What Is an SF-328? Certificate Pertaining to Foreign Interests Explained

If you've recently encountered the term "SF-328" during a Facility Clearance process, security review, or discussion about NDAA Section 847, you're not alone.

Many defense contractors are surprised when they are asked to complete a Certificate Pertaining to Foreign Interests, especially if they have never worked on classified contracts before.

The SF-328 is one of the government's primary tools for identifying potential Foreign Ownership, Control, or Influence (FOCI) concerns. While the form itself is relatively straightforward, the questions often lead to confusion about ownership structures, investors, foreign relationships, and future contracting opportunities.

This guide explains what the SF-328 is, why it matters, and what defense contractors should know before completing it.

What Is an SF-328?

The SF-328, formally known as the Certificate Pertaining to Foreign Interests, is a government form used to gather information about foreign ownership, control, or influence within a company.

The form helps the government determine whether foreign interests may have the ability to influence a contractor's operations, decision-making, or access to sensitive information.

Historically, the SF-328 has been associated with Facility Clearance (FCL) applications and classified contracting. However, growing attention around NDAA Section 847 has increased awareness of FOCI reporting requirements throughout the Defense Industrial Base.

Completing an SF-328 does not mean your company has a FOCI issue. It simply provides the government with information needed to evaluate potential foreign influence concerns.

Why Does the Government Use the SF-328?

The Department of Defense and other federal agencies have a responsibility to understand who owns, controls, and influences companies supporting national security programs.

The SF-328 helps identify situations where foreign interests may have:

• Ownership in a U.S. contractor
• Governance or voting rights
• Board representation
• Financial control
• Access to sensitive information
• Contractual rights that influence business decisions

The government uses this information to assess potential security risks and determine whether additional review is necessary.

What Questions Does the SF-328 Ask?

Many contractors expect the form to focus solely on ownership percentages. In reality, the SF-328 examines a much broader range of relationships.

Questions generally focus on:

Foreign Ownership

Does any foreign individual, company, or government own part of the business?

Foreign Debt or Financing

Has the company received loans, financing, or other financial support from foreign sources?

Foreign Management Participation

Do foreign persons serve as officers, directors, or key decision-makers?

Foreign Contracts and Agreements

Are there agreements that provide foreign entities with influence over company operations?

Foreign Access to Information

Could foreign interests gain access to sensitive information, technologies, facilities, or systems?

Each question is designed to help the government understand the overall influence foreign interests may have over the organization.

Common SF-328 Misconceptions

"We Have Foreign Investors, So We Will Fail."

Not necessarily.

Many defense contractors successfully operate with foreign investment. The government evaluates the nature of the investment, governance rights, ownership percentages, and other relevant factors.

Foreign ownership alone does not automatically prevent a company from pursuing defense work.

"We Can Answer 'No' to Everything."

Some organizations mistakenly assume the goal is to avoid reporting foreign relationships.

The purpose of the SF-328 is transparency. Incomplete or inaccurate responses can create greater concerns than the foreign relationship itself.

"This Only Matters for Classified Contracts."

While the SF-328 remains closely associated with Facility Clearances and classified work, broader FOCI reporting requirements are becoming increasingly important across the defense contracting landscape.

"We're a Startup, So This Doesn't Apply."

Many venture-backed defense startups have ownership structures that deserve careful review. Early-stage companies are often among the organizations most likely to encounter FOCI questions as they grow.

What Types of Companies Should Pay Close Attention?

The SF-328 is especially relevant for:

• Companies pursuing a Facility Clearance
• Contractors supporting classified programs
• Venture-backed defense startups
• Businesses with foreign investors
• Companies preparing for acquisition
• Organizations involved in mergers or restructuring
• Contractors anticipating future DoD opportunities

Even if your organization does not currently require an SF-328, understanding how the government evaluates foreign interests can help inform future business decisions.

How Venture Capital Can Affect SF-328 Responses

One of the fastest-growing areas of concern involves venture capital investment.

Defense technology startups frequently raise capital from investment funds with complex ownership structures. In some cases, portions of those funds may include foreign limited partners, sovereign wealth funds, or other foreign interests.

This does not automatically create a FOCI issue. However, companies should understand:

• Who their investors are
• Whether foreign entities have governance rights
• Whether board seats are involved
• Whether special voting rights exist
• Whether future funding rounds may change ownership dynamics

Understanding these factors early can make future security reviews significantly smoother.

What Happens After the SF-328 Is Submitted?

The answer depends on the specific circumstances.

In many cases, the government simply reviews the information and determines that no additional action is required.

In other situations, reviewers may request:

• Additional documentation
• Organizational charts
• Ownership information
• Governance documents
• Investor information
• Clarification regarding foreign relationships

The purpose of these requests is to gain a complete understanding of the company's ownership and control structure.

Preparing Before You Need an SF-328

The best time to evaluate potential FOCI concerns is before a contract award, Facility Clearance sponsorship, acquisition, or investment transaction.

Questions worth considering include:

• Do we understand our ownership structure?
• Have we identified all foreign investors?
• Are governance rights clearly documented?
• Could future investments create additional concerns?
• Are we planning to pursue classified opportunities?

Early planning can prevent delays and reduce uncertainty during future government reviews.

Need Help Understanding Your SF-328 Requirements?

The SF-328 is often the first time contractors encounter the complex world of Foreign Ownership, Control, or Influence.

Industry FSO helps defense contractors evaluate ownership structures, understand FOCI considerations, and prepare for security reviews, Facility Clearance applications, and emerging NDAA Section 847 requirements.

Whether you're completing an SF-328 for the first time or simply want to understand how foreign investment may affect future contracting opportunities, our team can help you identify potential concerns before they become obstacles.

Schedule a consultation to discuss your organization's ownership structure and FOCI exposure.