ARCHIVED – Chapter 3: Facility security clearances, Part II—Facility security clearance (classified)

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350. General

1. A facility security clearance (FSC) is an administrative determination that an organization is eligible, from a security viewpoint, for access to classified and protected information and assets of the same or lower classification level as the clearance being granted.

Where an organization requires access to only protected information and assets, refer to ARCHIVED - Part I—Designated organization screening (protected) of this chapter.

2. An FSC is required before an organization can be awarded contracts that have classified information or asset requirements.

Certain individuals must be cleared in connection with an FSC. These individuals are referred to as key senior officials (KSOs). They include the company security officer (CSO), owners, officers, directors (of the board), executives and partners who occupy positions which may enable them to adversely affect an organization's policies or practices in the performance of classified contracts.

The organization is responsible for determining its KSOs and for reporting this information to the appropriate field industrial security officer (FISO) of Public Services and Procurement Canada's (PSPC's) Contract Security Program (CSP). PSPC reserves the right to challenge the organization's list of KSOs, and to call for amendments or exclusions to this list.

Refer to ARCHIVED - Annex 3-A: Designated organization screening requirements (protected information) and ARCHIVED - Annex 3-B: Facility security clearance requirements (classified information) in this chapter for specific levels of clearance required by KSOs, the CSO and employees requiring access, for each level and type of FSC.

3. Organizations must have their KSOs cleared, as a minimum, to the classification level required before an FSC will be granted.

4. Normally, an FSC is required before an organization can obtain personnel security clearances for employees other than KSOs. Clearance requests for other employees may be submitted concurrently. However, they will not be authorized until after the establishment of the FSC.

5. In establishing the FSC, the Canadian head office will be inspected and, if classified safeguarding is required at the head office, must be inspected, and the FSC will include a site clearance for that office. In addition, a separate inspection and site clearance is required for each additional location where classified information or assets will be stored or handled.

6. An FSC is based on an assessment of the following elements:

  1. the organization is not under adverse foreign influence
  2. the owners, officers, directors (of the board), executives and partners of the organization can be entrusted to participate in classified contracts
  3. the organization can protect classified information or assets at its facilities, when required

7. PSPC will notify the organization in writing as to whether an FSC has been granted.

8. When an FSC is granted, an organization can request the clearance of their employees anywhere in Canada.

351. Personnel security clearances for key senior officials

1. The CSO must maintain a current list of all KSOs, and submit a copy to PSPC's CSP each time the list is amended. The list must designate by name and title those KSOs who are cleared, those not yet cleared but who are being processed for a personnel security clearance, and those who have been excluded from access to sensitive information.

  1. KSO exclusions. When the government has an urgent need to issue an FSC to an organization, PSPC may temporarily waive the requirement that all KSOs be security cleared before an FSC is granted. The process for KSO exclusions will be considered to allow an organization to:
    1. receive a request for proposal (RFP) or other pre-contractual documentation containing classified information
    2. be awarded a classified contract
    3. continue with contracts when a company takeover has occurred
  2. Security procedures must exist within the organization to ensure that excluded KSOs are denied access to classified information and assets. The exclusion does not become effective until formally approved by PSPC, who will also determine the number of excluded KSOs to be permitted, on a case-by-case basis. If the excluded official's position or responsibilities in the organization change, the CSO must notify PSPC's CSP, who will review the exclusion. Exclusions will not normally be approved for the president or chief executive officer of an organization

352. Parent organizations

1. When an organization has a requirement to obtain classified document safeguarding capability (DSC) (that is, the authorization for an organization to store and handle protected and classified information or assets at their work sites), its parent organization (if applicable) must also possess an FSC at the same level or it must be excluded from access to the classified information and assets held by the subsidiary organization. Where a parent organization exclusion is required, the organization must submit the following completed forms:

  1. ARCHIVED - Annex 3-D: Resolution of exemption of parent organization form
  2. ARCHIVED - Annex 3-E: Non-disclosure certificate form
  3. ARCHIVED - Annex 3-F: Subsidiary board resolution noting parent's exclusion and resolution to exclude parent organization form

2. The exclusion of a parent organization does not become effective until formally approved by PSPC, who will determine if there is a valid need for the exclusion of the parent organization.

353. Foreign ownership, control or influence

1. In certain circumstances, such as involvement in extremely sensitive information security (INFOSEC) programs and contracts, there is a need to evaluate, in more detail, the ownership of an organization and the degree of influence exercised by owners and senior management personnel. In such cases, organizations would be required to provide full details concerning:

  1. corporate organization, up to ultimate ownership (direct or indirect)
  2. foreign directors or officers
  3. actual or potential foreign control or influence over the election, appointment or tenure of directors or officers
  4. ownership of foreign interests
  5. foreign contracts, agreements, understandings or arrangements
  6. foreign indebtedness or foreign sources of income
  7. the relationship between directors and foreign interests

2. The existence of foreign ownership, control or influence (FOCI) does not, in itself, prohibit an organization from holding an FSC. Each case is assessed individually. In cases of an adverse FOCI, details will be discussed with the organization to determine whether certain measures can be taken to negate the risk or reduce it to an acceptable level.

