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Foreign Contribution (Regulation) Amendment (FCRA) Bill 2020

The Government has introduced the Foreign Contribution (Regulation) Amendment (FCRA) Bill 2020 in the Lok Sabha on September 21, 2020 with twin objective to make the FCRA law more stringent and to streamline the provision of FCRA by strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilization of foreign contributions worth thousands of crores of rupees every year. 
 
The key amendments proposed in the bill are discussed hereunder: 
 
  1. Bar on public servants to accept foreign contribution: The bill proposes to widen the list of the persons who are prohibited to accept foreign contributions. Now, public servants are proposed to come under the umbrella of the prohibited list.
     
  2. Prohibition to transfer of foreign contribution to another person: Earlier, a person who was registered and granted a valid certificate could transfer to another person if he had a certificate but now, the bill seeks to prohibit transfer to another person altogether to restrict money laundering. 
     
  3. Limitation on usage of foreign funds for Administrative purpose: The bill also seeks to limit the use of foreign funds received under FCRA for administrative purposes from the current limit of 50% to 20%.
     
  4. Requirement of FCRA Account: Now, every person who makes an application under Foreign Contribution (Regulation) Act needs to open the FCRA account in a manner as specified under the Act and foreign contribution shall be received in such an account only. 
     
  5. Mandatory Aadhaar Card to receive foreign funds: The bill proposes to make Aadhaar card mandatory for all Office bearer or directors of all NGOs and other organization which is eligible for foreign contribution. However, a passport or overseas citizen of India card is required in the case of foreign national. 
     
  6. Time Limit for suspension of certificate: The Bill proposes to empower the Government to further extend the time limit for suspension of a certificate that has been issued under FCRA for a maximum limit upto 180 in addition to extant limit of 180 days.
     
  7. New provision for surrender of certificate: In order to provide an easy exit route to the genuine person, the bill proposes to introduce a new provision for surrender of certificate. If the Government is satisfied that such person has not contravened any of the provision of FCRA, then their application could be surrendered.
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