Foreign Ownership, Control or Influence (FOCI)

Foreign investment can play an important role in maintaining the vitality of the U.S. industrial base. Therefore, it is the policy of the U.S. Government to allow foreign investment consistent with the national security interest of the United States.

A Company is considered to be operating under FOCI whenever a foreign interest has the power, direct or indirect, whether or not exercised, and whether or not exercisable, to direct or decide matters affecting the management or operations of that company in a manner which may result in unauthorized access to classified information or may adversely affect the performance of classified contracts.

When a U.S. cleared company (Facility Security clearance) enters into negotiations for the proposed merger, acquisition, or takeover by a foreign interest, the contractor notifies DSS of the proposed negotiations. The notification will include the type of transaction under negotiation (stock purchase, asset purchase, etc.), the identity of the potential foreign investor and a proposed plan to mitigate/negate the FOCI consistent with paragraph 2-303, National Industrial Security Program Operating Manual (NISPOM).

The company should also advise DSS if the parties to the proposed transaction will be filing with the Committee on Foreign Investment in the United States (CFIUS) – see CFIUS section.

DISCLAIMER: The Appearance of non-government information does not constitute endorsement by the U.S. Army
Accessibility/Section 508