5 CFR 2635: Federal Ethics Standards Explained

5 CFR Part 2635 is the Standards of Ethical Conduct for Employees of the Executive Branch, the single governmentwide ethics rule that federal agency staff follow on gifts, conflicting financial interests, impartiality, job seeking, misuse of position and outside activities. Its first line sets the tone: “Public service is a public trust.” For anyone who applies for, manages or reports on federal awards, it explains what the federal program staff across the table may and may not accept or do. Text below is as described on the eCFR (version dated 2026-10-01) and on the Office of Government Ethics (OGE) page, both checked on 2026-10-29.

What 5 CFR Part 2635 is and who it covers

OGE’s page for the rule is titled “Standards of Ethical Conduct for Employees of the Executive Branch” and notes that it is “Codified in 5 C.F.R. Part 2635”, as amended at 81 FR 81641 with effect from January 1, 2017. The eCFR source note for subpart H (Outside Activities) separately cites a later amendment, 89 FR 43695 (May 17, 2024), so individual subparts have been revised on different dates and the current eCFR text is the one to rely on.

The rule regulates employees. Section 2635.102(a) defines “agency” as an executive agency as defined in 5 U.S.C. 105, plus the Postal Service and the Postal Regulatory Commission, and excludes the Government Accountability Office and the government of the District of Columbia. Enlisted members of the uniformed services are outside the part (2635.103), although their agencies may issue their own rules. Under 2635.105, an agency may add supplemental agency regulations with OGE’s concurrence, and employees must follow those in addition to the part.

It is not a grantee rulebook. Conflict-of-interest duties for institutions and investigators come from award terms and funder policy; see NIH financial conflict of interest: thresholds, disclosure and management plans and the dictionary entry on conflict of interest in research. Part 2635 matters to a grants office because it limits what the agency-side counterpart can do, accept or discuss.

The 14 general principles in 2635.101(b)

Section 2635.101(b) states that the following general principles “apply to every employee and may form the basis for the standards contained in this part.” In summary, an employee:

places loyalty to the Constitution, laws and ethical principles above private gain;
does not hold financial interests that conflict with conscientious performance of duty;
does not engage in financial transactions using nonpublic information;
does not solicit or accept gifts from prohibited sources unless subpart B allows it;
puts forth honest effort in performing duties;
does not knowingly make unauthorized commitments or promises that purport to bind the government;
does not use public office for private gain;
acts impartially and does not give preferential treatment to any private organization or individual;
protects and conserves federal property and does not use it for unauthorized purposes;
does not engage in outside employment or activities, including seeking or negotiating employment, that conflict with official duties;
discloses waste, fraud, abuse and corruption to appropriate authorities;
satisfies in good faith obligations as a citizen, including financial obligations such as federal, state or local taxes;
adheres to all laws and regulations providing equal opportunity;
avoids actions creating the appearance of violating the law or the ethical standards, judged from the view of a reasonable person with knowledge of the relevant facts.

The last principle is the one most often behind agency advice to decline something that is technically allowed. Section 2635.204 says the same thing about gifts: even when an exception permits acceptance, it is “never inappropriate and frequently prudent” to decline a gift if accepting would cause a reasonable person to question the employee’s integrity or impartiality.

Subparts at a glance

The part is organised into subparts A through J. Section counts below are taken from the 2026-10-01 eCFR structure.

Subpart	Topic	Sections
A	General Provisions	7
B	Gifts From Outside Sources	6
C	Gifts Between Employees	5
D	Conflicting Financial Interests	3
E	Impartiality in Performing Official Duties	3
F	Seeking Other Employment	7
G	Misuse of Position	5
H	Outside Activities	9 (including one reserved section, 2635.806)
I	Related Statutory Authorities	2
J	Legal Expense Funds	9

For an applicant or grantee, subpart B (gifts from outside sources) is the one most likely to touch day-to-day contact with program staff.

Gift rules in subpart B: 2635.202 to 2635.204

What is prohibited

Under 2635.202, except as subpart B provides, an employee may not directly or indirectly solicit or accept a gift from a prohibited source, or a gift given because of the employee’s official position. Section 2635.203(d) defines a prohibited source as any person who is seeking official action by the employee’s agency; does business or seeks to do business with it; conducts activities regulated by it; or has interests that may be substantially affected by the performance or nonperformance of the employee’s official duties; or an organization a majority of whose members are such persons. Read that definition against your own relationship to the agency; this page is not legal advice, and an agency ethics official is the authority on a specific case.

