4. Implementation Procedures for a Foreign Eligibility Finding

Identifying Foreign-Owned Companies

When submitting their Gate 1 proposals, applicants are asked to identify if they are foreign-owned on either Form 1262 for single-company proposals or Form 1263 for joint venture proposals.6 Proposers are asked to state whether they have a parent company located outside the United States, if they are majority-owned by individuals who are not citizens of the United States, or if they are subject to control by individuals who are not citizens of the United States.

Proposers are also asked to fill out the "Foreign-Owned Company Questionnaire" found in the Exhibits section of the ATP Proposal Preparation Kit  (February 2004) and submit this form in their Gate 2 proposals.

Situations That Trigger a Foreign Eligibility Finding

The following situations trigger an initiation of a foreign eligibility finding:

• a foreign-owned company incorporated or organized in the United States proposes to lead or participate in a project selected as a semifinalist in an ATP competition;
• a foreign-owned company incorporated or organized in the United States seeks to join an existing ATP project; or
• a U.S.-owned company that is already leading or participating in a project experiences a change in ownership and becomes majority-owned or majority-controlled by non-U.S. citizens and wishes to continue its participation in the project.7

A foreign eligibility finding is initiated under any one of the above situations to ensure that the foreign-owned company meets the four foreign eligibility requirements specified in the ATP Statute, and is carried out at or near to the time of the triggering event.

Who Performs the Foreign Eligibility Finding

Congress provided the Secretary of the Department of Commerce with the authority to determine the eligibility of foreign-owned companies for receiving ATP awards. This authority was subsequently delegated to the Director of NIST, who in turn delegated it to the Director of ATP. The Director of ATP bases the foreign eligibility finding on evidence gathered from a number of sources.

Sources of Information in Preparing a Foreign Eligibility Finding

Note that under each of the situations listed above, the project will already have scored high on the proposal selection criteria covered in Chapter 2. When a foreign eligibility finding is initiated, additional information is collected from a number of sources, as discussed under each eligibility requirement below.

Eligibility Requirement 1: Participation of the Company Is in the Economic Interest of the United States

• the company has a U.S. location(s) for the project's research;
• the company is making investments in research, development, and manufacturing in the United States;
• the company agrees to promote the manufacture in the United States of any products resulting from the ATP-supported technology;
• the company has anticipated positive effects on U.S. employment and on sources of supply; and
• other aspects relevant to the project's potential to produce net broad-based benefits to the U.S. economy.

To clarify and/or supplement information in the Gate 1 and Gate 2 proposals, the applicant may be asked to submit additional information to satisfy this requirement. Information is also obtained from other sources, including Dun & Bradstreet and Hoovers.

Evidence to satisfy eligibility requirement 2-whether the country of incorporation of the foreign parent affords U.S.-owned companies opportunities comparable to those afforded to any other company to participate in programs similar to ATP-is derived primarily from analysis of similar program(s) in the parent country. This information is obtained from program officials, embassies, other official government sources, and public information.

Evidence to satisfy eligibility requirement 3-whether the country of incorporation of the foreign parent affords U.S.-owned companies local investment opportunities-is based primarily on information supplied by the Office of the U.S. Trade Representative through its annual National Trade Estimate report, its annual "Special 301" Fact Sheet, and updates from desk officers. Additional information on barriers to investment and trade may also be obtained from other federal agencies.

Evidence to satisfy eligibility requirement 4-whether the country of incorporation of the foreign parent provides adequate and effective protection of U.S.-owned intellectual property rights-is based primarily on information supplied by the Office of the U.S. Trade Representative through its annual National Trade Estimate report, its annual "Special 301" Fact Sheet, and updates from desk officers. Note that this provision is stated in absolute terms and is not relative to how other companies are treated. Additional information may be sought from other organizations including the U.S. Patent and Trademark Office, the U.S. Department of State, and U.S. embassies abroad.

For a foreign eligibility finding to be determined positive, each of the four additional eligibility requirements must be met. A positive foreign eligibility finding means that the applicant is determined eligible to participate in an ATP-supported project, provided all other requirements-common to all ATP award candidates-are met.

National policies affecting opportunities for U.S. companies to participate in similar R&D programs, opportunities for foreign investment in the foreign country, or the adequate and effective protection of intellectual property rights may change over time. Therefore, a negative decision with respect to eligibility requirements 2 through 4 does not preclude a positive finding in the future for the country in question. Similarly, a positive finding would not preclude a negative finding in the future for the country in question. It is ATP's policy to prepare a foreign eligibility finding at the time of a triggering event. ATP does not determine in advance the countries that meet or do not meet the country-specific foreign eligibility requirements.

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6. These forms can be found in the ATP Proposal Preparation Kit and on the ATP website (www.atp.nist.gov) . The kit also contains background material, proposal cover sheets, other required forms, and guidance on the preparation of proposals to ATP. The currently available version is dated February 2004 and reflects all changes to the ATP Statute and the ATP Rule through that date. The ATP Statute and ATP Rule are also available in Appendices A and B, respectively, of this report. An electronic version of the kit is available on the ATP website.

7. A change in ownership must be reported to the NIST Grants Officer within 30 days, as stipulated in the terms and conditions of the cooperative agreement signed between the award recipient and ATP.

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Date created:  January 1998
Last updated: August 3, 2005

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