TL;DR: On May 29, 2026, the White House Office of Management and Budget (OMB) published a proposed rule, Regulation for Federal Financial Assistance, that would rewrite Title 2’s Uniform Guidance (2 CFR 200) government-wide. Buried in it is a new restriction, proposed 2 CFR 200.220, that would bar recipients from spending federal award funds — direct costs, indirect costs, travel, data-sharing, the works — on collaboration with a “covered foreign country” or “covered foreign entity,” absent a statutory or agency-head exception. The rule does not itself name a list of 17 additional restricted countries. That figure comes from commentary illustrating how broadly the rule’s language could sweep — not from a designated country list in the proposal itself. This is a separate, later, and much broader action than the CHIPS and Science Act’s “countries of concern” list (China, Russia, Iran, North Korea, plus any country the Secretary of Commerce or State separately designates), which continues to apply on its own, narrower terms.
What OMB actually proposed
OMB’s Regulation for Federal Financial Assistance proposes to revise Subtitle A of 2 CFR Part 200 — the Uniform Guidance that governs how every federal grant-making agency administers grants and cooperative agreements. It was published in the Federal Register on May 29, 2026, with a 45-day comment period that closed July 13, 2026. OMB has proposed an effective date of October 1, 2026, meaning it would apply to awards issued on or after that date if finalized as written. More than 300 research, higher-education, and scientific-society organizations asked OMB to extend the comment window to August 27, 2026; as of this writing, whether OMB granted that extension had not been confirmed in agency guidance, so institutions should check the docket directly rather than assume either outcome.
The rule is broader than research security. It touches cost principles, subaward and subrecipient rules, and general award administration across the whole of federal financial assistance. But the provision drawing the most attention from research offices is the new foreign-collaboration restriction, and that is the focus of this piece. For the base framework the rule would amend, see CASRAI’s Uniform Guidance (2 CFR 200) overview and 2 CFR 200 Subpart A: Definitions and Acronyms.
The foreign-collaboration restriction, specifically
Proposed 2 CFR 200.220 would prohibit recipients and subrecipients from obligating or expending federal award funds on bilateral or multilateral collaboration with a “covered foreign country” or “covered foreign entity,” unless the collaboration is expressly authorized by statute or approved by a federal agency head (reporting suggests the exception language points to a political appointee rather than a career official, though institutions should read the docket text itself rather than rely on secondary summaries for that detail). The prohibition, as reported, would reach direct programmatic activity, research itself, technical assistance, data-sharing, travel, and the indirect costs allocable to any of that — a materially wider scope than existing, narrower foreign-country restrictions research offices already track.
The rule defines “covered foreign country” not as a fixed list but as a cross-reference: any country designated, under existing statute, Executive Order, or other federal law, as a foreign adversary, a “country of particular concern,” or a country already subject to sanctions or restrictions tied to national security, defense, or intelligence activities. That is a floating definition — it pulls in whatever a country is already designated as elsewhere in federal law, rather than enumerating a specific set of countries in the rule text itself.
Where the “17 countries” figure actually comes from
Coverage of the proposal (including reporting from the American Institute of Physics’ FYI policy bulletin and analysis from the EFI Foundation) has pointed out that the rule’s broad, cross-referencing definition of “covered foreign country” could, on a literal reading, sweep in countries far outside the usual research-security watchlist. The specific example cited: semiconductor-related export restrictions the outgoing Biden administration placed on roughly 17 European Union member states at the very end of its term, for reasons unrelated to research collaboration. Critics have used that example to argue the rule’s language is written broadly enough that it could, in theory, treat close allies as “covered foreign countries” for research-funding purposes, not just the handful of countries typically named in research-security policy.
That is a criticism about the rule’s breadth, illustrated with one example — it is not a proposed or confirmed list of 17 additional countries OMB intends to restrict. If you’ve seen this proposal described as “OMB adding 17 countries to a restricted list,” treat that framing with real caution: neither the proposed rule text nor OMB’s own summary materials designate a specific count or named list of countries. Research offices should track the rule’s actual definitional mechanism — which countries and entities are already designated as foreign adversaries or sanctioned under other federal law — rather than a fixed number that isn’t in the text.
