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December 1, 2020

Stroock Client Alert

By: Chris Griner, Shannon Reaves, Gregory Jaeger, Christopher R. Brewster, Jonathan A. Labib, Erin Bruce Iacobucci

Effective October 1, 2020, Section 842 of the National Defense Authorization Act for Fiscal Year 2019 (“Section 842”) removed certain National Interest Determination (“NID”)[1] requirements for some companies operating under Special Security Agreements (“Covered SSA Companies”).  Covered SSA Companies are those whose parent/ultimate parent companies are organized in National Technology and Industrial Base (“NTIB”[2]) countries.  Government agencies have interpreted Section 842 to cover only three of the five categories of proscribed information: Top Secret, Special Access Program information, and COMSEC[3].  The Office of the Director of National Intelligence, which is responsible for writing NIDs required for access to Sensitive Compartmented Information (“SCI”), has now determined that Section 842 also applies to SCI.  The effect of this determination is that Covered SSA Companies will no longer be required to obtain NIDs for SCI access.  

SCI access is required by a large number of highly classified contracts, so the application of Section 842 to SCI will have a significant effect for a number of Covered SSA Companies.  Further, this change will be welcomed by companies with NTIB ownership that are eligible to operate under SSAs, but currently do not, or have considered entering the classified U.S. market but saw the NID requirement as a barrier to entry.

If you would like to discuss options for your company under the expanded application of Section 842, please contact us.

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For More Information:

Chris Griner

Shannon Reaves

Gregory Jaeger

Christopher R. Brewster

Jonathan A. Labib

Erin Bruce Iacobucci

[1] A NID is required for a company operating under an SSA to access proscribed information.

[2] NTIB countries are the United States, United Kingdom, Canada, and Australia. 

[3] COMSEC is Communications Security information or material, except for controlled cryptographic items when unkeyed or used with unclassified keys.

This Stroock publication offers general information and should not be taken or used as legal advice for specific situations, which depend on the evaluation of precise factual circumstances. Please note that Stroock does not undertake to update its publications after their publication date to reflect subsequent developments. This Stroock publication may contain attorney advertising. Prior results do not guarantee a similar outcome.