Administering a Global Portfolio: Challenges in Managing International Projects Cheryl George, Kara Amoratis, Sue Wiedemer ACOR Retreat September 5, 2012

As Universities Expand Abroad, Risks & Obligations Do As Well To meet the needs of INTERNATIONALIZATION.. increased activity abroad and at home new types of activity increased travel risk increased host country requirements and enforcement increased USG reporting and compliance obligations...administrative coordination is essential 2

Internationalization Means New Activities International operations support structure needs to be nimble and centrally coordinated to meet new needs at home and abroad. Research collaboration is becoming more complex Collaborative degrees present new issues for accreditation and matriculation Faculty are staying abroad longer and getting more involved Non-U.S. funding sources Independent student travel for research and internships Faculty-led small group travel is increasing Destinations are more diverse and may present new risks 3

Increased Host Country Engagement Host countries are becoming more thorough in enforcing disclosure, labor, tax and registration requirements. Cannot assume U.S. non-profits will be exempt in foreign countries U.S. educational institutions sued for employee benefits New registration rules in many countries Bahrain, Venezuela, Sudan, Egypt and Iran have recently tightened registration requirements .and fines and penalties (including imprisonment) can be costly, and imposed personally upon individual employees. 4

Increased U.S. Government Reporting Requirements New USG requirements have had a great impact on data collection efforts. IRS Form 990, Schedule F and R Foreign Bank Account Reports (FBAR) Higher Education Act of 1965 Department of Commerce BE-125 Report IRS Form 5713 (International Boycott Report) Federal Funding Accountability and Transparency Act Dept. of Commerce - Bureau of Industry and Security Form BIS 621P Clery Act Application to Education Abroad . and many U.S. institutions are just becoming aware of this. 5

Compliance Needs You must have an administrative structure that supports U.S. regulatory compliance... Export Controls Office of Foreign Asset Control Anti-Boycott Laws Foreign Corrupt Practices Act . as evidenced by increased auditing and government oversight in nearly every region of the world. 6

Compliance Needs And you must have an administrative structure that supports foreign country legal compliance... Better tracking of activities abroad More nimble process for providing operations support abroad Clear process for assessing, in advance, costs of in-country compliance for proposed activities Promote better understanding of the implications of certain types of activities abroad. . to avoid liability, penalties or under-prediction of project costs. 7

Global Operations Infrastructure Task Force Charged November 2010 Led by Peter Schiffer & Dave Richardson Recommendations: Form WGGOS Resolve 42 identified issues Create a website Audit current international activities Recommend a data collection tool Charged November 2010 Led by Peter Schiffer & Dave Richardson Recommendations: Form WGGOS Resolve 42 identified issues Create a website Audit current international activities Recommend a data collection tool

Working Group for Global Operations Support Charged April 2011 Standing committee with members from: Finance & BusinessGlobal Programs Sponsored ProgramsMedical School Research ProtectionsRisk Management Information TechnologyFaculty General CounselHuman Resources Working Group for Global Operations Support Charged April 2011 Standing committee with members from: Finance & BusinessGlobal Programs Sponsored ProgramsMedical School Research ProtectionsRisk Management Information TechnologyFaculty General CounselHuman Resources Form WGGOS

WGGOS Sub-groups: 1)Travel security/preparation 2)Legal issues 3)Financial operations 4)Research integrity/Medical operations 5)Academic issues 6)Export control compliance WGGOS Sub-groups: 1)Travel security/preparation 2)Legal issues 3)Financial operations 4)Research integrity/Medical operations 5)Academic issues 6)Export control compliance Resolve Issues

Travel Security/Preparation Review travel restriction policies for all groups Assess pre-departure preparation for non-EA groups Clarify and publicize insurance for all Clarify emergency preparedness for all Draft data privacy/laptop guidelines Provide travel resources Review travel restriction policies for all groups Assess pre-departure preparation for non-EA groups Clarify and publicize insurance for all Clarify emergency preparedness for all Draft data privacy/laptop guidelines Provide travel resources

Legal Issues Resolve controlling law and translation policy for international agreements Adopt agreements approval process Assess guidelines on prohibited parties/embargoed countries Assess compliance needs for currency, financial, banking regulations Provide advice for compliance with FCPA Resolve controlling law and translation policy for international agreements Adopt agreements approval process Assess guidelines on prohibited parties/embargoed countries Assess compliance needs for currency, financial, banking regulations Provide advice for compliance with FCPA

