Govt revises penalties under FCRA

NEW DELHI, JUN 23 (PTI): The home ministry has revised the compounding penalties for a number of offences under the Foreign Contribution (Regulation) Act (FCRA), 2010, involving the receipt and utilisation of foreign contributions by non-governmental organisations, according to a gazette notification.
The orders were notified by the ministry on Monday under powers conferred by section 41(1) of the Act.
The penalty for defraying foreign contributions beyond 20% of contributions received for administrative expenses, in contravention of section 8 of the Act, will be Rs 1 lakh or 5 per cent of the amount spent beyond the limit, whichever is higher, the notification said.
The utilisation of foreign contribution in speculative activities, in contravention of section 8(1) of Act read with rule 4 of the Foreign Contribution (Regulation) Rules, 2011, will now attract a penalty of Rs 1 lakh or 30% of the amount invested in such activities, whichever is higher. In addition, 100% of returns earned therefrom shall be recovered, it said.
In case a foreign contribution was utilised for purposes other than those for which it was received, a penalty of 30 per cent of amount utilised for purposes other than the purpose for which such foreign contribution was received, or Rs 1 lakh, whichever is higher, shall be levied, it added. A similar penalty will also be slapped in cases of accepting or utilising foreign contributions in contravention of the Act, or utilising the funds for a purpose or in a state or a UT for which registration has not been granted, it said.
In a separate notification, the government also amended the rules for receiving foreign funds, requiring NGOs to choose from a predefined list of purposes and their areas of operation, allowing a range of faith-based activities, while explicitly excluding proselytisation from several categories eligible for registration under the Act.
The ministry also said any association having foreign nationals, other than those of Indian origin, as its key functionaries will “ordinarily not be considered” for the grant of registration or prior permission to receive foreign funds under the Act.
The amended rules carved an exception, allowing the government to specify such cases or circumstances through an order in which foreign nationals may be permitted to be “key functionaries” of an association for registration or prior permission under FCRA, the notification said.
The government has notified a number of amendments in the FCRA Rules, 2011, tightening the accountability for how NGOs and other associations in India receive and use foreign money.