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Foci Special Security Agreement

The NISPOM provides agreements allowing foreign investment in national defence and security companies, without compromising security clearances that result in valuable investments for these companies. The NISPOM defines a number of options that impose different restrictions on the foreign investor depending on the specific relationship that exists between the U.S. company and the foreign investor. Careful attention to these requirements allows the foreign investor to meet the national security interests of the United States and offer considerable protection to his investments. Where a company located under foreign ownership, control or influence (FOCI) has a security clearance for facilities, NISPOM`s clause 2-303 requires the entity to implement an action plan to mitigate the security risk posed by Foreign Ownership, Control or Influence (FOCI). The NISPOM outlines a number of these action plans to mitigate FOCI. U.S. Government Facility Security Clearances (“FCLs”) shall not be issued to U.S. foreign ownership, control or influence companies (“FOCI” unless appropriate security measures are in place to protect U.S. national security. The National Industrial Security Program (NISPOM) operating manual contains instructions on whether U.S. companies are on FOCI and implements the U.S. government`s policy of granting or prosecuting FCLs to U.S.

companies operating under FOCI. When a company is in the possession or control of a foreign entity, a Special Security Agreement (SSA) can be used to reduce foreign ownership, control or influence (FOCI). Although implementation is longer and more time-consuming than the FOCI mitigation measures mentioned above, the Special Security Agreement (SSA) is a popular choice. It can reduce the security risks to foreign ownership or foreign control, while allowing the foreign entity to appoint representatives to the company`s board of directors, which the more restrictive proxy agreement (AP) and the Voting Trust Agreement (VTA) do not allow. However, one of the drawbacks of the specific security agreement is that it imposes restrictions on the types of classified national security information that the company can access. (2) Voting Trust Agreement und Proxy Agreement — Voting Trust Agreements and Proxy Agreements are applied in cases where a foreign investor is able to control a U.S. company. Under these agreements, three agents or agents generally have control of the company, with the exception of a few specifically identified facts, such as mergers or bankruptcy, that may require shareholder approval.

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