Page 71 - The CFIUS Book

4.1.5.5. SSA
THE CFIUS BOOK
The NISPOM explicitly allows for the
imposition of a Special Security
Agreement where a company is
effectively owned or controlled by a
foreign interest.91 The SSA preserves a
foreign owner’s right to be
represented on the cleared
contractor’s board with a direct voice
in the business management of the
company, but removes the foreign owner from day-to-day management of the cleared contractor’s classified work and reduces it to a minority position on the board.92
THE SSa IS THE Only mITIgaTIOn InSTrUmEnT THaT allOWS THE FOrEIgn InvESTOr TO rETaIn SOmE COnTrOl OvEr THE OpEraTIOnS OF THE COmpany, HOWEvEr, IT IS THE mOST BUrdEnSOmE and TImE COnSUmIng TO ImplEmEnT.
Where a foreign investor effectively owns or controls a cleared company, the SSA is the only mitigation instrument that allows the foreign investor to retain some control over the operations of the company; however, it is the most burdensome and time consuming instrument to implement. An SSA plan includes additional documentation and may require added security measures, such as more stringent electronic communications or technology control plans, as compared to the other mitigation options. Under an SSA, in addition to the industrial security and export control measures imposed under an SCA, access to classified information may require the government entity responsible for the classified contract to “complete a National Interest Determination (NID) to determine that release of proscribed information to the company shall not harm the national security interests of the United States”.93
71