Navigating FOCI Risks: Why Organizations Should Care

Source:EXIGER

Managing foreign ownership, control, or influence (FOCI) risk is a critical concern for U.S. companies. This risk extends far beyond a national security issue; it encompasses protecting classified information, intellectual property, ensuring supply chain resilience, and the overall performance and schedule of contracts.

FOCI risk arises when a foreign interest, direct or indirect, can influence and make decisions affecting a company’s management and operations. Such influence, if not properly managed, can lead to unauthorized access to classified information or negatively impact performance and contracts. Given these dynamics, the importance of FOCI risk management cannot be overstated:

Asset protection: Safeguarding intellectual property, trade secrets and classified information is essential, especially in the face of a 1300% increase in China-linked espionage cases.

Regulatory compliance: Adhering to FOCI risk regulations is vital, as 1 in 5 corporations claim China has stolen their IP in the past year.

Business continuity: Ensuring uninterrupted operations is critical to counteract economic coercion and safeguard corporate interests.

National security: Proactively managing FOCI risk is an integral part of preserving national security, considering the gravity of the threat.

Let’s delve into the risks associated with FOCI and why businesses need to prioritize FOCI risk management.

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