The Foreign Contribution (Regulation) Amendment Act, 2020

The Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA 2020) has received the assent of the President on September 28, 2020.

The FCRA 2020 significantly amends the previous Foreign Contribution (Regulation) Act 2010 (FCRA) and provides for broad rules and measures which would effectively restrict access to foreign funding particularly for public servants and smaller non-governmental organizations. It adds onerous governmental oversight, additional regulations and certification processes, and operational requirements, while simultaneously reducing the limit of administrative expenditure that can be allocated to foreign contributions to 20 percent from the previous 50 percent.

Key Highlights of FCRA 2020

• Prohibits 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.
• Foreign contributions are to be used by their original recipient and can no longer be transferred to any other entity or person.
• Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document. In case of a foreigner, a copy of the passport or the Overseas Citizen of India card for identification is required.
• Foreign contribution must be received only in an account designated by the bank asFCRA 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.
• The person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the received contribution.
• 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.
• Not more than 20% of the total foreign funds received could be defrayed for administrative expenses which was 50% previously.
• The specified branch of State Bank of India shall report to the authority the prescribed amount, sources and manner of foreign remittance.
• Allows the central government to permit a person to surrender their registration certificate.

Implications on the existing FCRA registered trust /organizations:

• New bank account named FCRA Account to be opened in such branch of State Bank of India, New Delhi which will be notified by government.
• Foreign contribution shall be received only through that FCRA Account.
• One or more account may be maintained in any other scheduled bank which shall also be called as FCRA account and the foreign contribution can be transferred from SBI account to such other account for the purpose of keeping or utilizing.
• For renewal of certificate, aadhaar number of all the office bearers, directors or other key functionaries shall be provided as identification document.