FCRA Renewal – To file or not to file now???

There is hardly a day at our
office when we do not receive queries by e mail, phone or a personal
visit, regarding FCRA renewal. Earlier this year we thought this was
the flavour of a season. It would seem now that it may go down as the
all dominating flavour of the year 2015!

At CAP, we, tongue firmly in
cheek, consider ‘FCRA Renewal’ the Mother of all FAQs. Hence the
necessity to provide this detailed analytical update. 

Is Renewal Mandatory?

Under FCRA 1976, registration once
granted did not require any renewal unless specifically cancelled by
the Ministry of Home Affairs.

However, under the new FCRA 2010
‘Registration’ is granted for a period of five years. Thus, all
registrations granted under FCRA, 1976 shall remain valid
for a period of 5 years from
the date FCRA 2010 came into force i.e., 1st May, 2011.

Thus, validity of FCRA
registration for associations granted registration prior to 1st
May 2011 is 30th April, 2016.

In other words, associations
registered under FCRA before
1st
May 2011 must apply for renewal before 30th
September 2015.

However, an Association granted
registration under FCRA, 2010, i.e., after
1st May, 2011, may apply for renewal of registration six months
before the date of expiry of the validity of its certificate of
registration.

Have Associations implementing
ongoing Multi-year projects missed the deadline?

The FC Rules state that
associations
implementing an ongoing Multi-year project should apply for
renewal twelve months before the date of expiry of the certificate of
registration.

In other words such associations
should have applied for renewal by March 2015!

However, “Ongoing multi-year project”
is nowhere stated in the FCRA 2010 let alone defined.
It would simply mean
projects that are funded in installments over a period of
3 to 5 years.

To reiterate, the requirement for
“ongoing multi-year project” to apply for renewal
12 months before expiry has been referred to in the Rules.
However, as per the Act all organisations (including those running “ongoing multi-year project”) may
also apply anytime six months before expiry of the registration. When
there is a conflict between the Rules and the Act, the Act prevails.

Thus even associations
implementing ongoing
Multi-year projects may apply anytime before 30th
September. They have NOT MISSED the deadline!

Have you registered for
availing FCRA online services?

Ministry
of Home Affairs in its latest circular dated 28th
July 2015 has announced that it will be making all FCRA services
online “in order to improve the existing services of FCRA, faster
processing and disposal of cases and also to bring transparency”.

The
circular adds that in order to avail the online services of FCRA with
ease, all associations registered under FCRA are advised to update
their latest information (particularly contact details, registration
number and FCRA bank account) in the next 15
days at the link http://fcraonline.nic.in

The
procedure is quite simple and the details asked for are quite basic.
The process can be completed quite easily within a few minutes.

Renewal
of FCRA Form FC 5 or the new (proposed) Form FC3?

Confusion,
more confusion and confusion confounded!!!

We
know of several large and small NGOs who wanting to play safe have
already applied for renewal by downloading Form FC 5 and sending it
several months ago by post along with the pay order / DD of Rs.
500/-. These envelops are lying unopened at the MHA’s office in New
Delhi and the DDs remain enchased – some have even expired after
three months. Many knew this was an exercise in futility, but, they
did this “to play on the safer side”! It gave them some sense of
comfort in complying with the law.

As
most of us are aware Form FC 5 is not available for online submission
as yet and in the meantime MHA has proposed replacing the current
Foreign Contribution
(Regulation) Rules (FCRR) 2011 with the new Foreign Contribution
(Regulation) Amendment Rules 2015.

Currently
the form for seeking Registration under FCRA is Form FC 3, for
seeking Prior Permission to receive foreign contribution is FC 4 and
for seeking renewal of registration is FC 5.

Under
the proposed new Rules MHA has sought to integrate application for
‘Registration’, ‘Prior Permission’ & ‘Renewal’ all in
one new integrated Form FC3.

Barely
6 weeks remain for that magical deadline of 30th
September 2015 and neither Form FC 5 nor the new form FC 3 is
available for online renewal.

Does
it make sense bringing in this new form at a time when about 25,000
NGOs are expected to apply for renewal of FCRA registration? We think
not!

Also,
the proposed new rules require all applications be it registration,
prior permission or renewal, to be digitally signed.

Supporting
documents that need to go with the application can be sent as scanned
copies.
Processing
Fees would also have to be paid online.

Tech
evangelism is here whether we like it or not and whether we are ready
for it or not!

NGOs
which are registered as Section 8 (old Section 25) Companies are
familiar with some of these process and procedure. But, this could
prove challenging for grassroots NGOs which are not quite tech-savvy
or struggling with internet connectivity in remote districts and
villages.

Are NGOs ready for these changes?

Will MHA extend the deadline
considering the inordinate delay on their part?

Hopefully, we will have the
answers by the end of this month.

In the meantime:

1) Associations which have already
applied by post should stay vigilant. In all likelihood they will be
required to apply afresh using the online process.

2) Keep all data and information
as required under Form FC 5 and the proposed new Form FC 3 ready.

3) Obtain Digital Signatures

4) Get tech-savvy or seek
professional help from your statutory auditors.

5) Follow this Blog for further
updates.

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