USAID Partner Vetting — Counterterrorism Background Checks for Recipients of U.S. Foreign Aid

Legal Authority

• 22 U.S.C. § 2151a — Primary authority for USAID's foreign economic assistance programs; authorizes USAID to make grants, cooperative agreements, and contracts for development activities
• 22 U.S.C. § 2395 — General implementing authority for the Foreign Assistance Act; authorizes the President (delegated to USAID) to prescribe regulations governing foreign assistance activities
• 18 U.S.C. § 2339B — Federal criminal prohibition on providing material support to designated foreign terrorist organizations; compliance with this prohibition drives USAID's partner vetting framework
• 2 CFR Part 701 — USAID implementing regulations for partner vetting of non-federal entities receiving cooperative agreements that present national security concerns

Key Mechanics

2 CFR Part 701 establishes USAID's framework for vetting non-federal partners — nonprofits, for-profits, and foreign organizations — who receive USAID cooperative agreements when USAID determines a specific award presents a national security concern. Vetting is not automatic for every award: USAID makes case-by-case determinations based on the implementing country, program type, and recipient population. When vetting is required, the applicant must submit identifying information on "key individuals" (senior management, program leads) using a Vetting Information Form; USCIS, State Department, and intelligence community databases are checked against the Specially Designated Nationals list and other terrorism-related watchlists. Awards may not proceed until the vetting process is complete and USAID determines no disqualifying connections exist. Recipients whose key individuals fail vetting are ineligible for the award; they may not substitute unvetted individuals without USAID approval. The regulation was developed after the Homeland Security Presidential Directive 6 framework; as of 2025-2026, USAID's operational capacity has been substantially curtailed under executive branch reorganization, with residual functions absorbed by the State Department.

Current Rule (2026)

What This Rule Does

U.S. law prohibits providing material support or resources to designated foreign terrorist organizations. For USAID — which awards billions of dollars annually in grants and cooperative agreements to implement foreign assistance programs — ensuring that funds do not flow to individuals or organizations connected to terrorism requires a formal vetting process.

Two CFR Part 701 establishes USAID's partner vetting framework. When USAID determines that a particular award presents a national security concern, USAID may require background vetting of key individuals associated with the recipient organization. The rule applies to non-federal entities — nonprofits, for-profits, and foreign organizations — that receive USAID cooperative agreements. (Federal agencies and foreign government entities are not covered.)

Vetting is not automatic for every USAID award. USAID makes a case-by-case determination that a specific award warrants it based on national security considerations — factors such as the implementing country, the type of program, and the recipient population.

Key Provisions

• § 701.1 — Definitions: "key individual" means the main leaders and officers who run the organization or the U.S.-funded program, and anyone with significant responsibility for managing U.S.-funded activities or resources; "key personnel" means individuals named as essential to carrying out the cooperative agreement — they must be vetted even if they do not work exclusively on that program; first-tier subrecipients, contractors, and other specified entities at the sub-award level are also subject to vetting requirements when the prime award vetting requirement is triggered
• § 701.2 — Applicability: Part 701 applies to non-governmental entities (nonprofit organizations, for-profit businesses, and foreign-based organizations) receiving USAID cooperative agreements; it does not apply to contracts, grants to foreign governments, or awards to U.S. federal agencies
• § 701.3 — Partner vetting: when USAID determines an award presents a national security concern, USAID may require completion of the USAID Partner Information Form (Form 500-13) for key individuals; the Form 500-13 collects biographical and background information sufficient for a counterterrorism check; vetting applies to key individuals at the recipient organization and, when required, at first-tier subrecipients and contractors; the agreement officer specifies in the award which individuals must be vetted and at what point (pre-award, prior to key personnel changes, or on an ongoing basis during performance); a positive match — finding that an individual is connected to a designated terrorist organization or other prohibited party — results in the individual being ineligible to participate in the program; USAID does not automatically disqualify an entire organization because one individual is flagged, but the organization must remove that individual from program participation before the award can proceed or continue

How It Affects You

Nonprofit organizations and implementing partners applying for USAID cooperative agreements in programs or countries designated as presenting national security concerns should be prepared to submit Form 500-13 for key officers and program managers. The requirement is disclosed in the solicitation. Budget extra lead time — vetting checks must be completed before award, and unresolved positive matches can delay or prevent program launch.

Key personnel changes during program implementation may trigger re-vetting. If you need to replace a chief of party, program director, or other key individual named in the award, notify your USAID Agreement Officer promptly. The replacement must be vetted and cleared before they can begin work on the award.

First-tier subrecipients under a vetted USAID prime award may themselves be subject to vetting requirements if USAID specifies this in the prime award terms. Organizations planning to subaward significant program responsibilities should confirm with USAID whether partner vetting flows down to subrecipients and build that requirement into their sub-award agreements and procurement timelines.

For-profit firms working under USAID cooperative agreements (as opposed to contracts) are subject to Part 701 in the same way as nonprofits. The vetting requirement follows the instrument type (cooperative agreement), not the organization type.

Positive vetting matches do not result in automatic disqualification of your organization — but the affected individual may not participate in the program. Your organization must demonstrate that it has removed the flagged individual from any role with responsibility for USAID funds or program activities before the award can move forward.

Statutory Authority

This rule implements:

• 22 U.S.C. § 2151a — Foreign Assistance Act of 1961, as amended; establishes the authority and framework for USAID's development assistance programs; provides the underlying authority for USAID to set conditions on its grant awards
• 22 U.S.C. § 2395 — Foreign Assistance Act; general provisions governing the conduct of foreign assistance programs, including authority to establish program conditions

Recent Rulemakings

No major Federal Register amendments since Part 701 was established. The vetting requirement reflects longstanding USAID counterterrorism compliance obligations under U.S. law and executive orders addressing material support for terrorism. In January–March 2025, the Trump administration largely dismantled USAID as a stand-alone agency, terminated most foreign-assistance contracts and cooperative agreements, and transferred residual functions to the Department of State. Whether 2 CFR Part 701 will be re-issued by State as the successor implementing authority remains unresolved as of 2026.

Pending Action