Facility clearance · FOCI mitigation

FOCI mitigation, compared

When DCSA finds a company under foreign ownership, control or influence (FOCI), the company cannot hold a facility clearance until measures acceptable to DCSA mitigate or negate it. This page sets the standard instruments side by side: what situation each fits, who governs, what access it allows, and what it requires afterward.

Your actual agreement controls. DCSA decides which instrument applies and tailors every agreement to the company; its model agreements show typical terms, not yours. Read the signed agreement and its supplements before relying on anything here, and involve counsel familiar with FOCI.

Compare the instruments SF 328 question guide

Which instrument fits?

The choice turns mainly on how much of the company the foreign interest owns or controls. DCSA weighs the source, nature and extent of the FOCI and the information the company will access (§117.11(b)), and can combine measures.

FOCI not from ownershipPositive measuresFor foreign debt, contracts, revenue or influence without ownership: for example ending or changing foreign loans and agreements, reducing foreign-source income, resolving problem debt, special board resolutions or security committees, or separating the classified operation. §117.11(d)(1)

Owns shares, no board seatBoard resolutionThe foreign interest cannot elect, and is not entitled to, representation on the governing board. Compare

Board seat, U.S. controlSecurity control agreement (SCA)The company is under U.S. control, but the foreign interest is entitled to a seat on the board. Compare

Effective ownership or controlSSA, proxy agreement or voting trustAn SSA keeps the foreign owner’s voice on the board, with limits on proscribed information. A proxy agreement or voting trust hands the foreign owner’s voting rights to cleared U.S. citizens and negates the FOCI. Compare

Cannot or will not mitigate? In exceptional circumstances DCSA may grant a limited FCL for a single, narrowly defined contract, when the Government says access is essential and, normally, an industrial security agreement exists with the foreign owner’s government. It is not available when a foreign government owns or controls a company that needs proscribed information. §117.11(e)

The instruments side by side

Personnel numbers are DCSA’s typical arrangement; DCSA sets the actual composition for each company. On a phone, each row shows every instrument in turn.

Topic	Board resolution	Security control agreement	Special security agreement	Proxy agreement	Voting trust
Fits when	The foreign interest cannot elect or appoint anyone to the board. DCSA’s example: a 10% foreign shareholder with no board seat.	The company is under U.S. control, but the foreign interest is entitled to board representation. DCSA’s example: a 25% owner that can appoint a director.	A foreign interest effectively owns or controls the company.	A foreign interest effectively owns or controls the company.	A foreign interest effectively owns or controls the company.
Foreign owner’s role	Remains a shareholder; the board certifies it will not have, and can be kept from, access to classified information.	Represented on the board, with no access to classified information.	Keeps its board representation (inside directors) and a direct voice in business management, but not a board majority or access to classified information.	Keeps legal title; its voting rights are conveyed to the proxy holders.	Transfers legal title to its ownership interest to the trustees, and keeps only the status of beneficiary.
Who governs	The existing board.	The board, with at least one cleared U.S. citizen outside director; DCSA may require more.	A board on which outside directors outnumber the inside directors. Typically 3 outside directors, 1–2 cleared officer/directors and 1–2 uncleared inside directors.	Typically 3 proxy holders, all on the board, exercising all ownership prerogatives independently of the foreign owner. Only proxy holders elect other directors.	Typically 3 trustees, all on the board, exercising all ownership prerogatives independently of the foreign owner. Only trustees elect other directors.
Access to classified information	No limit from the resolution itself.	No access limitations.	Proscribed information (Top Secret, COMSEC, Restricted Data, SAP, SCI) needs a national interest determination, unless an exception applies.	No restrictions, including proscribed information.	No restrictions, including proscribed information.
Foreign owner still decides	As a shareholder, within the resolution.	Through its board seat, subject to the agreement.	Business decisions through its inside directors, monitored by the outside directors.	Only matters the agreement reserves, such as selling or disposing of the company’s assets or a substantial part of them; pledges, mortgages or encumbrances on assets or stock; mergers, consolidations or reorganizations; dissolution; and filing for bankruptcy.
Government security committee	Not required.	Required: outside directors and cleared officer/directors.	Required: outside directors and cleared officer/directors.	Required: proxy holders and cleared officer/directors.	Required: trustees and cleared officer/directors.
Required plans	None by default.	Technology control plan; other supplements as DCSA requires.	Technology control plan and electronic communications plan; affiliated operations and facilities location plans where they apply.	Technology control plan and electronic communications plan; affiliated operations and facilities location plans where they apply.	Technology control plan and electronic communications plan; affiliated operations and facilities location plans where they apply.
Every year	The board certifies to DCSA that the resolution remains effective.	DCSA meets the GSC at least annually, and the GSC chair submits an implementation and compliance report one year after the effective date and every year after.
Term	While the facts it rests on remain true.	As set in the agreement.	Five years from execution, per DCSA.	Five years from execution, per DCSA.	Five years from execution, per DCSA.
DCSA model	Sample board resolution ↗	Sample SCA ↗	Sample SSA ↗	Sample proxy agreement ↗	Sample voting trust agreement ↗

