Participating in research requires complying with multiple regulatory frameworks. Participating in research with a foreign company or collaborating on a research project with a colleague employed by an institution or entity outside of the U.S. may require additional compliance considerations. Many health care providers and academicians outside of the U.S. are considered “Foreign Government Officials” under the Foreign Corrupt Practices Act (“FCPA”). Non-compliance with the FCPA can lead to civil and criminal penalties. The FCPA is jointly enforced by the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”) and both agencies have been actively pursuing FCPA violations by companies in the life sciences industry in recent years.
In addition, research that involves the transfer of certain information or technology outside of the U.S. may require compliance with Export Controls regulations. It’s helpful to have processes and procedures in place to comply with the FCPA and Export Controls regulations if your organization engages in research activities outside of the U.S.
Of note, the FBI and the DOJ have been actively engaging and prosecuting researchers who are providing confidential information to foreign governments and foreign nationals in violation of the terms of their funding agreements. The Van Andel Research Institute recently entered into a $5.5 million settlement for alleged False Claims Act (“FCA”) violations in what is seen as a warning to research institutions to make sure they have a compliant program and have appropriate oversight over the work researchers are engaging in and that appropriate disclosures are being made about funding for research. This settlement is the first time the DOJ has used the FCA as tool to address foreign influence against a research institution.
The FCA allows the federal government to pursue treble damages against parties that submit “false claims” to the government or make “false statements” that lead to the submission of false claims. 31 U.S.C. §§ 3729 et seq. The DOJ can use this remedy to recover grant funding and a multiplier of damages for failure to disclose foreign research funding during the NIH grant or renewal process.
Recent government actions highlight the need for increased proactive review of policies and procedures by grantee institutions to make sure all disclosures to NIH and other public funding sources are truthful, and that institutions can respond to any government inquiries about its activities.