49 OF [31st March, ] An Act to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain persons or associations. It may be pertinent to point out here that it was the Congress, under the stewardship of Manmohan Singh, that replaced the original FCRA, Interestingly, the FCRA law deemed Indian companies as “foreign” if overseas residents held more than 50 per cent of the shareholding.

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Two years ago, the Supreme Court struck down the appeals filed by the two political parties against the Delhi high court verdict. Types of Permission i Registration under section 6 1 a ; and, ii Prior permission under section 6 1A.

Any person contravening the provisions of 196 Act shall be punishable with imprisonment for a term which may extend to five years or with fine or with both. An association having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government, or gets itself registered with the Central Government.

Foreign Contribution Regulation Act, Fdra was enacted in the year with the prime objective of regulating the acceptance and utilization of foreign contribution and foreign hospitality by persons and associations working in the important areas of national life.

Bishwajit Bhattacharyya, former additional solicitor general of India, said, “Parliament has every authority to amend laws retrospectively, but the context can be questioned in a court of law.

Additional Grounds for Rejection of Applications for Registration.

Retro rules make a comeback

Such information or intimation shall be sent by registered post. Any organisation of a political nature and any fca or company engaged in the production and broadcast of audio or audio visual news or current affairs programme have been placed in the category prohibited to accept foreign contribution.

That means these NGOs can no longer receive funds from foreign donors.

Ultimately courts can strike down such amendments. Since the FCRA Act, is national security legislation; NGOs are required to exercise extreme care and caution in dealing with foreign contribution from the time of its receipt to its final utilization.

The task force submitted its report to the Planning Commission in September In case the certificate of registration is suspended under the relevant provisions the Act, up to twenty-five per cent of the unutilised amount may be spent, with the prior approval of the Central Government, for the declared aims and objects for which the foreign contribution was received.

An association granted prior permission or registration under the Act can receive the foreign contribution and subsequently utilise it using a single designated bank account, as intimated in the application form. The Central Government may permit the transfer in respect of a person who has been granted the certificate of registration or prior permission under, in case the recipient person has not been proceeded against under any provision of the Act.

Do not deposit any local funds, other than the essential initial deposit specified by the bank for opening an account, in this account. Remember to enclose copies of the following documents with your application —. To answer that question, we need to consider the differences between the two legislations. Copy of certificate of registration issued under the Societies Registration Act, or Trust deed, as the case may be; Details of activities during the last three years; Copies of audited statement of accounts for the past three years Asset and Liabilities, Receipt 19976 Payment, Income and Expenditure ; If any printed work is brought out by fca association, a certificate from the Press Registrar that the publication is not a newspaper in terms of section 1 1 of the Press Registration of Books Act, New provision has also been made for management of foreign contribution and assets created out of such contribution of persons whose fra have been cancelled.


Retrospective yes, but without really impacting any citizen or condoning any real wrong-doing. Fcraa, FCRA registration under the earlier law was permanent, but under the new one, it expired after five years, and had to be renewed afresh.

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Prominent international funding agency Ford Foundation, the environmentalist group Greenpeace, and human rights advocacy group Lawyers Collective have all been targets of FCRA-linked curbs on their activity, suggesting a larger pattern in the way the state has used this law.

Some of the common grounds for rejection of applications are enlisted below as illustrations to bring in transparency and benefit the applicants in taking due care and caution:. Any transfer of foreign contribution shall be reflected in the prescribed returns by the transferor and the recipient.

An application for registration is normally disposed within six months. Such provisions did not exist in the repealed Act. A judgment by the Delhi high court in held that both the Bharatiya Janata Party and the Congress were guilty of receiving donations to their party funds from the Indian subsidiaries of a “foreign” company, in contravention of the FCRA Act.

Nor did it do so against the Congress, which, as the leading Opposition party, did not think it appropriate to protest this flagrant flouting of a judicial directive. Consequently, the earlier Act, viz. A new provision has been introduced to the effect that the assets of any person who has become defunct shall be disposed of in such manner as may be, specified by the Central Government.

That necessitated the first amendment, which was achieved by tweaking the Finance Bill for An association with a definite cultural, economic, educational, religious or social programme.

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While the provisions of the repealed FCRA, have generally been retained, the FCRA, is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations.

Clause of Finance Bill amends Section of the Finance Act, to regularise all donations made by “foreign” firms: Any person intending to transfer the foreign contribution may make an application to the Central Government in the prescribed Form. The District Magistrate concerned shall take an appropriate decision in the matter within sixty days of the receipt of such request from the person.

The accounting statements referred to above shall be preserved by the person for a period of six years. Who cannot Receive Foreign Contribution Foreign contribution cannot be accepted by a candidate for election; correspondent, columnist, cartoonist, editor, owner, fcda or publisher of a registered newspaper; fdra, government servant or employee of any corporation; member of any legislature; political party or office bearer thereof.


Recently, another Dcra Compassion International had to shut down India operations after the government refused permission to accept foreign funding. The return is to be submitted, in duplicate, in Form FC—3.

Put simply, a political class that has no qualms taking money from foreign sources, that amended the FCRA to let itself off the hook for past violations, that opened the doors for all political parties to accept foreign funding, that paved the way for Indian businesses to access foreign capital, is now anxious to prevent CSOs from accessing foreign funds because some of them question its policies in a democratic battle to protect constitutional rights and entitlements.

Time Taken to Dispose Application An application for registration is normally disposed within six months. Legal authorities say this is technically correct as the law was in force in those years.

The charge was led by the U. Charter for the Chartered Accountants Since the FCRA Act, is national security legislation; NGOs are required to exercise extreme care and caution in dealing with foreign contribution from the fcfa of its receipt to its final utilization.

Retro rules make a comeback

It is proposed fcrz bring the said amendment with effect from 5th August,the date of commencement of the Foreign Contribution Regulation Act,which was repealed and re-enacted as the Foreign Contribution Regulation Act, An association permitted to accept foreign contribution is required to submit an annual return, duly certifed by a Chartered Accountant, giving details of the receipt and purpose-wise utilization of the foreign contribution. One cannot deny that corrupt NGOs exist, or that unscrupulous NGOs that receive foreign funds may serve as conduits for money laundering.

Every bank shall report to such authority, as may fcga prescribed, the amount of foreign remittance received, sources and manner and other particulars. The donor shall not transfer any rcra contribution until the Central Government has approved the transfer.

Foreign fcrz received by a candidate for election, referred to in section 21, shall be furnished in the prescribed Form within forty-five tcra from the date on which he is duly nominated as a candidate for election. This instantly hands the state a whip with which to bring errant organisations to heel. Provision has been made for inspection of accounts if the registered person or person to whom prior permission has been granted fails to furnish or the intimation given is not in accordance with law.

Interestingly, the FCRA law deemed Indian companies as “foreign” if overseas residents held more than 50 per cent of the shareholding in such firms.