Special Security Agreement Foci

Under the Board`s decision, the least restrictive FOCI reduction agreement is the Security Control Agreement (SCA). Many years ago, the Security Control Agreement (SCA) was more popular than the highly restrictive Voting Trust Agreement (VTA). Today, however, the Voting Trust Agreement has fallen out of service – most likely due to the offense of its implementation for businesses – and the Security Control Agreement is now the least used FOCI reduction action plan. Although the Security Control Agreement (SCA) is today the least widely used instrument to reduce the security risks of Foreign Ownership, Control, or Influence (FOCI), it is not really because the SCA is undesirable. Rather, the relative unpopularity of the security screening agreement is explained by the fact that FOCI`s companies are often owned or controlled by a foreign entity, which does not mitigate the SCA. If a company is owned or controlled by a foreign entity, a special security agreement (SSA) can be used to reduce foreign ownership, control or influence of Foreign Ownership, Control or Influence (FOCI). Although the implementation is longer and more complicated than the mitigation measures mentioned above, the Special Security Agreement (SSA) is a popular choice. It can reduce security risks to foreign ownership or foreign control and allow the foreign company to appoint representatives to the company`s board of directors, which the more restrictive proxy agreement (PA) and the Voting Trust Agreement (VTA) do not allow. However, one of the drawbacks of the special security agreement is that it provides restrictions for the types of secret national security information that the company can access. When a foreign owned, controlled or influential enterprise (FOCI) has a security clearance for the facilities, NISPOM Clause 2-303 requires the company to implement an action plan to reduce the security risk posed by Foreign Ownership, Control, or Influence (FOCI).

NISPOM describes a number of these action plans to reduce FOCI. We can discuss a customer`s options and recommend an approach to mitigate the FOCI and maintain the authorization to release the security of the facility. We also refer our clients to qualified candidates for director, agent or proxy positions. In addition to one of the mitigation measures mentioned above, companies active under FOCI are generally required to implement an Electronic Communication Plan (ECP). Since electronic communications plans are generally the most laborious and resource-intensive guidelines to implement, we have devoted another page to this issue. An advisory resolution is the most widely used FOCI mitigation instrument. It is the least restrictive for the company`s activity and easy to implement. However, if the foreign company owns the business or can send a representative to the company`s board of directors, one of the most restrictive FOCI mitigation measures must be applied. If a foreign-controlled or foreign-controlled company objects to restrictions on access to classified information imposed by the SSA, it could request the use of a proxy agreement or voting trust agreement….



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