“Gift” is defined broadly in 2635.203(b): any gratuity, favor, discount, entertainment, hospitality, loan, forbearance or other item having monetary value, including services, training, transportation, local travel, lodging and meals. The definition excludes, among other things, modest items of food and non-alcoholic refreshments such as soft drinks, coffee and donuts offered other than as part of a meal, and greeting cards and items of little intrinsic value intended primarily for presentation, such as plaques and certificates.

The $20 and $50 exception

Section 2635.204(a) allows an employee to accept unsolicited gifts “having an aggregate market value of $20 or less per source per occasion”, provided that the total from any one person under this paragraph does not exceed $50 in a calendar year. It does not apply to cash or to investment interests such as stock, bonds or certificates of deposit. If a gift is worth more than $20, the employee may not pay the excess to bring it under the limit. These dollar figures are as stated in the eCFR on the date read; section 2635.204 contains further exceptions with their own conditions, which this page does not summarise.

Compliance steps

Part 2635 binds employees, so the steps below are the ones the text itself supports, from the employee’s side and the counterpart’s side.

Identify whether the other party is an employee of an executive agency (2635.102(a)) and whether a supplemental agency regulation applies (2635.105).
Test any offered item against the gift definition (2635.203(b)) and the prohibited-source definition (2635.203(d)).
Check whether an exception such as the $20 per occasion and $50 per year rule in 2635.204(a) fits, and whether the item is cash or an investment interest, which it never covers.
Apply the appearance test from 2635.101(b)(14) and 2635.204: if a reasonable person would question impartiality, decline.
Take specific questions to the agency ethics official, who is defined in 2635.102(c) and is the person delegated to assist with the agency’s ethics program.

The part sets no application timeline of its own. What follows a violation is set by 2635.106: it “may be cause for appropriate corrective or disciplinary action” under governmentwide regulations or agency procedures, in addition to any action or penalty prescribed by law, and the employing agency is responsible for starting it. That section also says a violation of the part does not by itself create a right or benefit enforceable at law by any person against the United States.

Common mistakes

Treating it as a grantee rule. The part regulates executive branch employees. Institutional conflict rules are separate; see institutional conflict of interest and equity holdings.
Topping up a gift. Section 2635.204(a) does not let an employee pay the excess over $20 to accept the rest.
Counting the limit per event only. The $20 limit is per source per occasion, and the $50 limit is cumulative per person per calendar year.
Assuming cash is a small gift. Cash and investment interests are excluded from the exception whatever the amount.
Skipping the appearance question. A gift can fit an exception and still be one an employee should decline.
Reading only the base part. Supplemental agency regulations under 2635.105 add to it. See also appearance of a conflict of interest for the research-side analogue.

Related programs and rules

Rule or policy	Who it governs	Where on CASRAI
5 CFR Part 2635	Executive branch employees	This page
NIH Financial Conflict of Interest policy	Institutions and investigators on NIH awards	NIH financial conflict of interest
NIH Grants Policy Statement	NIH recipients	NIH Grants Policy Statement
2 CFR 200 Subpart B	Federal awards, general provisions	2 CFR 200 Subpart B

FAQ

What is 5 CFR 2635?

It is the Standards of Ethical Conduct for Employees of the Executive Branch, codified at 5 CFR Part 2635 and administered with OGE. It sets one governmentwide set of ethics standards, which agencies may supplement under 2635.105.

What is the difference between 5 CFR 2635 and 5 CFR part 2635?

Nothing. Both refer to the same regulation; “5 CFR 2635” is the common shorthand for Part 2635 of Title 5 of the Code of Federal Regulations.

How many general principles does it set out?

Fourteen, in 2635.101(b)(1) through (14), listed above.

What is the gift limit for federal employees?

Under 2635.204(a), unsolicited gifts worth $20 or less per source per occasion, up to $50 per source per calendar year, and never cash or investment interests. Other exceptions exist, and the prohibited-source rules in 2635.202 and 2635.203 decide whether a gift is restricted at all.

Does it apply to grant recipients?

The part is written for employees, so it does not itself impose duties on recipients. A recipient can be a prohibited source for agency staff, so the gift rules in subpart B can limit what agency staff accept from applicants and recipients.