Foreign Entity Reporting FAQs

What is a foreign source?

A foreign source is one of the following:

A foreign government including an agency of a foreign government
A legal entity, governmental or otherwise, created solely under the laws of a foreign state or states
An individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof
An agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source

How do you determine the country of attribution for a foreign source?

The country to which a fit or a contract is attributable “is the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the country of incorporation, of if unknown, the principal place of business, for a foreign source which is a legal entity.”

What does it mean to have a gift or contract restricted or conditional?

A gift or contract is considered “restricted or conditional” if it includes one of the provisions below:

It involves the employment, assignment, or termination of faculty; This includes having a principal investigator assigned to the project
It involves the establishment of departments, centers, research or lecture programs, or new faculty positions
It involves the selection or admission of students. This will include tuition for specific students.
It involves the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion. This will include tuition for students from a specific country.

On restricted gifts or contracts, can we aggregate transactions for reporting purposes?

If the restriction is from the same foreign source for payment of tuition and related fees for students from a specific country, the items can be aggregated. Otherwise each transaction must be reported separately.

I am not sure whether the contract or gift is from a foreign entity. Do I need to report it?

We are required to conduct “reasonable due diligence” to make the determination if the contract or gift is from a foreign entity. This includes making a good faith effort to gather information directly from a counterparty or through independent research. If it is then determined the contract/gift is from a foreign entity it must be reported.

I received a small gift that is considered a de minimis item. Is this reportable?

Yes. Per the Department of Education, even de minimis items are reportable.

I am expecting a gift from a foreign entity. When do I report it?

It is reported at the time it is received.

A foreign entity has pledged to give a donation over the next five years. Do I report the full amount or only the amount received?

Only the portion of a pledged gift that is actually received is reportable.

I have a foreign student whose tuition is paid by their foreign parents. Is this reportable?

No. Tuition payments made on behalf of a student with no restrictions is not reportable.

We receive from a foreign entity funds to pay for tuition of all students from their country. Is this reportable?

Yes. If there is a scholarship, grant, contract, or other mechanism that pays tuition to students with conditions (e.g., based on country of origin, taking foreign language classes, or matching a particular major), then these funds are reportable.

One of my students stated their student club received funding from a foreign source. Is this reportable?

For any gifts and contracts received directly by an organization outside of direct control of UNM including alumni associations, booster clubs, and student clubs, it must be determined if UNM benefits from the transaction. If UNM benefits, then it is reportable. If UNM does not benefit, it is not reportable.

We are receiving equipment from a foreign entity in order to do specific research. Is this reportable?

If the equipment will be titled to UNM, yes, the fair market value of the equipment must be reported.

I need to purchase a piece of equipment that is only offered from a foreign country. Do I need to report the purchase?

Contracts involving purchases from foreign sources are generally considered “money-out” arms-length transactions and are not reportable. If the transaction is well below market value, then it may be reportable as it may be considered not an arms-length transaction. Each transaction should be reviewed to determine if it is an arms-length transaction or not.

My department received materials from a foreign source. Is this reportable?

Yes, any items received must be reported whether cash, materials, equipment, or gifts.

I received an intellectual property license fee from a foreign licensee of a University patent or data or materials that is to be transferred to UNM for use in research. Is this reportable?

Yes.

I received a contract/grant from a foreign country. Do I need to report it?

If the contract/grant went through either Health Science’s Sponsored Projects Office or Main Campus’s Contract & Grant Accounting, no. These offices report all contracts and grants from foreign entities that go through their offices. If the contract/grant did not go through these offices, then yes, you must report the activity.

I have received financial support twice from the same foreign entity. Do I do one report or two?

You should report each item separately. Section 117 and NSF Reporting have different requirements which requires us to see each financial support item separately.

I have financial support that covers multiple years. Do I report just the current year’s amount or the full amount?

If the financial support is not from a foreign country of concern, then you report the full amount expected when the agreement of the support is entered into. No additional reporting is required unless the amount changes which is considered a modification to the report. If the financial support is from a foreign country of concern, you will report the full expected amount at the time when the agreement is entered into as well as the actual obligated/received amount each time the obligated/received amount changes.

I am not sure what the full amount of the financial support will be. What do I report?

The contract should be valued when it is signed/initiated. You should use a reasonable valuation methodology based on the information at that time. For example, if a contract is received for $100,000 but it is expected the total amount received will be $350,000, then $350,000 is the reportable amount.

I have a change in the amount reported. What do I do?

If the amount has materially changed or will take the full amount over $50,000, then a modification of the report is required in the reporting form. If the additional funding comes under a separate contract, then the additional funding is considered a separate transaction and must be reported as a new transaction.

I am not sure of the contact information for the gift or support. What do I do?

It is required that we do our due diligence to obtain all necessary information. You must show good faith effort of trying to obtain the information.

What is a modification versus new reporting?
If you have already reported the gift/contract, but the dollar amount has changed, then it is a modification. Please be clear what is being modified for reporting purposes.

The foreign entity or individual does not want their information publicized. Can we not report the gift or financial support?

We are required by law to report the gift or financial support. Unless otherwise required by law, the foreign source names and addresses other than the country will be withheld in the public disclosure report.

The foreign donor of a gift wants to remain anonymous. Is this possible?

We are required to do due diligence to obtain the identity including the country of the donor.

I did not receive the gift or financial support directly from the foreign country but from a representative who lives and works in the United States. Do I need to report it?

Yes. We must report any activity that comes from a counterparty who is acting as an agent of a foreign source.

The gift/contract is from a multinational company or a U.S. entity with a foreign parent company. Is it reportable?

It is reportable if the counterparty is acting as an agent of a foreign source. Evaluate the degree to which the foreign parent or affiliate(s) exercise control over the entity. Consider the formal relationship between parties. Also consider the practical realities of how the parties interact based on direction, supervision, or management by the foreign entity. This includes both in general and in the context of the specific gift/contract. It is your responsibility to exercise reasonable due diligence. This can include consulting public records, considering the indemnification clause and other information in a specific contract/agreement, and directly asking the counterparty.

The gift/contract is from a foreign subsidiary of a US-based corporation or parent company. Is it reportable?

If the foreign subsidiary of a US-based corporation fits the definition of a foreign legal entity, then yes.