Indian Context: Important Obligation To Be Adhered To Under Foreign Contribution Regulation Law

Shivam Anand, Honors Law Student, D.S. National Law University, Vishakhapatnam, India

Shivam

Key Provisions –

Under Section 2 (1)(a) “Association” means
i) an association of individuals, whether incorporated or not, having an office in India
ii) A society, whether registered under the Societies Registration Act, 1860, or not.
iii) Any other organisation, by whatever name 21 called;
As provided under Section 2 (n) “political party”:
i) An association or body of individual citizens of India which is to be registered with the Election Commission of India as a political party under Section 29A of the Representation of the People Act,1951
ii) It includes association or body of individual citizens of India which has set up candidates for election to any Legislature, but is not so registered or deemed to be registered under the Election Symbols (Reservation and Allotment) Order, 1968.

Key Obligation –

Under Chapter II dealing with “Regulation of foreign contribution and foreign hospitality” with reference to Section 3(2):
1) No person, resident in India, and no citizen of India resident outside India, shall accept any foreign contribution, or acquire or agree to acquire any currency from a foreign source, on behalf of any political party, or any person who are not allowed to receive foreign contribution with reference to Section 3(1).
2) Also, No person, resident in India or citizen of India resident outside India, shall deliver any currency accepted from any foreign source to any person if he knows or has reasonable cause to believe that such other person intends to deliver such currency to any political party or any person referred under Section 3(1).

Section 6 – Under this section:
1) No member of a Legislature or office-bearer of a political party or Judge or Government Servant or employee of any corporation or any other body owned or controlled by the Government shall, while visiting any country or territory outside India, accept, except with the prior permission of the Central Government, any foreign hospitality:
Foreign hospitality has been defined under section 2(i) as any offer, not being a purely casual one, made in cash or kind by a foreign source for providing a person with the costs of travel to any foreign country or territory or with free boarding, lodging, transport or medical treatment.
(Though leniency has been provided for an emergency medical aid required on the basis of sudden illness contracted during a visit outside India where there is no requirement of obtaining permission but the person need to provide the receipt of such hospitality within one month from the date of receipt of such hospitality along with the source and the manner in which the same was received by him.)

Section 7 – Under this given section:
1) A person registered and granted certificate or one who has obtained prior permission under FCRA,2010 to receive foreign contribution on receiving the same shall not transfer such contribution to any other person unless such other person is registered or has obtained permission to receive the foreign contribution with respect to procedure provided under FCRA.

Section 8 – Under this given section:
1) Every person registered or granted prior permission under FCRA,2010 shall not utilize the foreign contribution received by him for any other purpose other than the one for which such contribution has been received.
2) The foreign contribution shall not be utilised by such person for any speculative business( like mutual fund etc. as notified by central government to be within the ambit of speculative business).
3) It has also been provided that the person should not utilize as far as possible such sum received as foreign contribution (not exceeding 50%) in a financial year to meet any sort of administrative expenses (as notified by central government) without prior permission of central government.
Under Chapter III with deals with registration by a person for receiving foreign contribution with reference to Section 11 it has been provided that:
1) No person having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless such person obtains a certificate of registration from the Central Government.
2) The foreign contribution received by the person not registered under Section 11 (1) but obtains prior permission from central government shall be valid only for the specific purpose for which the foreign contribution has been received and from specific source. If the person is found guilty of violation of any provision of FCRA,2010 then the unutilized or unreceived amount of foreign contribution shall not be used without prior approval of the central government.

Section 12:
This section deals with the procedure of filing of application by the person for grant of certificate or prior permission from the central government with respect to form and manner along with such fee as prescribed by the central government. On receipt of an application the Central Government shall, by an order, if the application is not in the prescribed form or does not contain any of the particulars specified in that form, reject the application and if it is satisfied that all condition are satisfied then ordinarily within 90 days from the date of receipt of application give certificate or grant permission to the person subject to important terms and conditions as prescribed by the central government.
On of the most important chapter under FCRA,2010 is Chapter IV dealing with accounts, intimation, audit and disposal of assets etc.

Under Section 17(1) of this chapter:
1) Every person who has been granted a certificate or given prior permission under Section 12 shall receive foreign contribution in a single account only through such one of the branches of a bank as he may specify in his application for grant of certificate. The person is allowed to open one or more accounts in one or more banks for the utilisation of foreign contribution received by him. No funds, other than the foreign contributions is to be received or deposited in such accounts.
2) Every bank or the authorised person in foreign exchange shall report about such amount of foreign remittance, source and manner in which it was received and other information as prescribed by the central government from time to time.

Section 18:
1) As per this section every person granted a certificate or given prior approval shall give, an intimation to the Central Government within the prescribed time limit to the authority as specified by the central government about information related to the amount of foreign contribution received by such person, source of it and the manner in which it was received along with the purpose for which it is to be utilised by such person.
2) The person is obliged to submit a copy of statement about particulars of foreign contribution received which has been duly certified by the officer of the bank or authorised person in foreign exchange and submit the same to the central government.

Section 19 – Under this section every person granted a certificate or given prior approval under the Act has to maintain:
I) an account of any foreign contribution received by him
II) a record as to the manner in which such contribution has been utilised by him in the form and manner as may be prescribed by the central government.

Section 21 – Under this given section:
1) Every candidate for election, who received any foreign contribution, at any time within 180 days immediately preceding the date on which he is duly nominated as such candidate shall provide any information to the Central Government about
i) The amount of foreign contribution received by him,
ii) The source from which, and the manner in which, such foreign contribution was received.
iii) The purposes for which and the manner in which such foreign contribution was utilised by him.

Last but not the least any person who has been convicted of the offence of receiving and utilisation of foreign contribution in contravention to Foreign Contribution Regulation Act,2010, if again convicted of such offence shall not accept foreign contribution for a period of 5 years from the date of subsequent conviction under Section 38 of the Act.

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