Centre amends FCRA rules

Centre amends FCRA rules allowing relatives to freely send Rs ten lakh to India

Centre has amended the rules of the Foreign Contribution Regulation Act (FCRA), allowing relatives to send more money under foreign funding and giving more time to organisations to inform the government about bank accounts for utilisation of funds received under the “registration” or “prior permission” category.

The government has also removed a provision wherein an organisation/individual receiving foreign funds had to declare such contributions every quarter on its official website.

The new rules — Foreign Contribution (Regulation) Amendment Rules, 2022 — were notified by the ministry of home affairs (MHA) through a gazette notification on Friday.

“In the Foreign Contribution (Regulation) Rules, 2011, in rule 6, for the words “one lakh rupees”, the words “ten lakh rupees” shall be substituted; and for the words “thirty days”, the words “three months” shall be substituted,” the notification stated.

Rule 6 deals with intimation of receiving foreign funds from relatives. It stated earlier that “any person receiving foreign contribution in excess of one lakh rupees or equivalent thereto in a financial year from any of his relatives shall inform the Central government (details of funds) within 30 days from the receipt of such contribution”.

The amended rule now allows relatives to send up to ₹10 lakh without informing the government. If the amount exceeds, the individuals will have three months to inform the government against 30 days earlier.

Similarly, making changes in rule 9, which deals with application of obtaining ‘registration’ or ‘prior permission’ under the FCRA to receive funds, the amended rules give individuals and organisations 45 days to inform the MHA about bank account(s) that are to be used for utilisation of such funds. This time limit was earlier 30 days.

The Centre has also omitted provision ‘b’ in rule 13, which dealt with declaring foreign funds including details of donors, amount received, and date of receipt every quarter on its website. Now, anyone receiving foreign funds under the FCRA will have to follow the existing provision of placing the audited statement of accounts on receipts and utilisation of the foreign contribution, including income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning on the first day of April, within nine months of the closure of the financial year, on its official website or on the website as specified by the Centre.

Making changes in clause (e) of sub-rule (2) of rule 9, the government has substituted the words “fifteen days” with “forty-five days”. In case of change of bank account, name, address, aims or key members of the organisation(s) receiving foreign funds, the MHA has now allowed 45 days’ time to inform it, instead of previous 15-day deadline.

In a separate notification on Friday, the MHA made five more offences under FCRA “compoundable”, making 12 such offences compoundable instead of directly prosecuting the organisations or individuals. Earlier, only seven offences under FCRA were compoundable.

“The changes are being made to reduce compliance burden,” said a senior MHA official, who did not wish to be named.

The FCRA violations that have become compoundable now include — failure to intimate about receipt of foreign funds, opening of bank accounts, and failure to place information on website etc. Earlier, offences related to accepting hospitality from foreign entity without informing, defraying of foreign funds for administrative use beyond permissible limit, receiving money in account other than specified for foreign funds and four others were compoundable. The amount of penalty ranges from ₹10,000 to ₹1 lakh or five percent of foreign funds, whichever is higher.

The FCRA Act aims at prohibiting acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.

In November 2020, the MHA made the FCRA rules stricter, stating that organisations which may not be directly linked to a political party but engage in political action like bandhs, hartal (strike) or rasta roko (road blockades) will be considered of political nature if they participate in active politics or party politics. The organisations covered under this category include farmers’ organisations, students or workers’ organisations and caste-based organisations.

In the amended FCRA — the law was amended in September 2020 — the government barred public servants from receiving foreign funding and made Aadhaar mandatory for every office-bearer of the NGOs. The new law also says that organisations receiving foreign funds will not be able to use more than 20% of such funds for administrative purposes. This limit was 50% earlier.

The ministry informed Parliament in March this year that it has refused to renew the FCRA of total 466 non-government organisations since 2020 for not fulfilling the eligibility criteria in accordance with the provisions of the law.

There were 100 refusals in 2020, 341 in 2021 and 25 till March this year, MHA said in Parliament. A key rejection was that of Oxfam India’s application for renewal of its foreign-funding licence in December 2021, which is yet to be renewed.

As of Saturday, there are 16,790 FCRA-registered organisations in the country.

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