Major Amendments in FCRA - Foreign Contribution (Regulation) Act 2020

MAJOR AMENDMENTS IN  FCRA- Foreign Contribution (Regulation) Amendment Bill, 2020

The Parliament through a voice vote
passed the Foreign Contribution (Regulation) Amendment Bill, 2020 in the
Monsoon session held in September 2020.

Foreign Contribution (Regulation)
Amendment Bill, 2020. The bill amends the Foreign Contribution (Regulation) Act
2010, which regulates the use and acceptance of foreign contribution by
individuals and organizations.

1. 
Amendment in Section 3, 7, 8,11,12 of
FCRA -Person prohibited to accept Foreign Contribution- Now Public servants are prohibited
to receive Foreign Contribution and Hospitality.

2. 
Amendment in Section 7- Prohibition
to transfer foreign contribution to other person- 

Earlier with prior approval of Central
Government a person who is registered and granted a certificate or has
obtained prior permission may transfer foreign Contribution to a person who is
registered and granted a certificate or has obtained prior permission.

Now , No person is allowed to transfer
such foreign contribution to any other person

3. 
Amendment in Section 8- Restriction
to utilise foreign contribution for administrative purpose. Earlier for
administrative expenses limit was up to 50% of foreign contribution. This amendment will curtail
administrative expenses of NGOs having foreign contribution to 20%

4. 
Amendment in Section 11-Registration
of certain persons with Central Government-

Central Government,
on the basis of any information or report, and after holding a summary inquiry,
has reason to believe that a person who has been granted prior permission has
contravened any of the provisions of this Act, it may, pending any further
inquiry, direct that such
person shall not utilise the unutilised foreign contribution or receive
the remaining portion of foreign contribution which has not been received or,
as the case may be, any additional foreign contribution, without prior approval of the
Central Government:

5. 
Amendment in Section 12-Grant of
Certificate of registration.

Every person who makes
an application under sub-section (1) shall be required to open FCRA Account in the manner
specified in section 17 and mention details of such account in his
application.".

6. 
Insertion of new Section 12A

Notwithstanding
anything contained in this Act, the Central Government may require that any
person who seeks prior permission or prior approval under section 11, or makes
an application for grant of certificate under section 12, or, as the case may
be, for renewal of certificate under section 16, shall provide as
identification document, the Aadhar
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."

Earlier providing
banking details in which foreign contribution shall be received was not
required at the time of submission of application for registration or prior permission.
This
requirement is in furtherance of transparency.

7.Amendment in
Section 13-Suspension of certificate of Registration under FCRA

           Earlier suspension of certificate
was only maximum up to

         180 days. Now Suspension may be for another
period of 180    

          days.

7. 
Insertion of new Section 14A-
Surrender of Certificate of Registration under FCRA

Provision regarding
surrender of certificate was not enumerated in the Act. Now by inserting section
14A central government allowing
a person to surrender registration certificate. Central Government may accept surrender of
certificate after a post inquiry regarding any contravention the act.

8. 
Amendment of section 16- Renewal of
Certificate

By inserting this
proviso, at the time of renewal Central Government shall make inquiry regarding
activity and compliance of the person granted certificate. Earlier provisions
were to make application before six months of expiry of certificate and Central
Government renew with 90 days of application.

9. Substitution of new
section for section 17

Opening of FCRA
Account in the State Bank of India at New Delhi

Under the act
earlier, a registered person has to receive foreign contribution in single
branch of scheduled bank. However it was allowed to open more accounts for
transfer and utilisation of foreign contribution. The amendment act introduces
an FCRA Account to be opened in specified branch of
State Bank of India, New Delhi. However another bank account may be opened to
utilise foreign contribution first received in designated FCRA Account.