. A covered institution that has entered into a contract pursuant to a waiver issued under this section, the term of which is longer than the 1-year waiver period and the terms and conditions of which remain the same as the proposed contract submitted as part of the request for such waiver, may submit, not later than 120 days before the expiration of such waiver period, a request for a renewal of such waiver for the remainder of the contract term, but not to exceed a 4-year period (which shall include any information requested by the Secretary). If a covered institution fails to submit a request under clause
(i)or is not granted a renewal under such clause, such institution shall terminate such contract on the last day of the original 1-year waiver period. The Secretary of Defense— not later than 60 days before a covered institution enters into a contract pursuant to a waiver request under paragraph (2)(A), or before a contract described in paragraph (2)(B)(i) is renewed pursuant to a renewal request under such paragraph, shall notify the covered institution— if the waiver or renewal will be issued by the Secretary; and in a case in which the waiver or renewal will be issued, the date on which the 1-year waiver period starts; may only issue a waiver under this subsection to a covered institution if the Secretary of Defense determines that the contract for which the waiver is being requested will both— benefit the institution’s mission and students; and promote the security, stability, and economic vitality of the United States; and shall, when making the determination described in subparagraph (B)(ii), base such determination on the following factors: The reasons for which the foreign entity of concern or covered nation has been so designated, and why those reasons do not apply to the contract for which waiver is being sought. The foreign entity of concern or covered nation’s history of involvement with covered institutions. The degree to which such a contract could provide access to information or technology which could materially benefit the national security of a covered nation or harm the national security of the United States. Not later than 15 calendar days prior to issuing a waiver under this subsection, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives written notice of the intent of the Secretary to issue such waiver together with a justification for such waiver. A waiver issued under this subsection to a covered institution with respect to a contract shall only— waive the prohibition under subsection
(a)for a 1-year period, or for the remainder of the term of the contract, but not to exceed 4 years; and apply to the terms and conditions of the proposed contract submitted as part of the request for such waiver. In the case of a covered institution that entered into contract with a covered nation or foreign entity of concern prior to January 1, 2027, and which contract remains in effect on such date, the Secretary shall notify the congressional defense committees within 90 days of enactment of this Act. A covered institution that has entered into a contract described in paragraph (1), the term of which is longer than the waiver period described in subparagraph
(B)of such paragraph and the terms and conditions of which remain the same as the contract submitted as part of the request required under subparagraph
(A)of such paragraph, may submit a request for renewal of the waiver issued under such paragraph in accordance with subsection (c)(2)(B). In the case of a covered institution that enters into a contract with a foreign source that is not a covered nation or a foreign entity of concern but which, during the term of such contract, is redesignated as a covered nation or foreign entity of concern, such institution shall terminate such contract not later than 120 days after the Secretary notifies the covered institution of such designation or immediately requests a waiver. Any information required to be disclosed under this section with respect to a contract that is not in English shall be translated, for purposes of such disclosure, by a person that is not an affiliated entity or agent of the covered nation or foreign entity of concern involved with such contract. Each covered institution applying for a waiver under subsection (c), shall identify a compliance officer, who shall— be a current employee or legally authorized agent of such institution; and be responsible, on behalf of such institution, for personally certifying— compliance with the prohibition under this section; and the truth and accuracy of any information contained in such a waiver request. Section 1286(f) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 10 U.S.C. 4001 note) is amended— in paragraph (1), by striking and on the periodic reviews conducted pursuant to subsection
(e)and inserting , on the periodic reviews conducted pursuant to subsection (e), and the waivers issued under section 216 of the National Defense Authorization Act for Fiscal Year 2026 ; and in paragraph (2), by adding at the end the following new subparagraph: With respect to waivers described in paragraph (1), the following: The terms and contents of any waivers issued under section 216 of the National Defense Authorization Act for Fiscal Year 2026 in the period covered by the report; any trends in— the number of waivers issued under such section over time; and the types of contracts to which such waivers pertain; and the processes used by the Secretary to verify that covered institutions (as defined in such section) are in compliance with the requirements of such section. . In this section: Except as provided in subparagraph (B), the term contract means— any agreement or memorandum of understanding for the acquisition, by purchase, lease, or barter, of property or services by or from a covered nation or foreign entity of concern; or any affiliation, agreement, or similar transaction with a covered nation or foreign entity of concern that involves the use or exchange of the name, likeness, time, services, or resources of a covered institution. The term contract does not include— an agreement solely or primarily for the purposes of conducting a study-abroad program wherein students at covered institutions in the United States travel to a covered nation to study; an arms-length agreement for the acquisition by purchase, lease, or barter of property or services for the covered institution from a foreign entity of concern; or an agreement pertaining to a pre-existing campus or other satellite facility of a covered institution located in a covered nation or a joint facility of a covered institution and another entity located in a covered nation, unless that facility could provide access to information or technology which could materially benefit the national security of a covered nation or harm the national security of the United States. The term covered institution means an institution of higher education that conducts research funded by the Department of Defense. The term covered nation has the meaning given that term in section 4872(d) of title 10, United States Code. The term foreign entity of concern means any person or entity— listed on the Department of Commerce's Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations), or successor list; included in the list of Chinese military companies operating in the United States most recently submitted under section 1260H(b)(1) of the William M.
(Mac)Thornberry National Defense Authorization Act for Fiscal Year 2021 ( Public Law 115–283 ; 10 U.S.C. 113 note); or identified on the list published under section 1286(c)(9)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 10 U.S.C. 4001 note). The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ).
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Sec. 216
Prohibition on contracts between certain foreign entities and institutions of higher education conducting Department of Defense-funded research
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