Defense Department Proposes New Disclosure Rules for Foreign Ownership in Large Contracts

The Defense Department is proposing new rules that would require contractors and subcontractors working on large defense contracts to report their beneficial ownership and any foreign ownership, control, or influence to the Defense Counterintelligence and Security Agency. The proposal also requires companies to update that information whenever their ownership structure changes.

Why it matters: This is mostly an administrative update to enforce existing statutory requirements from the 2020 and 2021 National Defense Authorization Acts. The practical effect is that larger defense contractors would need to track and report ownership changes more closely, and their security status would be checked before contract actions proceed. Smaller vendors and routine commercial buyers are largely unaffected unless a specific national security risk is identified.

Who it affects

• Defense contractors and subcontractors with contracts over $5 million

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This proposed rule comes from the Defense Acquisition Regulations System within the Department of Defense; you should check the original Federal Register notice for the full text and comment deadlines before relying on it.

Agency: Defense Department, Defense Acquisition Regulations System
Source: Federal Register — read the official document