This note, prepared by our London office (Holborn Gate, 330 High Holborn, London, WC1V 7QH), summarises key legal and compliance considerations that arise where international development funds are directed at political participation and governance programmes. Although the subject relates to a reported USAID grant concerning Bangladesh, the observations below are framed for advisers and implementing partners based in England and Wales and are general in nature.

Legal and regulatory frameworks to consider

Grants intended to strengthen political processes intersect several overlapping legal regimes. Relevant UK and international issues typically include:

• Donor rules and US law: USAID operates under the Foreign Assistance Act and its Automated Directives System (ADS), which set eligibility, procurement and monitoring requirements for implementers and sub‑recipients.
• Anti‑corruption and bribery: The UK Bribery Act 2010 and the US Foreign Corrupt Practices Act (FCPA) can both attach to conduct by organisations or personnel linked to the UK or US; strong compliance policies and third‑party due diligence are essential.
• Sanctions and counter‑terrorism financing: UK and US sanctions regimes (and any UN measures) impose screening obligations on counterparties and can affect permitted uses of funds.
• Procurement and public law risks: Where funds are used to engage local institutions, advisers should assess procurement law, state aid and public procurement rules in the host jurisdiction.
• Data protection and confidentiality: Personal data of beneficiaries, political actors or election stakeholders may be sensitive under UK GDPR and local data laws.

Key risk areas and mitigation

Programmes dealing with politics, elections or civic mobilisation carry heightened reputational and legal risk. Common issues include the appearance of foreign interference, inadequate beneficiary vetting, misuse of funds and restricted‑party relationships. Practical mitigation steps include robust due diligence on sub‑recipients, clear contractual controls on use of funds, layered monitoring and transparent reporting to the donor.

Practical checklist for advisers and implementers

1. Confirm donor conditions: obtain and document applicable USAID/ donor rules (ADS clauses, eligibility criteria, audit and reporting obligations).
2. Conduct enhanced due diligence on potential recipients and key personnel, including sanctions and PEP screening.
3. Implement bespoke anti‑bribery and anti‑fraud policies, with training and whistleblowing channels.
4. Set clear contractual provisions for permissible activities, monitoring rights, audit access and remedies for misuse.
5. Assess data protection requirements and adopt secure data handling practices for beneficiary and electoral data.
6. Design communications plans that avoid direct involvement in domestic political campaigning and document neutrality safeguards.

Jurisdiction and sources

Advice should be tailored to the governing law of the grant and the jurisdictions in which activities occur. Key primary sources include:

• USAID (Automated Directives System)
• Foreign Assistance Act (US)
• UK Bribery Act 2010 and HM Treasury sanctions guidance
• Information Commissioner’s Office (ICO) on data protection
• Charity Commission for England and Wales where charities are involved

Regulatory arrangements for charities and certain aspects of public law differ in Scotland and Northern Ireland; advisers should check the relevant local regulator where activities touch those jurisdictions.

International development programmes with political objectives require heightened contractual discipline, layered compliance and careful public‑communications management. Early mapping of legal obligations across donor, home and host jurisdictions significantly reduces execution risk.

General information only; not legal advice and not a substitute for advice on a particular matter.