Spotlight on Foreign Contribution (Regulation) Amendment Bill, 2020 [Key Highlights]

The Foreign Contribution (Regulation) Amendment Bill, 2020

Lok Sabha passed the Foreign Contribution (Regulation) Amendment Bill, 2020 on 21-09-2020.

Why has the bill been proposed?

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.

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.

Highlights of the Bill are as follows:

Prohibition to accept foreign contribution [Section 3]

No foreign contribution shall be accepted by any public servant, Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government.

Prohibition to transfer foreign contribution to other person [Section 7]

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 [Section 8]

The foreign contributions received shall be used only up to 20% which earlier was 50%.

Registration of certain persons with Central Government

[Section 11]

Only after the prior permission of the Central Government a person who is not registered shall accept the foreign contribution:

Provided that the Central Government, on the basis of any information or report, and after holding a summary inquiry, has reason to believe that a person who has been granted prior permission has contravened any of the provisions of this Act, it may, pending any further inquiry, direct that such person shall not utilise the unutilised foreign contribution or receive the remaining portion of foreign contribution which has not been received or, as the case may be, any additional foreign contribution, without prior approval of the Central Government:

Provided further that if the person referred to in sub-section (1) or in this sub-section has been found guilty.”.

Grant of Certificate of Registration [Section 12]

Every person who makes an application for grant of a certificate shall be required to open an FCRA Account in the manner mention in Section 17 Aand mention the details of such an account in his application.

Mandatory Aadhaar [Section 12 A] [New Section]

As an identification document for the purpose of this Act, Aadhaar number for all Office bearer or directors of all NGOs and other organization which is eligible for foreign contribution is mandatory. However, a passport or overseas citizen of India card is required in the case of foreign nationals.

Suspension of Certificate [Section 13]

Time limit for suspension of Certificate issued under FCRA has been stated to be as either 180 days or such further period not exceeding 180 days, as may be specified.

Surrender of Certificate [Section 14 A] [New Section]

If the Central Government is satisfied after inquiry as it deems fit, it can permit a person to surrender the certificate.

Foreign Contribution through Scheduled Bank [Section 17]

Now, under this provision, every person who has been granted a 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.

Along with the above stated key highlights, amendments under Section 15 and 16 have also been made which can be referred to in the bill below.

Please read the bill here: BILL


Lok Sabha

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