TRACKS Act Mandates Reporting of Foreign Subawards, Even Tiny Ones, to Countries of Concern

The newly introduced Tracking Receipts to Adversarial Countries for Knowledge of Spending Act, or the TRACKS Act, is all about tightening the leash on federal money when it flows overseas. Specifically, it creates a new, mandatory reporting requirement for federal funds that end up with entities located in or designated as a “foreign country of concern” or “foreign entity of concern.” The kicker? This reporting requirement applies regardless of the dollar amount—even if the transaction is tiny.

The New Definition of a 'Covered Subaward'

If you work at a university, a non-profit, or a contractor that receives federal grants, you’re probably familiar with the concept of a subaward—when you pass a chunk of your federal funding to another group to help complete the project. The TRACKS Act clarifies this definition to ensure it covers money that gets passed down multiple times (subrecipient to subrecipient), but it specifically excludes payments made directly to beneficiaries, like welfare checks or student aid.

The real change comes with the creation of the “covered subaward.” This is any subaward that ultimately goes to a group located in a country designated as “of concern” or to a specific “foreign entity of concern.” Crucially, the bill doesn't define these terms itself; it relies on existing, politically charged definitions found in Section 9901 of the National Defense Authorization Act (NDAA). This means that if a country moves onto that list, your compliance requirements change overnight, creating a moving target for organizations trying to plan international work.

The Compliance Headache for Prime Recipients

This is where things get real for the folks handling the money. If you are the “prime award recipient”—the one who got the federal grant directly from the government—you are now tied to the reporting chain for any covered subaward that flows downstream from your funding. This means that if you give a subaward to a partner, and that partner (the subrecipient) then gives a small contract to a lab in a designated “country of concern,” you, the prime recipient, are ultimately responsible for reporting all the data about that transaction.

Think about a major research university. They might have a massive federal grant for climate research. If a small part of that grant, maybe $500 for specialized equipment or consulting, ends up with a designated entity overseas, the university now has to track and report that transaction in the same detailed way they report major domestic subawards. For busy grant administrators, tracking every micro-transaction that crosses a geopolitical line is a significant new administrative burden, especially since the bill requires this reporting regardless of how small the amount is. This could lead institutions to simply avoid working with any foreign entity just to sidestep the compliance risk.

The 90-Day Clock for Guidance

To make sure everyone is on the same page, the Director of the relevant agency has 90 days to issue guidance on how to comply. This guidance needs to standardize exactly what data agencies, prime recipients, and subrecipients must disclose. While the guidance is necessary, the short 90-day window means that organizations involved in international research, development, or aid programs will need to pivot quickly to set up new tracking systems. The goal here is increased transparency regarding where US federal dollars are going in sensitive areas, but the practical effect is a new layer of complexity for anyone managing federal funds that touch international partners.