Foreign Contribution Regulation Amendment Act, 2020

 

Foreign Contribution Regulation Amendment Act, 2020 :

Foreign Contribution Regulation Amendment Act, 2020

• The Act states that foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi. No funds other than the foreign contribution should be received or deposited in this account.

• Registered NGOs can receive foreign contribution for five purposes - social, educational, religious, economic and cultural.

• An FCRA registration is mandatory for NGOs to receive foreign funds.

• The act makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.

• The act aims to enhance transparency and accountability in the receipt and utilisation of foreign contributions and facilitating the genuine non-governmental organisations or associations who are working for the welfare of society.

• It prohibits the transfer of foreign contribution to any other person.

• It bars public servants from receiving foreign contributions. Public servant includes any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty. These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, among others.

• It proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.

• It allows the government to restrict usage of unutilised foreign contribution. This may be done if, based on an inquiry the government believes that such person has contravened provisions of the FCRA.

• It allows the central government to permit a person to surrender their registration certificate. The government may do so if, post an inquiry, it is satisfied that such person has not violated any provisions of the FCRA 2010, and the management of its foreign contribution has been vested in an authority prescribed by the government

• 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 FCRA 2010.

• Recently, the Union Home Ministry has suspended licenses of the six (NGOs) who were alleged to have used foreign contributions for religious conversion.