Executive Summary

The Advanced Technology Program (ATP) helps U.S. companies accelerate the development and commercialization of highly innovative technologies with strong potential for generating broad-based economic benefits for the nation. ATP multiyear awards are made to individual companies and to joint research and development ventures through a highly competitive, merit-based, peer-reviewed selection process.

U.S.-owned companies are eligible to receive ATP funding. Companies incorporated (or organized) in the United States with a parent company incorporated in another country (i.e., companies that are majority-owned or majority-controlled by individuals who are not citizens of the United States) are also eligible to receive ATP funding, provided additional requirements are met. Foreign-owned companies or organizations that are located abroad are not eligible to receive ATP funding as direct participants, but may receive ATP funding as subcontractors on a case-by-case basis. U.S.-owned companies incorporated outside the United States are generally not eligible to receive ATP funding as direct participants, except on a case-by-case basis.

ATP bases its funding decisions on how well the project proposal addresses the two main selection criteria: (1) scientific and technological merit and (2) potential for broad-based economic benefits to the United States. Regardless of the country of ownership of the participating companies, projects must score high against the two selection criteria to receive ATP funding.

This report addresses the four additional eligibility requirements that foreign-owned companies must meet as a condition of funding. According to ATP's authorizing legislation, for an award to be given to a foreign-owned company, the Secretary of Commerce (or the Secretary's designee) must find that:

• The company's participation in the ATP project is in the economic interest of the United States;

The country of incorporation of the foreign parent provides all of the following:

• Opportunities to U.S.-owned companies comparable to those provided to any other company to participate in government-funded programs similar to ATP;
• Local investment opportunities to U.S.-owned companies comparable to those provided to any other company; and
• Adequate and effective protection of intellectual property rights of U.S.-owned companies.

Program implementation of this statutory requirement is carried out by the Director of ATP, the Secretary of Commerce's designee, who bases the determination of a foreign-owned company's eligibility to receive an award on evidence gathered from a number of sources.

In implementing its legislative mandate, ATP initiates a foreign eligibility finding in situations where a project selected as a semifinalist involves a foreign-owned company, or a foreign-owned company seeks to join as a participant in an existing ATP joint venture project. In addition, a foreign eligibility finding is initiated when a project participant 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.

Through September 2003, ATP has carried out 106 foreign eligibility findings. Of these, 73 findings were for companies whose projects were selected as finalists for awards. The remaining findings were for companies seeking to join existing projects or to continue participating in ATP projects after experiencing a change in their ownership. To date, only two foreign eligibility findings have been negative.

Of the 709 projects in ATP's portfolio, 64 active and completed projects involve 80 participants that are foreign-owned, U.S.-incorporated or U.S.-organized companies. Foreign-owned companies participate in less than 10% of ATP projects; 49 of the 207 joint venture projects and 15 of the 502 single-company projects. These 80 participants represent 75 foreign-owned companies from 15 different countries. A few of these companies participate in more than one project.

Organization of the Report

Chapter 1 of the report gives an overview of ATP to provide readers with a general understanding of the goals of the program and an awareness of the number of projects and kinds of technologies that have received funding to date.

Chapter 2 discusses the published project selection criteria and process that apply to all participating companies-regardless of country of ownership.

Chapter 3 lays out the additional eligibility requirements that foreign-owned applicants and the countries in which their parent companies are incorporated must meet. How ATP identifies foreign-owned companies and situations that lead to a foreign eligibility finding are discussed.

Chapter 4 describes the procedures for implementing the foreign eligibility finding process and covers how foreign-owned companies are identified, situations that trigger a foreign eligibility finding, who performs the finding, the sources of information used, and rules on what constitutes a positive or negative foreign finding.

Chapter 5 provides data on the participation of foreign-owned companies in ATP-funded projects.

Chapter 6 uses a question and answer format to address common questions ATP has received on foreign eligibility and participation.

Return to Table of Contents or go to Chapter 1.

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

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