Security Control Agreement Template for the United States

A Security Control Agreement is a specialized legal instrument that allows companies with foreign ownership or investment to access classified U.S. government contracts and information while maintaining strict security protocols. This agreement creates a framework that balances national security interests with legitimate international business operations, ensuring compliance with federal regulations while enabling commercial activities.

When do you need this document?

You need a Security Control Agreement when your company has foreign ownership or investment and seeks to bid on or perform classified government contracts. This situation commonly arises when foreign investors hold significant stakes in U.S. defense contractors, technology companies working on sensitive projects, or businesses seeking facility security clearances. The agreement becomes necessary when the Committee on Foreign Investment in the United States (CFIUS) or the Defense Counterintelligence and Security Agency (DCSA) determines that foreign influence poses potential security risks but can be mitigated through structured controls rather than complete divestiture or proxy arrangements.

Key legal considerations

The agreement must establish robust security controls that isolate foreign parties from classified information and decision-making processes. Key provisions include creating a Government Security Committee with cleared U.S. citizens who oversee security matters, implementing information barriers to prevent unauthorized access, and establishing reporting requirements to government agencies. You must carefully define the scope of restricted activities, specify which personnel can access classified areas, and outline procedures for handling security violations. The agreement should address technology transfer restrictions, export control compliance, and protocols for board meetings where classified matters might arise. Additionally, consider provisions for regular security audits, employee screening procedures, and termination clauses that protect classified information if the arrangement ends.

Legal requirements in United States

Under U.S. federal law, Security Control Agreements must comply with the National Industrial Security Program Operating Manual (NISPOM), which establishes comprehensive requirements for protecting classified information in industry. The Foreign Investment Risk Review Modernization Act (FIRRMA) expanded CFIUS authority to review and impose conditions on foreign investments that could affect national security. Your agreement must satisfy Department of Defense security requirements and may need approval from relevant government agencies before implementation. The Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR) may impose additional restrictions on technology sharing and export activities. Compliance with the Defense Production Act of 1950 may also be required for companies involved in critical defense manufacturing. Regular reporting to the Defense Counterintelligence and Security Agency and other oversight bodies is typically mandatory, and failure to maintain required security standards can result in contract termination or facility clearance revocation.