SBIR/STTR foreign disclosure policy changes

  • March 5, 2024

Aspiring entrepreneurs and small business owners who are considering applying for the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs should take note of some important changes that took effect in 2022. Specifically, the new rules for foreign disclosure will require all SBIR/STTR applicants to provide more information on foreign affiliations and funding sources.

The influence of changing federal policies

This change was made in response to concerns about potential national security risks associated with foreign influence and espionage. By requiring greater transparency around foreign affiliations, the government hopes to better protect the integrity of the SBIR/STTR programs and the technologies they help to develop.

If you are considering applying for the SBIR/STTR program, it is important to ensure that you are in compliance with the new foreign disclosure rules. This may require additional due diligence on your part, as well as more detailed disclosures in your application materials. Fortunately, the government has provided some resources to help applicants navigate the new rules. For example, the Small Business Administration (SBA) has issued guidance on the changes, and the National Institutes of Health (NIH) has provided a checklist of items to consider when disclosing foreign affiliations.

SBIR/STTR applicants must disclose ALL affiliations

In the past, SBIR/STTR applicants were only required to disclose foreign entities if they had a 50% or greater ownership stake in the applicant. However, under the new rules, applicants must disclose any foreign affiliations, regardless of ownership percentage, if those affiliations provide funding, facilities, or other resources to the applicant.

The SBIR and STTR Extension Act of 2022 (Extension Act), Public Law 117–183 (Sep. 30, 2022), amended section 9 of the Act; 15 U.S.C. 638(g)(13)–(17), (o)(17)–(21), and (vv), to require small businesses applying for SBIR or STTR awards to disclose information about the applicant’s investment and foreign ties. In response, SBA amended Section 9(a) of the Policy Directive and added an appendix to address the responsibilities of Participating Agencies to collect disclosures of information about the applicant’s investment and foreign ties, as required by the Extension Act. This amendment provided a common template, based on the statutory language in the Act, to uniformly capture the required disclosures.

Per the Extension Act, the term ‘‘foreign country of concern’’ means the People’s Republic of China, the Democratic People’s Republic of Korea, the Russian Federation, the Islamic Republic of Iran, or any other country determined to be a country of concern by the Secretary of State.

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