354. Care and custody of classified information and assets

The organization's facility must meet the physical and administrative security requirements necessary for the performance of the classified work to be performed under the contract before an FSC with DSC will be granted.

Refer to ARCHIVED - Chapter 4: Facility safeguarding, and ARCHIVED - Chapter 5: Handling and safeguarding of protected and classified information and assets of this manual. Specific guidance will be provided by the FISO of PSPC's CSP.

355. Pre-contractual negotiations

Pre-contractual negotiations, involving classified information and assets, may not be initiated with the organization until after an FSC has been granted. This is also applicable when a cleared organization wishes to subcontract to another non-government organization.

356. Government of Canada security agreement

Prior to being granted an FSC, the organization must enter into an agreement with the Canadian government, whereby the organization undertakes to:

  1. abide by the provisions of this manual, and such other security requirements as may form part of a classified contract awarded to the organization
  2. permit PSPC's CSP, or other government authorities at the request of PSPC, to enter their premises at any time for the purpose of conducting security inspections
  3. not seek reimbursement from the government for security costs except as provided for in a contract

Refer to ARCHIVED - Annex 3-G: Public Services and Procurement Canada security agreement in this chapter.

357. Types of facility security clearances

1. There are 3 types of FSCs:

a. Personnel assigned (PA)
This is the most basic type of FSC. It normally applies to those organizations involved in contracts for services as opposed to goods. A PA FSC will involve security screening of the organization's KSOs and employees. There is no requirement to evaluate the physical security status of the organization's facilities. A PA FSC does not authorize the organization to possess or store classified information and assets within its facilities.
b. Document safeguarding capability (DSC)
This type of FSC involves the security screening of the organization's KSOs and employees. In addition, the physical security of the organization's facilities is assessed to ensure they meet the requirements for the safeguarding of government information and assets. A DSC for FSC will authorize the organization to possess and store classified information and assets at their facility.
c. Production (PROD)
This type of FSC includes all the same elements of a DSC FSC. In addition, the security of the manufacturing, repairing, modifying or otherwise working on classified components or items is assessed, to ensure they meet the government security requirements.

2. Each type of FSC may be authorized at the classification level of Confidential, of Secret or Top Secret, or of NATO Confidential or NATO Secret.

358. Status of facility security clearance

Where organizations receive a request from other organizations, other government departments or other governments to confirm their FSC, such requests will be referred to PSPC's CSP.

359. Period of validity

1. An FSC granted by PSPC is not awarded in perpetuity. An FSC is granted for the performance of a specific contract, or on the basis of registration where it appears an organization may receive a contract award. An FSC lapses on completion of the last classified contract, upon confirmation that registration is not renewed or both. The organization will be advised, in writing by PSPC, when the FSC is about to be terminated, and will be given the opportunity to show cause for FSC continuation.

2. An FSC will be suspended or revoked by PSPC if the organization fails to maintain the required security standards. Existing contracts will be cancelled and the organization will not be eligible for future security-related contracts while the organization's FSC is under suspension.

360. Site clearances within an organization located in Canada

1. Separate site clearances are necessary for each location where classified information or assets will be stored or handled.

2. When classified DSC is required at sites physically separate from the Canadian head office, the following conditions must be met at each location before a site clearance will be granted:

  1. the head office must have an FSC
  2. the KSO in charge of each location must be cleared to the required level
  3. at least one other employee must be cleared to the same level
    • in the case of a one-person operation or organization, PSPC may consider an exception on a case-by-case basis
  4. at least 2 security officers must be appointed
  5. each location must meet the required physical and administrative security requirements

361. Branch office outside of Canada

1. For the purpose of this manual, a branch office is not considered to be a separate legal entity requiring a separate FSC.

2. Where it is necessary to safeguard classified information and assets at a branch office outside of Canada, the Canadian head office must submit a written request for clearance to PSPC's CSP, in order that the appropriate action may be taken with the designated industrial security authority of that nation. Depending on the country involved, PSPC's CSP may not always be able to establish safeguarding capability at the branch office(s).

362. Reciprocal facility security clearances

1. For the purpose of this manual, a subsidiary is considered to be a separate legal entity requiring a separate FSC.

2. Under a number of industrial security agreements (such as between the United States and Canada), PSPC can request a foreign government to grant a reciprocal FSC to a subsidiary of a Canadian organization located in another country. This is useful when the subsidiary wishes to get involved as a subcontractor in a Canadian classified contract.

Note: Reciprocal FSCs are somewhat restricted. For the most part, a reciprocal FSC will only permit the subsidiary to get involved in Canadian classified work. Involvement in classified contracts with the government of the country in which the subsidiary is located may not be permitted with this type of FSC.

3. When a Canadian subsidiary requires an FSC for involvement or potential involvement in classified work for the government of the country in which it is located, the subsidiary may be required to apply directly to the industrial security authorities of that country for a regular FSC. (PSPC's CSP can provide points of contact of industrial security authorities in other countries.) In most cases, the subsidiary will have to be incorporated in that country before qualifying for an FSC.

Annexes

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