Foreign Contribution (Regulation) Amendment Rules, 2022: Highlights & Implications

Based on the Home Ministry report on foreign contributions presented to Rajya Sabha in March 2021, NGOs working in India and registered under the Foreign Contribution (Regulation) Act have received funding of over Rs 50,975 crore from abroad in the span of four years between 2015-2020. The Foreign Contribution (Regulation) Act, 2010 and Foreign Contribution (Regulation) Rules, 2011 provide the legal mechanism to monitor the receipt and utilisation of foreign contributions received by NGOs. In exercise of the powers conferred by section 48 of the Foreign Contribution (Regulation) Act, the Central Government made amendments to the Foreign Contribution (Regulation) Rules, 2011. These rules may be called the Foreign Contribution (Regulation) Amendment Rules, 2022.

Reason for the Amendments


In order to strengthen the compliance mechanism, ease compliance burden, enhance transparency and accountability in the receipt and utilisation of foreign contributions worth thousands of crores of rupees every year and facilitate genuine non-governmental organisations or associations who are working for the welfare of society and thereby facilitate the implementation of the Foreign Contribution (Regulation) Act, 2010 and Foreign Contribution (Regulation) Rules, 2011, in letter and spirit, the Foreign Contribution (Regulation) Amendment Rules, 2022 are notified by the government.


List of Amendments


Amendments to Rule 6 – Intimation of foreign contribution received from relatives:

  1. The threshold limit for any person to receive foreign contribution from any of his relatives in a financial year without informing the central government has been increased from rupees one lakh to rupees ten lakh.
  2. Time period for intimation to Central Government regarding receipt of foreign contributions from relatives has been increased to 3 months from the existing time limit of 30 days.

 

Amendments to Rule 9 – Application for obtaining “registration” or “prior permission” to receive foreign contributions:

 

  1. One of the conditions of obtaining the FCRA registration or prior permission is that the person seeking registration be required to open an exclusive bank account to receive the foreign contribution.
  2. The person may open one or more accounts in one or more banks for the purpose of utilising the foreign contribution after it has been received and, in all such cases, intimation shall be furnished to the Secretary, Ministry of Home Affairs, New Delhi. As per the present Amendment, the time limit for such intimation is enhanced from 15 days to 45 days from the opening of any such account.
  3. As per the present amendment, this enhanced time limit of 45 days shall also be applicable to any person seeking prior permission under this rule.

Amendment to Rule 13Declaration of receipt of foreign contribution:

  1. As per the existing provisions of Rule 13(b), any person receiving foreign contribution in a quarter of the financial year, including details of donors, amount received, and date of receipt, shall place details of foreign contribution received on its official website or on the website as specified by the Central Government within fifteen days following the last day of the quarter in which it has been received clearly indicating the details of donors, amount received and date of receipt.
  2. The current amendment removes Rule 13(b) from the Rules.

Amendment to Section 17AChange of designated bank account, name, address, aims, objectives, or key members of the association:

  1. A person who has been granted a certificate of registration under section 12 or prior permission under section 11 of the Act shall intimate in electronic form the following: –
  • Name of the association or its address within the State for which registration/prior permission has been granted under the Act
  • Its nature, aims and objects and registration with local/relevant authorities
  • Bank and/or branch of the bank and/or designated foreign contribution account number.
  • Bank and/or branch of the bank for the purpose of utilising the foreign contribution after it has been received.
  • Office bearers or key functionaries or members mentioned in the application for grant of registration or prior permission or renewal of registration, as the case may be.

It is stipulated that the change will take effect only after final approval from the Central Government.

2. As per the present Amendment, the time limit for intimating such change to the competent authorities has been increased from fifteen (15) days to forty-five (45) days from the date of any such above-stated change.

 

Amendment to Rule 20:

  1. As per the existing provisions of Rule 20, an application for revision of an order passed by the competent authority, under section 32 of the Foreign Contribution (Regulation) Act, 2010, shall be made to the Secretary, Ministry of Home Affairs, Government of India, New Delhi, on plain paper along with a fee of Rs. 3,000/- only.
  2. The present Amendment provides for such application for revision of an order by the competent authority to be in such form and manner, including in electronic form, as may be specified by the Central Government.

In order to strengthen the compliance mechanism, ease compliance burden, enhance transparency and accountability in the receipt and utilisation of foreign contributions worth thousands of crores of rupees every year and facilitate genuine non-governmental organisations or associations who are working for the welfare of society and thereby facilitate the implementation of the Foreign Contribution (Regulation) Act, 2010 and Foreign Contribution (Regulation) Rules, 2011, in letter and spirit, the Foreign Contribution (Regulation) Amendment Rules, 2022 are notified by the government.

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