How this differs from the CHIPS Act “countries of concern” list
It’s easy to conflate this proposal with the CHIPS and Science Act of 2022’s “countries of concern” list, but they are separate mechanisms with separate legal bases:
- CHIPS Act “countries of concern”: a named list — China, Russia, Iran, and North Korea, with authority for the Secretary of Commerce (and, in NSF’s implementation, the Secretary of State) to designate additional countries. It underpins NSF’s Foreign Financial Disclosure Reporting requirement (CHIPS Act Section 10339B) and the Malign Foreign Talent Recruitment Program prohibition, and applies primarily to specific federal research-security disclosure and eligibility requirements already in force.
- OMB’s 2026 “covered foreign country” restriction: not a named list at all — a cross-reference to whatever countries are separately designated as foreign adversaries or under national-security-related sanctions anywhere in federal law, applied government-wide to essentially all federal financial assistance, not just CHIPS-funded or NSF-funded activity, if the rule is finalized as proposed.
Put simply: the CHIPS Act list is established, named, and already operative for the programs it covers. OMB’s 2026 proposal is not-yet-final, does not name a fixed list, and would apply far more broadly if adopted. Research offices tracking both should not assume compliance with one satisfies the other. See CASRAI’s existing coverage of related restrictions: US-China Research Collaboration: Research Security and Compliance Concerns, Thousand Talents Program and Research Security, and Embargoed Countries List for Export Control for how existing, narrower country-specific restrictions currently work.
What research administrators should do now
The rule is a proposal, not yet final, so nothing in it is a binding compliance requirement today. That said, given the scope of what’s proposed, research offices are generally well served by using the comment period and run-up to any final rule to:
- Inventory current international collaborations, subawards, and data-sharing arrangements to understand exposure if a broad “covered foreign country” restriction were finalized as written.
- Track the docket directly (federalregister.gov, docket for RIN associated with the proposal) rather than relying solely on secondary summaries, since the exception mechanism, effective date, and final definition of “covered foreign entity” are all still subject to change between proposed and final rule.
- Coordinate with export-control and research-security offices already tracking CHIPS Act and sanctions-based restrictions, since a final rule modeled on this proposal would likely require reconciling multiple, differently-scoped country lists rather than replacing them with one.
- Watch for the comment-period outcome and any extension decision, since the rule’s practical timeline for institutions depends on it.
Related CASRAI resources: Export Control Reform and Research Security: What’s Changing and Why, Export Control Enforcement Trends 2026, Foreign Travel Security Policy: What Research Institutions Must Require Before International Trips, and Executive Order 14292: New Biological Research Security Requirements.
Frequently asked questions
Is this rule final?
No. As of this writing it is a proposed rule published for public comment; OMB has proposed an effective date of October 1, 2026 if finalized, but the comment period, and any changes OMB makes in response to comments, come first.
Does the rule name 17 specific countries?
No. The rule’s “covered foreign country” definition is a cross-reference to existing foreign-adversary and sanctions designations elsewhere in federal law, not an enumerated list. The “17 countries” figure circulating in commentary refers to EU member states subject to unrelated semiconductor export restrictions, cited as an example of how broadly the definition could be read — not a list the rule itself proposes.
Does this replace the CHIPS Act “countries of concern” list?
No. They are separate mechanisms. The CHIPS Act list is a named, narrower list already governing specific disclosure and funding-eligibility requirements (notably at NSF). OMB’s 2026 proposal is a broader, not-yet-final, government-wide restriction using a different, floating definition.
What federal awards would this apply to?
As proposed, it would apply government-wide to federal financial assistance — grants and cooperative agreements — administered under the Uniform Guidance, not to a single agency or program, if finalized as written.