Financial Operations Address hiring, procurement and leasing abroad Draft advice on banking and funds transfer Draft advice on equipment transfer Address Anti-boycott laws and other tax reporting issues Assess expense-reporting policies abroad Assess overhead rates abroad Address cost allocation for consultants Address hiring, procurement and leasing abroad Draft advice on banking and funds transfer Draft advice on equipment transfer Address Anti-boycott laws and other tax reporting issues Assess expense-reporting policies abroad Assess overhead rates abroad Address cost allocation for consultants

Research Integrity/ Medical Operations Clarify research integrity process (IRB, etc) for research collaboration with non-U.S. partners Draft guidelines on endangered species, import/export of wildlife and plants, DNA Draft cultural property advice, provide resources Review clinical research policies for application abroad Clarify research integrity process (IRB, etc) for research collaboration with non-U.S. partners Draft guidelines on endangered species, import/export of wildlife and plants, DNA Draft cultural property advice, provide resources Review clinical research policies for application abroad

Academic Issues Review provisions for graduate and post-doc exchanges Clarify faculty exchange policies Consider what additional policies are needed for research information sharing Review provisions for graduate and post-doc exchanges Clarify faculty exchange policies Consider what additional policies are needed for research information sharing

Export Control Compliance Assess current compliance infrastructure Consider broader access to compliance software (Visual Compliance) Establish communications guidelines for research collaboration Assess guidelines for labs and facilities Establish language for collaboration agreements Assess current compliance infrastructure Consider broader access to compliance software (Visual Compliance) Establish communications guidelines for research collaboration Assess guidelines for labs and facilities Establish language for collaboration agreements

Global operations guidance in one place Housed with Global Program websites Link to other websites Provide Contacts for Answers Global operations guidance in one place Housed with Global Program websites Link to other websites Provide Contacts for Answers Create a Website

U.S. reporting requirements Compliance requirements Travel security for all constituents Managing institutional risk Strategic tracking for better support/coordination U.S. reporting requirements Compliance requirements Travel security for all constituents Managing institutional risk Strategic tracking for better support/coordination Information Collection Needs

Use current sources of information? SIMSDevelopment database ERSIntellectual property database Travel onLionAgreements database IBISISFVS database ISIS Data WarehouseRM Groups database Global Reach PortalInformation requests Use current sources of information? SIMSDevelopment database ERSIntellectual property database Travel onLionAgreements database IBISISFVS database ISIS Data WarehouseRM Groups database Global Reach PortalInformation requests Data Collection Snapshot

Pre-Travel Registries Undergraduates only Undergraduates, credit program only Faculty, staff and students recommended Faculty, staff and students mandatory Research and Activity Registries Mandatory for certain international activity/ voluntary Data Flagging for IRS 990 Reporting Annual survey Pre-Travel Registries Undergraduates only Undergraduates, credit program only Faculty, staff and students recommended Faculty, staff and students mandatory Research and Activity Registries Mandatory for certain international activity/ voluntary Data Flagging for IRS 990 Reporting Annual survey Benchmarking

Boston University Duke University George Washington University Harvard University Michigan State University Stanford University University of Michigan University of Minnesota University of Pennsylvania Yale University Boston University Duke University George Washington University Harvard University Michigan State University Stanford University University of Michigan University of Minnesota University of Pennsylvania Yale University Peer Institutions

Penn State Options Being Considered Travel registry mandatory for students Faculty/staff: Self-reporting enforced by colleges/departments or Mandatory central registry with 4 questions & Annual/quarterly survey to follow-up Comprehensive travel insurance Travel registry mandatory for students Faculty/staff: Self-reporting enforced by colleges/departments or Mandatory central registry with 4 questions & Annual/quarterly survey to follow-up Comprehensive travel insurance

Operations Abroad Sue Wiedemer, Associate Controller Logistical guidelines for operating abroad Legal issues of operating abroad Sue Wiedemer, Associate Controller Logistical guidelines for operating abroad Legal issues of operating abroad

Establishing Operations Abroad Getting Established Abroad Foreign Bank Accounts and Transfers Employment and Hiring Abroad Procurement, Leasing, and Renting Abroad Transfer of Materials and Equipment Abroad Getting Established Abroad Foreign Bank Accounts and Transfers Employment and Hiring Abroad Procurement, Leasing, and Renting Abroad Transfer of Materials and Equipment Abroad

1)Work through an in-country partner; 2)Retain a third-party provider; 3)Establish Penn State entity in-country to: -comply with applicable laws -accommodate payroll services 1)Work through an in-country partner; 2)Retain a third-party provider; 3)Establish Penn State entity in-country to: -comply with applicable laws -accommodate payroll services Must have approval from Controller & GC Getting Established Abroad

