Foreign Contribution (Regulation) Amendment Act, 2020
The Foreign Contribution (Regulation) Act, 2010 was enacted to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.
2. The said Act has come into force on the 1st day of May, 2011 and has been amended twice. The first amendment was made by section 236 of the Finance Act, 2016 and the second amendment was made by section 220 of the Finance Act, 2018.
3. The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act. Many of them were also found wanting in ensuring basic statutory compliances such as submission of annual returns and maintenance of proper accounts. This has led to a situation where the Central Government had to cancel certificates of registration of more than 19,000 recipient organisations, including non-Governmental organisations, during the period between 2011 and 2019. The criminal investigations also had to be initiated against dozens of such non-Governmental organisations which indulged in outright misappropriation or mis-utilisation of foreign contribution.
4. Therefore, there is a need to streamline the provisions of the said Act by strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution worth thousands of crores of rupees every year and facilitating genuine non-Governmental organisations or associations who are working for the welfare of the society.
Foreign Contribution (Regulation) Amendment Act, 2020 Highlights
The Foreign Contribution (Regulation) Amendment Act, 2020 inter alia, seeks to provide for—
(a) amendment of clause (c) of sub-section (1) of section 3 to include “public servant” also within its ambit, to provide that no foreign contribution shall be accepted by any public servant;
(b) amendment of section 7 to prohibit any transfer of foreign contribution to any association/person;
(c) amendment of sub-section (1) of section 8 to reduce the limit for defraying administrative expenses from existing “fifty per cent.” to “twenty per cent.”;
(d) insertion of a new section 12A empowering the Central Government to require Aadhaar number, etc., as identification document;
(e) insertion of a new section 14A enabling the Central Government to permit any person to surrender the certificate granted under the Act;
(f) amendment of section 17 to provide that every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as ‘‘FCRA Account’’ which shall be opened by him in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify and for other consequential matters relating thereto.
6. The Bill seeks to achieve the above objects.
Effective Date:
The FCRA Act, 2020 shall come into force from 29th day of September, 2020.
MINISTRY OF HOME AFFAIRS
NOTIFICATION
New Delhi, the 29th September, 2020
S.O. 3395(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020), the Central Government hereby appoints the 29th day of September, 2020, as the date on which the provisions of the said Act, shall come into force.
[F. No. II/21022/23(35)/2019-FCRA-III]
ASHUTOSH AGNIHOTRI, Jt. Secy.