NISPOM clause 2-302 requires contractors with facility security clearances to report Foreign Ownership, Control or Influence (FOCI) affecting their organization. This is not only true when a contractor first applies for a facility security clearance. Contractors must also report changes to such FOCI factors for as long as they hold a facility security clearance. Though foreign ownership/acquisition may be an event that clearly must be reported to the Defense Security Service (DSS), foreign control or influence may develop without a contractor noticing. Thus, we recommend that contractors review their SF 328 Form “Certificate Pertaining to Foreign Interests” on a regular basis—not just during formal self-inspections of their security programs.
Some circumstances that often change and which contractors may not realize must be reported immediately include:
- new contracts, agreements, understandings, or arrangements with foreign persons/entities
- indebtedness to foreign persons/entitites
- increased revenue from a foreign organization
- when key management personnel hold positions with or consult for foreign persons/entities
For further details on the FOCI reporting requirements, see DSS’ Industrial Security Letter 2003-03.