Rows follow 32 CFR §117.11(d)(2), (g), (h) and (i); DoDM 5220.32 Volume 2, Enclosure 3; and DCSA’s Mitigation Agreements page (typical personnel, the five-year terms and the examples). DCSA’s models are templates; actual agreements vary.

National interest determinations

A NID is the Government’s decision that giving a company under an SSA access to proscribed information is consistent with U.S. national security interests.

When it is neededOnly for a company under an SSA that needs proscribed information: Top Secret, COMSEC (except controlled cryptographic items that are unkeyed or used with unclassified keys), Restricted Data, SAP or SCI. The rule defers to law such as Section 842 of Public Law 115-232, and lets DCSA guidance exempt some categories; ask DCSA whether either applies. §117.11(d)(2)(iii)

Who decidesNot the company: DCSA says the need for a NID, and the request, are never the contractor’s responsibility. The contracting activity asks, DCSA proposes the NID, and the contracting activity decides. For COMSEC, SCI or Restricted Data, NSA, ODNI or DOE must also concur for its category.

How longDoD policy gives the contracting activity 30 days to act once DCSA identifies the need, and NSA, ODNI or DOE another 30 days to concur. Access to a category can begin once DCSA reports that category’s concurrence, even while others are pending.

How far it reachesA NID can cover a program, project or contract; each contract under a program does not need its own. No new concurrence is needed when the contract or the SSA is renewed on the same terms, but access can be revisited after adverse information, a new threat, a material FOCI change or poor compliance.

Sources: 32 CFR §117.3 (proscribed information) and §117.11(d)(2)(iii); DoDM 5220.32 Volume 2, Enclosure 3; DCSA: National Interest Determinations.

Living under an agreement

The peopleOutside directors, proxy holders and trustees must be resident U.S. citizens, completely disinterested (no prior involvement with the company, its affiliates or the foreign owner), and eligible for access at the FCL’s level. DCSA also weighs how many other boards they sit on. §117.11(f)

The GSCA permanent board committee that makes sure the company protects classified information and follows export controls, and that violations are investigated and reported. The FSO is its principal advisor, and its chair must concur in appointing or replacing the FSO. §117.11(g)

The plansA technology control plan keeps non-U.S. citizens from information they are not authorized to see; an electronic communications plan separates networks and communications from the foreign owner; an affiliated operations plan governs shared services; a facilities location plan addresses nearness to the foreign parent. §117.11(h)

The annual reportHow the company is meeting the agreement; changed or proposed security procedures; any noncompliance and its remedy; changes in key management or board members; changes in structure or ownership; and anything else bearing on the agreement’s effectiveness. §117.11(i)

Deals and changes

Tell DCSA early

A cleared company that begins negotiating a merger, acquisition or takeover by a foreign interest must notify DCSA when negotiations start, with the transaction type, the investor and a plan to mitigate or negate the FOCI (§117.11(c)(2)). If CFIUS is also reviewing the deal, the two reviews run in parallel on different timelines (§117.11(j)).

Company changes to report →

Sources: 32 CFR §117.11; DoDM 5220.32 Volume 2, FOCI Procedures (Change 2, 2021); DCSA: Foreign Ownership, Control or Influence, its Mitigation Agreements and National Interest Determinations pages (read 2026-09-24) and model agreements. For companies under DCSA cognizance. Not legal advice.