Foreign Contribution Regulation Act

 

FCRA

• FCRA seeks to “regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit [such] acceptance and utilisation for any activities detrimental to the national interest
• Implemented by the Ministry of Home Affairs.

• Enacted during the Emergency in 1976 amid apprehension that foreign powers were interfering in India’s affairs by pumping in funds through independent organisations
• An amended FCRA was enacted under the UPA government in 2010. The law was amended again by the current government in 2020, giving the government tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs. A legal challenge to the 2020 amendments was rejected by the Supreme Court in April this year.

Foreign Contribution (Regulatio2n) Act (FCRA), 2010

• Individuals are permitted to accept foreign contributions without permission of MHA. However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.
• Section 2(1)(h) : foreign contribution” means the donation, delivery or transfer made by any foreign source.
• The Act ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
• Under the Act, registered NGOs can receive foreign contributions only for the purposes of/activity related to Social, Educational, Religious, Economic and Cultural Nature.
• Under the Act, organisations are required to register themselves every five years.

Foreign Contribution (Regulation) Amendment Act, 2020 

The Act amends the Foreign Contribution (Regulation) Act, 2010.

Provisions

• Prohibition to accept foreign contribution: The Bill bars public servants from receiving foreign contributions.
• Public servant includes any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.
• The FCRA 2010 also bars certain persons to accept any foreign contribution. These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, among others.
• Transfer of foreign contribution: The Bill prohibits the transfer of foreign contribution to any other person.
• The term ‘person’ under the Bill includes an individual, an association, or a registered company.
• The FCRA 2010 allows transfer of foreign contributions to persons registered to accept foreign contributions.
• Aadhaar for registration: The Bill makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document. [Foreigners → Passport  or OCI Card]
• FCRA account: Contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi. No funds other than the foreign contribution should be received or deposited in this account.
• The person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the received contribution.
• Restriction in utilisation of foreign contribution: The Bill allows the government to restrict usage of unutilised foreign contribution. This may be done if, based on an inquiry the government believes that such person has contravened provisions of the FCRA.
• Reduction in use of foreign contribution for administrative purposes: The Bill proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.
• Surrender of certificate: The Bill allows the central government to permit a person to surrender their registration certificate.
• The government may do so if, post an inquiry, it is satisfied that such person has not violated any provisions of the FCRA 2010, and the management of its foreign contribution has been vested in an authority prescribed by the government.

FCRA Rule 22

• It allows Indians to receive up to Rs 10 lakh annually from their relatives abroad under FCRA.
• The limit earlier was Rs 1 lakh.
• If the amount exceeds, the individuals will now have 90 days to inform the government instead of 30 days earlier.
• It has given individuals and organisations or NGOs 45 days for the application of obtaining 'registration' or 'prior permission' under the FCRA to receive funds.
• Earlier it was 30 days.
• Organisations receiving foreign funds will not be able to use more than 20 % of such funds for administrative purposes.
• This limit was 50 % before 2020.
• Made five more offences under the FCRA “compoundable”, making 12, instead of directly prosecuting the organisations or individuals.
• Earlier, only seven offences under the FCRA were compoundable.

Compoundable Offences

• Compoundable offences are those offences where, the complainant (one who has filed the case, i.e., the victim), enter into a compromise, and agrees to have the charges dropped against the accused. However, such a compromise should be a "Bonafide," and not for any consideration to which the complainant is not entitled to.
• The FCRA violations which have become compoundable now include failure to intimate about receipt of foreign funds, opening of bank accounts, failure to place information on website, etc.