With the Ministry of Home Affairs effecting changes in the Foreign Contribution (Regulation) Act (FCRA) and its rules through two gazette notifications Friday night, political parties, legislature members, election candidates, judges, government servants, journalists and media houses among others — all barred from receiving foreign contribution – will no longer be prosecuted if they receive foreign contribution from relatives abroad and fail to intimate the government within 90 days.
The amended rule makes this a compoundable offence, and the recipient will be required to pay 5% of the foreign contribution received — earlier, such an offence would entail prosecution in a court of law. The new notifications have increased the number of compoundable offences under the Act from 7 to 12 and this is one of them.
The other key changes are exemption from intimation to the government for contributions less than Rs 10 lakh – the earlier limit was Rs 1 lakh — received from relatives abroad, and increase in time limit for intimation of opening of bank accounts
On the compoundable offences, the gazette notification said, “Offence punishable under sections 3, 11 and 35 of the Act read with rule 6 for failure to intimate about receipt of foreign contribution within the prescribed time limit” shall be compoundable with a penalty of “Five per cent of such foreign contribution received in a financial year”.
Relief for some
The tweaks in the FCRA rules will come as a relief to those barred under Section 3 of the Act from receiving foreign contribution. The changes also give organisations more time to inform the government about opening of bank accounts for utilisation of funds received.
Section 3 of the FCRA states: “No foreign contribution shall be accepted by any… candidate for election; correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper; Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government; member of any Legislature; political party or office-bearer thereof; organisation of a political nature as may be specified under sub-section (1) of section 5 by the Central Government; association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as defined in clause (r) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000) or any other mode of mass communication; correspondent or columnist, cartoonist, editor, owner of the association or company…”
An official in the MHA said these persons were allowed to receive contribution of up to Rs 1 lakh earlier but ran the risk of prosecution if they did not inform the government about amounts in excess of Rs 1 lakh within the stipulated time.
The other key change is in Rule 6 of the Act. The words “one lakh rupees” have been replaced with “ten lakh rupees” and the words “thirty days” have been replaced by “three months”.
Rule 6 deals with “Intimation of receiving foreign contribution from relatives” and the amendment will allow individuals to receive up to Rs 10 lakh from relatives abroad without intimating the government.
In case, the amount is more than Rs 10 lakh, the receiver will get three months, instead of one, to intimate the government.
“The Ministry is constantly working to ease compliance burden on NGOs. These steps have been taken with the same objective. It will give them more room for compliance and even compound certain offences that were punishable earlier,” an official of the MHA said.
In Rule 9, which deals with “application for obtaining ‘registration’ or ‘prior permission’ to receive foreign contribution”, the government brought amendments that will now give NGOs 45 days, instead of 15 days under the earlier rule, to intimate the Union Home Secretary about one or more bank accounts opened for utilisation of foreign funds received.
The same extension of time for intimation on bank accounts has been offered to NGOs seeking prior permission for receipt of foreign funds.
In Rule 13, which deals with “declaration of receipt of foreign contribution”, the government has deleted clause (b). The clause says: “A person receiving foreign contribution in a quarter of the financial year shall place details of foreign contribution received on its official website or on a website as specified by the central government within 15 days following the last day of the quarter in which it has been received clearly indicating details of donors, amount received and date of receipt.”
In Rule 17 A, which requires NGOs to intimate the Ministry within 15 days whenever there is change in an NGO’s bank account, name, address, aims, objectives or key members, the deadline has now been increased to 45 days.
In Rule 20, amendments have been brought to ensure applications for revision of an order passed by the “competent authority” can be made to the Home Secretary in electronic form as well. Earlier it had to be made on plain paper. However, the Ministry will reserve the right to decide in what form the application needs to be made.
Among the offences made compoundable by the government are also those falling under Section 11 and 35 of the Act.
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Section 11 bars individuals having definite cultural, economic, educational, religious and social programmes from accepting foreign contributions without registration. Section 35 stipulates a punishment of five years for anyone who helps a person, a political party or an organisation in getting foreign contribution in violation of the Act.
Both have been made compoundable with a fine of 5% of the foreign contribution received.
Offences under Section 17, Section 19 and Section 37 have been made compoundable with a fine of Rs 10,000 per bank account. Section 17 asks NGOs to open only one bank account for receipt of foreign contribution but allows them to open multiple bank accounts for utilisation. Section 19 asks NGOs to maintain an account of foreign funds received and utilised. The Act asks NGOs to intimate the government about opening of bank accounts within 45 days. Failure to do so has now been made compoundable.
Section 37 deals with punishment for FCRA violations where penalty has not been defined and stipulates it as one year of imprisonment.
Similarly, the offence of failure to intimate the government about change in an NGO’s bank accounts, name, address, aims, objectives or key members within 45 days has been made compoundable with a fine of Rs 10,000.
Offences punishable under Section 19 for failure to maintain an account of foreign contribution received and utilised in a prescribed format and to be put up on a website in a prescribed time limit has also been made compoundable with a fine of Rs 10,000 for each offence.