Friends, for the last few days you must have seen there has been much news about the cancellation of FCRA licences of many organizations. Now what is this FCRA- it is ‘The Foreign Contribution (Regulation) Act’. It assigns a very crucial role to banks. All foreign contributions(FCs) received from any foreign source (FS) must be necessarily received only in a bank account and must be routed and spent only through a bank.
The Ministry of Home Affairs (MHA) clarified two days back that 5,789 Non- Governmental Organisations (NGOs) licences to get donations from abroad under FCRA have been cancelled. It further added that these organizations did not apply for FCRA renewal despite the reminder of the ministry, so naturally, their FCRA licences automatically got cancelled on 1st January 2022.
Out of the 18,778 NGOs whose FCRA licences were supposed to be renewed between 30th September 2020 and 31st December 2021, only 12,989 organisations applied for scrutiny before the competent authority under MHA. Therefore, the authorization to receive foreign donations for 5,789 has been cancelled as of now, because of non-renewal of FCRA licence. During scrutiny, the application of 179 NGOs was rejected because of non -compliance with criteria of the amended FCRA provisions. The prominent organisations whose renewal applications were not cleared include Oxfam and the Jamia Milia Islamia.
The registration certificates of more than 20,600 NGOs and associations have been cancelled during the period from 2011 till February 2021, for violation of the various provision of FCRA act, and rules made there under. As per the amended law, providing Aadhar numbers of the office bearers of the NGO’s has been made mandatory for registration of NGOs under FCRA. Besides, with the amendments, office expenses were brought down to 20% from 50%, and election candidates, govt servants, members of any legislature and political parties were prohibited to accept foreign funding. According to the new rules issued after amending the FCRA, NGOs, which intend to receive foreign funding, must have the existence of at least three years and spent Rs 15 lakh in voluntary activities prior to their applications. The NGOs will also have to submit a specific commitment from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given.
The registration of the NGOs/organization can be cancelled under the following circumstances
- The holder of the certificate has made a statement in, or in relation to the application for the grant of registration or renewal thereof, which is incorrect or false, or
- The holder of the certificate has violated any terms and conditions of the certificate or renewal thereof, or
- In the opinion of the Central Govt, it is necessary in the public interest to cancel the certificate, or
- The holder of the certificate has violated any provision of this Act or rules or order made thereunder, or
- If the holder of a certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct.
No order of cancellation of a certificate under this section shall be made unless the person concerned has been given a reasonable opportunity of being heard.
Any person whose certificate has been cancelled shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of the certificate.
Management of FC of the person, whose licence has been cancelled
1 The foreign contribution and assets created out of the foreign Contribution in the custody of every person whose certificate has been cancelled under section 14 shall vest in such authority as may be prescribed.
2 The authority referred to in sub-section (1) may, if it considers necessary, and in public interest, manage the activities of the person referred to in That sub-section for such period and in such manner, as the Central Government may direct and such authority may utilize the foreign, Contribution or dispose of the assets created out of it in case adequate Funds are not available for running such activity.
3 The authority referred to in sub-section (1) shall return the foreign Contribution and the assets vested upon it under that sub-section to the Person referred to in the said sub-section if such person is subsequently registered under this Act.
It looks like there were to many loopholes in the earlier laws, too many NGOs misused the provisions, and siphoned foreign funds, use the funds for anti-national activities, did not file their annual returns, and did other activities from the foreign funds received which were meant for some specific purpose.
Waiting, for your views on this blog.
Anil Malik
Mumbai, India
3rd January 2022