The following guidance is provided regarding the below FOCI mitigation instruments (please reference NISPOM, paragraph 2-303):
The following DSS FOCI mitigation instruments are designed to provide a general overview of items covered in an actual agreement. Actual mitigation instruments will vary in content from the templates as mitigation customization may be required by DSS based on the unique needs of each business entity. Should you have any questions, please contact your respective Industrial Security Representative or the FOCI Operations Division here.
The Board Resolution may be used when the foreign entity does not own voting stock sufficient to elect a representative to the company's governing board. (EXAMPLE: A British national owns 10% of the company's voting stock and that 10% stock ownership does not allow the British National to appoint a representative to the company's board of directors).
The Security Control Agreement (SCA) may be used when the cleared company is not effectively owned or controlled by a foreign entity and the foreign interest is entitled to representation on the company's governing board. (EXAMPLE: A Danish corporation owns 25% of the cleared company's voting stock and that 25% ownership allows the Danish corporation to appoint a representative(s) to the company's governing board). There are no access limitations under a SCA.
The Special Security Agreement (SSA) may be used when a company is effectively owned or controlled by a foreign entity. Access to proscribed information (TS, SCI, SAP, COMSEC or RD) by a company cleared under a SSA may require that the Government Contracting Activity complete a National Interest Determination to determine that the release of proscribed information to the company shall not harm the national security interest of the United States. The SCA and SSA are similar agreements in the respect that they:
Download Word Doc
The Proxy Agreement (PA) and Voting Trust Agreement (VTA) may be used when a cleared company is effectively owned or controlled by a foreign entity. The PA and VTA are substantially identical arrangements whereby the voting rights of the foreign owned stock are vested in cleared US citizens approved by the Federal Government (DSS). Neither arrangement imposes any restrictions on the company's eligibility to have access to classified information or to compete for classified contracts.
The difference between the Proxy Agreement and the Voting Trust Agreement is that under the Voting Trust Agreement the foreign owner transfers legal title in the company to the Trustees that are approved by DSS.
Comparison: Special Security Agreement & Proxy Agreement
PA: Download Word Doc
VTA: Download Word Doc