What is Foreign Contribution Regulation Act ?
The FCRA aims to regulate the acceptance and utilisation of foreign contribution and foreign hospitality by persons and associations .The focus of the Act is to ensure that the foreign contribution and foreign hospitality is not utilized to affect or influence electoral politics, public servants, judges and other people working the important areas of national life like journalists, printers and publishers of newspapers, etc. The Act also seeks to regulate flow of foreign funds to voluntary organizations with the objective of preventing any possible diversion of such funds towards activities detrimental to the national interest and to ensure that individuals and organizations may function in a manner consistent with the values of the sovereign democratic republic.
What is a foreign source according to the Act ?
(1) the Government of any foreign country or territory and any agency of such Government
(2) any international agency, not being the United Nations or any of its specialized agencies, the World Bank, International Monetary Fund
(3) a foreign company
(4) a corporation, not being a foreign company, incorporated in a foreign country or territory
(5) a multi-national corporation
(6) a foreign trust or a foreign foundation
(7) a citizen of a foreign country
(8) a trade union in any foreign country or territory
What is not considered as foreign contribution ?
Contributions
made by a citizen of India living in another country (i.e.,
Non-Resident Indian who still hold Indian citizenship), from his
personal savings, through the normal banking channels, is not treated as
foreign contribution.Donation from an Indian who has acquired foreign
citizenship is treated as foreign contribution. This will also apply to
PIO card holders and to Overseas Citizens of India.
Who can receive foreign contribution?
A person/ngo/trust/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.
Who cannot receive foreign contribution?
Foreign contribution cannot be accepted by :
(a) a candidate for election
(b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper
(c) Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government
(d) member of any legislature
(e) political party
(f) organization of a political nature
(g) association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode
(h) correspondent or columnist, cartoonist, editor, owner of a media company.
What are the conditions to be met for the grant of registration and prior permission to receive foreign funds under FCRA ?
(a) The 'person' making an application for registration or grant of prior permission- (i) is not fictitious or benami; (ii) has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another; (iii) has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country; (iv) has not been found guilty of diversion or mis-utilisation of its funds; (v) is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends; (vi) is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes;(vii) has not contravened any of the provisions of this Act; (viii) has not been prohibited from accepting foreign contribution; (ix) the person being an individual, such individual has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him.
(b).the acceptance of foreign contribution by the association/ person is not likely to affect prejudicially – (i) the sovereignty and integrity of India; or (ii) the security, strategic, scientific or economic interest of the State; or (iii) the public interest; or (iv) freedom or fairness of election to any Legislature; or (v) friendly relation with any foreign State; or (vi) harmony between religious, racial, social, linguistic, regional groups, castes or communities. (c) the acceptance of foreign contribution- (i) shall not lead to incitement of an offence; (ii) shall not endanger the life or physical safety of any person.
Can the NGOs invest the money received from foreign source ?
NGOs cannot use the foreign contributions for investment in Mutual Funds and other speculative investments,they cannot invest the foreign contribution received in any profitable ventures.
Is there any restriction on transfer of funds to other organisations?
The funds cannot be transferred from one organisation to other organisations unless such other person/org is also registered and had been granted the certificate or obtained the prior permission under this Act.
A person who has been granted a certificate of registration or prior permission under and intends to transfer part of the foreign contribution received by him to a person who has not been granted a certificate of registration or prior permission under the Act, may transfer such foreign contribution to an extent not exceeding ten per cent of the total value thereof and for this purpose, make an application to the Central Government.
Can the Government suspend the certificate of registration granted to a person under FCRA?
Yes
Why is FCRA in news ?
Government cancelled the registration of many NGOs over violations in the Foreign Contribution (Regulation) Act (FCRA).Use of foreign funds in the agitations and accounting irregularities led to action against NGOs under FCRA.
