If a company is owned or controlled by a foreign entity, a Special Security Agreement (SSA) can be used to mitigate foreign ownership, control or influence (FOCI). Although the implementation is longer and heavier than the OPC mitigation measures mentioned above, the Special Security Agreement (SSA) is a popular choice. It can mitigate security risks related to foreign ownership or 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 disadvantages of the Special Security Agreement is that it limits the types of classified national security information that the company can access. According to the Council resolution, the least restrictive foCI mitigation agreement is the Safeguards Agreement (SCA). Many years ago, the Security Screening Agreement (SLA) was more popular than the extremely restrictive Voting Trust Agreement (VTA). Today, however, the voting trust agreement has fallen into disuse – likely due to the extent of its implementation for businesses – and the security screening agreement is now the least used foCI mitigation action plan. While the Security Screening Agreement (TISA) is now the least widely used tool to mitigate security risks related to foreign ownership, control or influence (OFAC), this is not really because the APF is not desirable. Rather, the relative unpopularity of the security control agreement is due to the fact that the companies covered by the FOCI are often owned or controlled by a foreign entity, which does not diminish the SCA.

A variant is a Special Security Agreement (SSA), in which the company`s board of directors can be composed of both U.S. citizens and nationals of the parent company`s country. In this case, when national security issues are discussed, only U.S. managers can participate. THE SSAs require that businesses be managed under U.S. law and by U.S. citizens. [1] In May 2006, the CEO of BAE Systems described the « firewall » status of BAE`s US subsidiary, BAE Systems Inc.: « British management, myself included, can see the financial results; but many areas of technology, products and programs are not visible to us. The SSA effectively allows us to operate in the United States as an American company, offering the highest level of security and integrity in some of the most sensitive areas of national security. [2] We can advise on a client`s options and recommend an action plan to mitigate homes and maintain eligibility for a facility security clearance.

We also refer our clients to qualified candidates for external director, fiduciary or agent positions. In addition to one of the UCI mitigation measures mentioned above, companies operating under the CIV are generally also required to implement an Electronic Communications Plan (ECP). Since plans for electronic communications are usually the most tedious and resource-intensive measures to implement, we have dedicated another page to this topic. An agent is a requirement imposed on foreign investors who wish to acquire certain U.S. companies under a power of attorney agreement between the U.S. Department of Defense Security Service. This is done for national security reasons and applies mainly to defense contractors involved in top-secret contracts. The power of attorney agreement is between the foreign company, the U.S. subsidiary that holds classified contracts, and the DSS. If a foreign-owned, controlled or influential (FOCI) company has a security clearance for facilities, niSPOM`s clause 2-303 requires the company to implement an action plan to mitigate the security risk posed by foreign ownership, control or influence (FOCI). NiSPOM describes a number of these action plans to reduce MUTUAL Funds.

If a foreign-owned or controlled company objects to the restrictions on its access to classified information that the SSA would impose, it could request the use of a proxy agreement or a voting rights agreement. However, foreign investors may object to the use of this proxy agreement or this voting trust agreement because these mutual fund mitigation plans deprive foreign investors of much of the control over the company. Therefore, these are less popular options than the special security agreement. A board resolution is the most commonly used foCI mitigation tool. It is the least restrictive for the operation of the company and easy to implement. However, if the foreign company owns the company or can appoint a representative to the company`s board of directors, one of the most restrictive MUTUAL fund mitigation measures below must be applied. An agent is a body composed exclusively of U.S. citizens who are responsible for the day-to-day operation of business. In this way, the company`s classified information is « isolated » from foreign exploitation, but the parent company still benefits from the profits of its subsidiary. .