The Foreign Contribution (Regulation) Amendment Bill 2020 was introduced in the Lok Sabha on which was notified on 22nd September 2020 as the Foreign Contribution (Regulation) Amendment Act, 2020. The Bill proposes a number of drastic changes to the Foreign Contribution (Regulation) Act, 2010 that is the law governing receipt of foreign contributions and which will have a detrimental impact on charitable institutions in India.
The Act entails the following:
- The Act prohibits public servants from accepting any foreign contributions. This bar is in addition to the ones imposed on election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, amongst others.
- The Act prohibits the transfer of foreign contributions to any other person be it an individual, association, or registered company. This, therefore, means an institution registered or having prior permission under FCRA cannot make sub-grant/s to any other intuition from foreign contributions received in its designated FCRA Bank account even if the second recipient or sub-grantee has registration or prior permission under FCRA.
- Currently, institutions are allowed to spend up to fifty percent of foreign funds received during the fiscal year on admin expenditure. The Act now has reduced it to twenty percent.
- The Ministry of Home Affairs will have the power to freeze the FCRA Bank account in case of any contravention of the FCRA law.
- Organizations applying for registration, prior permission or renewal of FCRA registration shall be required to “provide as an identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries, by whatever name called, issued under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner.”