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FCRA Bill-2020

The Foreign Contribution (Regulation) Amendment Bill, 2020

The Rajya Sabha on 23rd September, through a voice vote passed the Foreign Contribution (Regulation) Amendment Bill, 2020.

The FCRA 2010 has already been amended twice. The first amendment was made by Section 236 of the Finance Act, 2016 and the second by Section 220 of the Finance Act, 2018.

The bill amends the Foreign Contribution (Regulation) Act 2010, which regulates the use and acceptance of foreign contribution by individuals and organizations. The Act prohibits foreign contribution for any activities that pose a danger to national interest.

Here are some key changes:

  • Restriction in Utilisation of Foreign Contribution: Under the Act, if a person accepting foreign contribution is found guilty of violating any provisions of the Act or the Foreign Contribution (Regulation) Act, 1976, the unutilised or unreceived foreign contribution may be utilised or received, only with the prior approval of the central government.Also the government may also restrict usage of unutilised foreign contribution for persons who have been granted prior permission to receive such contribution.This may be done if, based on a summary inquiry the government believes that such person has violated provisions of the Act.

 

  • Renewal of License: The renewal of licence every six months will be subject to a government inquiry to ensure the person putting in the application (a) is not fictitious, (b) not convicted for triggering communal tension and (c) is not guilty of diversion of funds

 

  • Transfer of Foreign Contribution: Under the Act, foreign contribution can’t be transferred to any other person unless such person is also registered to accept foreign contribution.Here the term ‘person’ under the Act includes an individual, an association, or a registered company.

 

  • FCRA Account: Under FCRA, a registered person must accept foreign contribution only in a single branch of a scheduled bank but they may open more accounts in other banks to spend the funds.The Bill says foreign contribution can now be received only in an account designated by the bank as “FCRA account” in a branch of the State Bank of India, New Delhi (as notified by the central government). No funds other than the foreign contribution should be received or deposited in this account.

 

  • Prohibition to Accept Foreign Contribution: Under FRCA,election candidates,editor or publisher of a newspaper,judges,members of any legislature & political parties are prohibited from receiving foreign donations.The Bill adds public servants (as defined under the IPC) to this list of prohibited persons.

 

  • Surrender of certificate: The Bill adds a provision allowing the central government to permit a person to surrender their registration certificate.The government may suspend the registration of a person for a period not exceeding 180 days.

 

  • Aadhaar: A key amendment proposes to introduce the requirement of Aadhaar, the biometric ID,stating that applicants must now provide Aadhaar number of all its office bearers,directors or key functionaries, as an identification document.In case of a foreigner, they must provide a copy of the passport or the Overseas Citizen of India card for identification.

 

  • The Bill reduced the limit of usable foreign contribution from 50% to 20%, which means anyone who receives foreign funding, cannot use more than 1/5th of the amount to meet administrative expenses.

The Bill assumes that all NGOs receiving foreign grants are guilty, unless prove otherwise, it said.

Minister of state (MoS), home affairs, Nityanand Rai,during the discussion on the bill,said “The FCRA is a law for national and internal security, aimed to ensure that foreign funds do not dominate the political and social discourse in India.”

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