The Foreign Contribution (Regulation) Amendment Bill, 2020 has been passed  by the Lok Sabha on 21 September 2020. It makes several significant amendments to the principal Act, namely :

1. Prohibits accepting of foreign contribution by public servants: Public servants (as defined u/s 21 of the IPC) have been included within the ambit of section 3 of the principal Act related to persons who are prohibited from accepting foreign contribution.

2. Prohibits the transfer of foreign contribution to other person(s) : Under the extant provision transfer of foreign contribution was permitted if the other person was also registered and had been granted a certificate or had obtained prior permission under the Act. This has been deleted from Section 7 of the Act.

3. Aadhar number required as identification for registration/grant of registration certificate/ renewal of registration: A new Section 12A provides that the Central Government may require any person who seeks prior permission or prior approval under section 11 (Registration of certain persons with Central Government), or makes an application for grant of certificate under section 12, or for renewal of certificate under section 16, to provide the Aadhaar number of all its office bearers or Directors or other key functionaries, or a copy of the Passport or Overseas Citizen of India Card in case of a foreigner.

4. FCRA Account in specified branch of SBI, New Delhi : A new sub-section 12(1A) has been inserted to require every person applying for grant of certificate u/s 12 to open an FCRA Account and provide details of such account in his application. The manner of opening of such an account is prescribed under a substituted Section 17 (Foreign contribution through scheduled bank), that the designated “FCRA account” should be in such branch of the State Bank of India, New Delhi, as notified by the central government.  No funds other than the foreign contribution should be received or deposited in this account.  However, the person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the foreign contribution or for transferring such amount which is received in the FCRA Account in the specified branch of the SBI at New Delhi.

5. Surrender of certificate : A new section 14A provides that the Central Government may permit any person to surrender the certificate granted under the Act, if after making such inquiry as it deems fit, it is satisfied that such person has not contravened any of the provisions of the Act.

6. Suspension of certificate : Pending consideration of cancellation of certificate by the Central Government, the certificate may be suspended for a period of 180 days or such further period not exceeding 180 days.

7. Reduction in limit on defraying of administrative expenses: The limit for defraying administrative expenses has been reduced from fifty percent to twenty per cent of the contribution received in a financial year, under proviso to section 8 of the Act.

To refer to the Foreign Contribution (Regulation) Amendment Bill, 2020 as introduced, click here.