28th September 2021

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Home | NEWS Summary | New provisions for Foreign Contributions Regulation Act (FCRA)

New provisions for Foreign Contributions Regulation Act (FCRA)

The government sought on Sunday to tighten the provisions of the Foreign Contributions Regulation Act (FCRA) of 2011 through a bill that proposes to include “public officials” in the prohibited category, to reduce administrative expenses by 20% of an organization’s foreign funds compared to 50% above, make Aadhaar mandatory for registration and empower the government to stop the use of foreign funds by an organization through “summary investigation.”

  • The bill amending the 2020 Foreign Contribution Regulations, which will be presented to Lok Sabha by Interior Minister Amit Shah at 3pm, says that the need to strengthen the law has arisen due to various organizations “embezzling or embezzle ”the funds that have led the government to cancel 19,000 such registrations in recent years.

“The annual inflow of foreign contributions almost doubled between 2010 and 2019, but many recipients of foreign contributions did not use it for the purposes for which they were registered or obtained prior authorization under said law, of these were also deemed insufficient to ensure compliance with basic laws, such as annual reporting and proper accounting. This led to a situation in which the central government had to revoke the registration certificates of more than 19,000 beneficiary organizations, including non-governmental organizations, between 2011 and 2019. Criminal investigations against dozens also had to be opened. non-governmental organizations – The government organizations that have allowed the embezzlement or embezzlement of foreign contributions ”,

specifies the account of the objects and reasons of the bill.

“by strengthening the compliance mechanism, improving transparency and accountability in the receipt and use of foreign contributions worth billions of rupees each year and by facilitating organizations without profit motive, true government agencies or associations that work for the welfare of society ”.

The government said it was necessary to simplify the provisions of said law
  • In order to amend paragraph (c) of paragraph (1) of article 3 of the law, the government proposed to include the “official” also in its scope, in order to provide that it will not accept non-foreign contributions. Previously, it was reserved for legislators, electoral candidates, journalists, print and broadcast media, judges, government officials, or employees of any company or other body that is owned or controlled by the government.
  • It also tried to prohibit any transfer of foreign contribution to any other association or person. The amendment to article 17 of the LOI was intended to establish that any person who has obtained a certificate or prior authorization under article 12 will only receive foreign contributions in an account designated as an ‘FCRA account’, which must be opened in that branch. from the State Bank of India in New Delhi, as specified by the central government by notice. However, you have authorized the organization to transfer these funds to another account for your use.
  • The government has also tried to give itself considerable powers to decide which organization, if it obtains prior permission from the government for a foreign contribution, would stop using its funds. The requested amendment to section 11 of the act empowers the government to end the use of funds received but not used after a “summary investigation.” Previously, this could only be done after the person or association had been “convicted” of breaking the law.

“Provided that the central government, on the basis of any information or report, and after conducting a summary investigation, has reason to believe that a person who has obtained prior authorization has violated any of the provisions of this law, may, pending of additional consultations, establish that said person will not use the unused foreign tax or collect the remaining part of the foreign tax that has not been collected or, as the case may be, any additional foreign contribution, without prior approval from the Central Government. ”

The amendment requested to article 11 says in the bill.
  • Regarding the suspension of registration under the law, the amendment to section 13 sought to give the government the power to decide the suspension period beyond 180 days.
  • << In Article 13 of the main law, in paragraph 1, for the words “for a period not exceeding one hundred and eighty days to be specified”, the words “for a period of one hundred and eighty days, or said additional period, not exceeding one hundred and eighty days, as specified, “will be replaced”, specifies the bill.
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