Universities in England must report any funding from foreign individuals and organizations in a proposed amendment to the Free Speech Act.
The government says the plan will prevent “foreign actors” from exercising undue influence.
Universities are expected to share details of financial arrangements from certain countries like China.
They face fines or other consequences if a risk to freedom of expression is perceived.
Funding in excess of £75,000 must be reported to the Office for Students so they can report any concerns.
Funds from NATO and EU countries as well as from countries listed in the Academic Technology Approval Scheme, such as Japan or Australia, are excluded.
It follows concerns from MPs that universities are not recognizing the seriousness of certain countries’ interference.
In 2019, a report by the Foreign Affairs Committee highlighted concerns about China’s influence on universities, including coordinated efforts to block mentions of “China-sensitive issues” such as the 1989 Tiananmen Square protests.
Universities UK, which represents 140 universities across the UK, said academic freedom and freedom of speech are central to how universities work. She urges the government to “take an appropriate, risk-based approach to this issue.”
“We are still seeking clarification from the government on issues such as the protection of commercially sensitive information, reporting thresholds and the definition of key terms in the amendment,” it said.
A new role of Director of Freedom of Speech and Academic Freedom will oversee the new law once it is passed.
University Minister Michelle Donelan said: “It is right that we are taking new measures to protect our universities from undue foreign influences that go against British values - this is a bill the rest of the world will take notice of.”
Ms Donelan added that it was important to address these important issues and “ensure we remain one of the most academically free countries in the world”.
There will also be suggestions that security costs for on-campus events are not passed on to universities, colleges and student unions to prevent backdoor no-platforming.
The government said it comes after Bristol University students’ union allegedly asked a student union for £500 for security so the Israeli ambassador could give a lecture, but would not require anything from his Palestinian counterpart to do the same.
A spokesman for the National Union of Students said there was no evidence of a free speech crisis on campus.
“We do not believe that external speaking events should be canceled because a society feels it cannot afford the security costs,” the spokesman said.
“It is deeply disappointing that the government has rejected changes whereby student unions will be funded to take on the new tasks imposed on them.
“Instead, they discourage future off-campus speaker events by suggesting that unsupported student unions should face potentially large financial commitments.”
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