The Home Ministry on Friday night issued two gazette notifications enacting changes to the Foreign Contribution (Regulation) Act (FCRA) and its rules, as well as foreign grants to political parties, legislators, candidates, judges, government employees, journalists and media houses, among others. Acceptance is barred – if they receive foreign grants from relatives abroad and fail to notify the government within 90 days, they will no longer be judged.
The amended rules make it a complex offense, and the recipient must pay 5% of the foreign contribution received – before, such offenses will be tried in a court of law. The new notification has increased the number of organized crimes from 7 to 12 under the law and this is one of them.
Other key changes include a rebate to the government for contributions of less than Rs 10 lakh – the previous limit was Rs 1 lakh – received from relatives abroad, and an extension of the bank account opening period.
Regarding addictive offenses, the Gazette notification states, “Failure to notify the receipt of foreign contributions within the prescribed period shall be punishable under Section 3, 11 and 35 of the Act punishable with offense 6”. “Five per cent of such foreign contributions received in a financial year.”
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The changes to the FCRA rules will come as a relief to those who are barred from accepting foreign contributions under Section 3 of the Act. The changes give companies more time to inform the government about opening bank accounts to use the funds received.
Article 3 of the FCRA states: “No foreign contribution shall be accepted by any … election candidate; Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper; Judges, government employees or employees of corporations or any other body controlled or owned by the government; A member of the legislature; Political party or its incumbents; Organizations of a political nature specified by the Central Government under sub-section (1) of section 5; Associations or companies engaged in the production or broadcast of audio news or audio visual news or current affairs programs through any electronic mode, or any other electronic form as defined in section (r) of sub-section (1) of section 2 of the Information Act, 2000 ( 21 of 2000) or any other method of mass communication; Correspondent, cartoonist, editor, association or company owner … “
An MHA official said these individuals were previously allowed to contribute up to Rs 1 lakh, but if they did not inform the government about the amount of more than Rs 1 lakh within the stipulated time, they were at risk of trial.
Another key change is in Rule 6 of the Act. The word “one lakh rupees” has been replaced by “ten lakh rupees” and the word “thirty days” has been replaced by “three months”.
Rule 6 deals with the “introduction of foreign contributions from relatives” and can receive up to Rs. 1 million from relatives abroad without informing the government of the amendment.
If the amount is more than Rs 10 lakh, the recipient will have three months instead of one month to inform the government.
“The ministry is constantly working to reduce the burden of compliance on NGOs. These steps have been taken with the same goal. This will give them more room for consent and even complicate certain crimes that were previously punishable, “said an MHA official.
Rule 9, which deals with “applying for ‘registration’ or ‘prior permission’ to receive foreign grants, has been amended by the government to give NGOs 45 days instead of 15 days to inform the union.” One or more bank accounts have been opened for the use of foreign funds received by the Home Secretary.
NGOs have been asked to extend the same time for bank account information rather than prior permission to receive foreign funds.
In Rule 13, which deals with the “declaration of receipt of foreign contributions”, the Government has deleted section (b). The clause states: “A person who receives foreign contributions in a quarter of the financial year must provide details of foreign contributions received on his official website or any website specified by the Central Government within 15 days after the last day of the quarter. The date has been clearly received. “
In Rule 17, where the NGO’s bank account, name, address, target, purpose or key members have to be notified to the Ministry within 15 days, the deadline has now been extended to 45 days.
In Rule 20, amendments have been made to ensure that applications for amendments to orders passed by “competent authorities” can also be made to the Home Secretary in electronic form. Earlier it had to be made on plain paper. However, the Ministry reserves the right to decide in which form to apply.
Compromises by the government include offenses that fall under sections 11 and 35 of the Act.
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Article 11 prohibits individuals with specific cultural, economic, educational, religious and social programs from accepting foreign contributions without registration. Section 35 provides for a five-year sentence for helping a person, a political party or an organization to obtain foreign donations in violation of the law.
Both have been complicated by fines of 5% of foreign contributions received.
The offenses under Sections 17, Sections 19 and 37 have been complicated by a fine of Rs 10,000 per bank account. Article 17 requires NGOs to open only one bank account for receiving foreign contributions but allows them to open multiple bank accounts for use. Article 19 calls on NGOs to keep track of foreign funds received and used. The law requires NGOs to inform the government about opening a bank account within 45 days. Failure to do so has now been compounded.
Section 37 deals with the penalty for breach of the FCRA where the fine is not defined and prescribes it as one year imprisonment.
Similarly, the offense of failing to inform the government about the change of bank account, name, address, target, purpose or key members of an NGO within 45 days has been complicated with a fine of Rs 10,000.
Failure to maintain an account of foreign contributions received and used in a prescribed format is punishable under Section 19 with a punishable offense and failure to set up a website within a specified time frame with a fine of up to Rs 10,000 for each offense.
