Foreign Ownership, Control or Influence (FOCI) | The Committee for Foreign Investment in the United States (CFIUS)
Foreign entities wishing to invest in the defense, aerospace or intelligences sectors of the US defense industry must generally satisfy the requirements of both the Defense Security Service (DSS) and the Committee on Foreign Investment in the United States (CFIUS).
DSS considers a US company to be under Foreign Ownership, Control or Influence (FOCI) when a foreign interest has the power, whether direct or indirect, whether exercised or potential, to make decisions affecting the management or operation of the company in a manner that may result in the unauthorized access to classified information or may adversely affect the performance of a classified contract.
Before coming under FOCI, US companies in the classified space must submit a “FOCI Action Plan”. The purpose of the plan is to propose a strategy for FOCI mitigation, and the company has a number of tools with which to accomplish this goal, including Board Resolutions, Security Control Agreements (SCA), Special Security Agreements (SSA), Proxy Agreements, and Voting Trust Agreements (VTA).
CFIUS is an inter-agency committee authorized to review transactions that could result in control of a US business by a foreign person (“covered transactions”), in order to determine the effect of these transactions on US national security. The CFIUS process has undergone significant reforms over the past few years. And the FOCI mitigation and CFIUS review process often run in parallel.
c2’s professionals counsel for a proactive and responsive collaboration between our clients, the DSS, and CFIUS. Early and frequent communication reduces the risk of delay and enables an expedient approval of the FOCI Action Plan and a favorable CFIUS review. We assist our clients from beginning to end of the FOCI-mitigation and CFIUS-review processes. Our capabilities include each of the following:
- Development of a fully compliant and compelling mitigation and review plan;
- Early and constant strategic engagement with both agencies;
- Negotiation and development of Board Resolutions, Security Control Agreements (SCA), Special Security Agreements (SSA), Proxy Agreements, and Voting Trust Agreements (VTA);
- FOCI mitigation and plan implementation;
- Development and organization of a Government Security Committee (GSC);
- Development and organization of a Government Security and Compliance Committee (GSCC);
- Obtaining a National Interest Determination (NID); and
- Preparation for annual DSS FOCI meetings.
Most law firms lack the industry-specific, industrial security experience to properly and efficiently design, negotiate, and implement FOCI mitigation and facilitate CFIUS review. Our professionals—industry insiders, specialized attorneys, and industrial security experts—have the right combination of insight, experience, and subject matter expertise to satisfy the requirements of the DSS and the CFIUS and enable investment success.
Outside Directors | Proxy Holders | Voting Trustees
Where our professionals have had no prior involvement with your company, the entities with which it is affiliated or any foreign owner, we may be available to serve as DSS-approved proxy holders, voting trustees, or Outside Directors.
In these roles, we deploy a unique combination of personal integrity, business acumen, industrial security expertise, and sector insight to help you achieve your goals.