Tax Haven Companies Lose Defense Contracts

WASHINGTON (CN) - Companies that have moved their registered headquarters to offshore tax-havens no longer will be awarded contracts by the Defense Department.

The late Senator Paul Wellstone placed a provision in the Homeland Security Act of 2002 which eliminated the award of contracts to so called "inverted domestic corporations," but the act, as passed, contained a grandfather clause allowing any company that had relocated to a tax-haven before the act passed to continue to receive contracts.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council now have amended the Federal Acquisition Regulations to eliminate the grandfather provision and prohibit any inverted domestic corporations from bidding on or being awarded a defense contract or a contract from any agency under the Department of Homeland Security.

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