• The Centre told the Supreme Court that the right to receive foreign contributions is not a fundamental right and if it is unregulated, it may result in “devastating consequences”.

• The Supreme Court bench reserved its judgment on a batch of pleas including those which have raised issues concerning the Foreign Contribution Regulation (Amendment) Act, 2020.

• Defending the amendments carried out in the Foreign Contribution (Regulation) Act, the government told a bench that the objective of the changes is to streamline the compliance mechanism and enhance transparency and accountability.

• During the hearing, the bench asked Solicitor General Tushar Mehta about the issues pertaining to foreign contributions being dealt with by the ministry of home affairs (MHA).

• Mehta said from the inception of this legislation, the MHA is dealing with these issues as there may be possibility of contributions coming from foreign countries or offshore organisations being misused with an aim to destabilise the internal security of the nation.

• He noted that there have been instances of inputs from the Intelligence Bureau (IB) that some foreign contributions received are being misused to fund training of Naxals.

• The Solicitor General said that every foreign contribution will be received only in an account designated as FCRA account which shall be opened in State Bank of India (SBI) main branch at New Delhi.

Foreign Contribution (Regulation) Act

• The Foreign Contribution (Regulation) Act, 2010, came into effect in 2011. 

• It has been enacted by Parliament to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to national interest and for matters connected therewith or incidental thereto.

• While the provisions of the repealed FCRA, 1976, have generally been retained, the FCRA, 2010, is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations.

• In September 2020, the Parliament passed the Foreign Contribution (Regulation) Amendment Bill, 2020. It received the Presidential assent on September 28, 2020.

Key provisions of the FCRA:

1) A person who is registered under this Act cannot transfer foreign contribution to any other person. The term ‘person’ under the Act includes an individual, an association, or a registered company.

2) The following are prohibited to receive foreign contribution:

• Candidate for election, MPs, MLAs.

• Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper.

• Public servant, judge or employee of any corporation or any other body controlled or owned by the government. Public servant means any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.

• Political party or office bearer thereof.

3) Providing the Aadhaar number of the office-bearers of an NGO is mandatory for the registration of the organisation under the FCRA. In case of a foreigner, a copy of the passport or Overseas Citizen of India Card is a must. 

4) Every person who has been granted certificate or prior permission shall receive foreign contribution only in an account designated as ‘FCRA Account’ by the bank, which shall be opened by the person in the State Bank of India in New Delhi. No funds other than foreign contribution shall be received or deposited in any such account.

However, the person can open another ‘FCRA Account’ in any of the scheduled banks for the purpose of keeping or utilising the foreign contribution which has been received from SBI branch in New Delhi.

5) Maximum limit for utilising foreign contribution for administrative (office) expenses have been brought down to 20 per cent. Earlier, it was 50 per cent.

6) On the basis of any information or report and after holding a summary inquiry, if a person is found to have contravened any of the provisions of this Act, the central government can direct that such person shall not utilise the remaining foreign contribution without prior approval.

7) The central government may permit any person to surrender the registration certificate, if it is confirmed that such person has not contravene any of the provisions of the Act, and the management of foreign contribution and asset has been vested in the authority.

8) Earlier, the government could suspend the registration for only 180 days during which no foreign funding could be received. Following the amendment, it has been extended to up to 180 additional days.

9) Before renewing the certificate, the government may make an inquiry to satisfy itself that the person has fulfilled following conditions:

• The person is not fictitious or benami.

• Has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another.

• Has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country.

• Has not been found guilty of diversion or mis-utilisation of its funds.

• The person is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends.

• The person is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes.

• Has not contravene any of the provisions of the Act.

• Has not been prohibited from accepting foreign contribution.

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