Key Features :
The Foreign Contribution (Regulation) Amendment Act, 2020 came into effect on 29th September, 2020 seeks to combat misappropriation of foreign contribution by enhancing transparency and accountability of receipt and utilisation of foreign contributions. The Key Highlights of the amendment act are:
Prohibition to accept foreign contribution [Sec. 3]: This section describes that no foreign contribution shall be accepted by any public servant. Government servant. Judge or employee of any corporation or any other body controlled or owned by the Government
Prohibition to transfer foreign contribution to other person [Sec. 7] : This section describes that now the bill proposes the prohibition to the transfer of foreign contribution to another person and the requirement of valid certificate has also been removed i e earlier a person could transfer to the person with a valid certificate, but that has been removed now.
Restriction to utilise foreign contribution for the administrative purpose [Sec. 8] : This section reduce the limit for defraying administrative expenses from existing “fifty per cent.” to “twenty per cent
Registration of certain persons with Central Government [Sec. 11] : This section describes that only after the prior permission of the Central Government a person who is not registered shall accept the foreign contribution:
Grant of Certificate of Registration [Sec. 12] : Every person who makes an application for grant of a certificate shall be required to open an FCRA Account in the manner mentioned in Section 17 and also mention the details of such account in his application.
Mandatory Aadhaar [New Sec. 12 A]: For the purpose of this Act for all Office bearer or directors of all NGOs and other organization which is eligible for foreign contribution, Aadhaar number is mandatory as an identification document. However, a passport or overseas citizen of India card is required in the case of foreign nationals.
Suspension of Certificate [Sec. 13] : This section defines the time limit for suspension of Certificate issued under FCRA to be as either 180 days or such further period not exceeding 180 days, as may be specified.
Surrender of Certificate [New Sec. 14 A]: If the Central Government is satisfied after inquiry as it deems fit. it can permit a person to surrender the certificate granted under the Act.
Foreign Contribution through Scheduled Bank [Sec. 17] : This section provides 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.
After the Foreign Contribution (Regulation) Amendment Act, 2020 ( FCRA 2020″) came into force on September 29.2020, the Ministry of Home Affairs has notified the Foreign Contnbution Regulation (Amendment) Rules 2020 (“New Rules’). 1 The New Rules amend the Foreign Contnbution (Regulation) Rules 2011 (“2011 Rules”) and further tightens regulatory norms for organizations seeking certificate of registration under the Foreign Contribution Regulation Act. 2010 (“FCRA”). While it was anticipated that New Rules would provide certain regulatory relaxations to non-profits, it failed to provide any such concessions
The key amendments to the existing provisions of the 2011 Rules are:
- Clarification on ‘organizations of political nature’:
- Requirement of a designated FCRA account for registration, prior permission and renewal;
- Increased criterion for registration and prior permission:
- Clear consequences for non-renewal of certificate:
- Changes made to forms, i.e. provision for voluntary surrender of registration as well as additional disclosure requirements;
- Mandatory furnishing of Aadhar for transactions;
- Additional details required in Form for Annual Returns; and
- Tighter requirements for changes in the governing board;