1)Several options available 2)Contact FO prior to travel (as early as possible) -discuss best options -make arrangements 1)Several options available 2)Contact FO prior to travel (as early as possible) -discuss best options -make arrangements Foreign Bank Accounts & Transfers

1)Hiring non-U.S. citizens overseas complex and requires robust infrastructure to: -comply w/ local tax, labor laws -adhere to reporting procedures -provide payroll services 2)All hiring to be cleared prior to employment 3)Long-term arrangements to be reviewed by Penn States Director of Payroll & Tax Services 1)Hiring non-U.S. citizens overseas complex and requires robust infrastructure to: -comply w/ local tax, labor laws -adhere to reporting procedures -provide payroll services 2)All hiring to be cleared prior to employment 3)Long-term arrangements to be reviewed by Penn States Director of Payroll & Tax Services Must have approval from Controller & GC Employment & Hiring Abroad

1)May require special processes 2)Contact FO -consider transactional needs in advance -discuss plans 1)May require special processes 2)Contact FO -consider transactional needs in advance -discuss plans Procurement, Leasing & Renting

Federal Law may require special licensing or reporting for: export-controlled materials; shipments over $2,500; some international destinations (Cuba, Iran, North Korea, Sudan, Syria); specific items (rough diamonds) Federal Law may require special licensing or reporting for: export-controlled materials; shipments over $2,500; some international destinations (Cuba, Iran, North Korea, Sudan, Syria); specific items (rough diamonds) Transfer of Materials & Equipment

Operations Abroad Cheryl George, Export Compliance Officer Export Control Guidelines Research Collaboration Concerns Cheryl George, Export Compliance Officer Export Control Guidelines Research Collaboration Concerns

Working with International Colleagues Export Control Laws Restricted Countries, Persons, and Entities Anti-Boycott Laws Payments and Gifts to Foreign Officials Research Collaboration Export Control Laws Restricted Countries, Persons, and Entities Anti-Boycott Laws Payments and Gifts to Foreign Officials Research Collaboration

Export Control Laws: - control the export of certain technologies, software, hardware - regulate the transfer of items, technology, software, services - apply to ALL activities with foreign persons and countries Export Control Laws MAY restrict: - foreign nationals from participating in research - University personnel from providing services (including training) to foreign nationals - shipment of equipment, parts, technology or software to foreign countries - the ability to collaborate with researchers in foreign countries Export Control Laws: - control the export of certain technologies, software, hardware - regulate the transfer of items, technology, software, services - apply to ALL activities with foreign persons and countries Export Control Laws MAY restrict: - foreign nationals from participating in research - University personnel from providing services (including training) to foreign nationals - shipment of equipment, parts, technology or software to foreign countries - the ability to collaborate with researchers in foreign countries Export Control Laws

This program scans 70 different federal sites to search for individual names and organizations that are being watched by the federal government because of actions that oppose U.S. security and economic interests. Export Control Laws

Anti-boycott laws are handled through the Office of Anti-boycott Compliance (OAC) under the Bureau of Industry and Security (BIS). http://www.bis.doc.gov/complianceandenforcement/index.htm#oac Export Control Laws

Payments and gifts to foreign officials..is that illegal? U.S. Department of Justice United States Attorney's Office District of Columbia (202) 514-6933 Chiquita Brands International, Inc., Pleads Guilty to Making Payments to a Designated Terrorist Organization and Agrees To Pay a $25 Million Fine Export Control Laws

International research collaborations cannot claim the fundamental research exemption. Must have an export review because it is important to know who we are collaborating with. It is also important to know what we will be shipping or creating and sending abroad A license could be necessary before we send technologies abroad. Export Control Laws

Penn States Export Control web pageExport Control web page Laptops and Cell Phones Abroad (Global Operations website)Global Operations website Penn States Export Control ManualExport Control Manual Penn States Export Control Policy RA18Policy RA18 Penn States Export Control Policy RAG11Policy RAG11 General Counsels Advisory on Export Control: Explanation of Impact of Fundamental Research Exclusion General Counsels Advisory on Export Control: Explanation of Impact of Fundamental Research Exclusion Penn States Export Control web pageExport Control web page Laptops and Cell Phones Abroad (Global Operations website)Global Operations website Penn States Export Control ManualExport Control Manual Penn States Export Control Policy RA18Policy RA18 Penn States Export Control Policy RAG11Policy RAG11 General Counsels Advisory on Export Control: Explanation of Impact of Fundamental Research Exclusion General Counsels Advisory on Export Control: Explanation of Impact of Fundamental Research Exclusion Export Control Laws: Resources

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Administering a Global Portfolio: Challenges in Managing International Projects Cheryl George, Kara Amoratis, Sue Wiedemer ACOR Retreat September 5, 2012