MHA (FCRA) issues two Notifications to amend Rules

At the very start of July 2022, Ministry of Home Affairs (MHA) has issued two Gazette Notifications to amend the Foreign Contribution Regulation Rules. However, this time round, the Rules (as amended) are benign and made more ‘user-friendly’.

The two Gazette Notifications dated 1st July 2022 can be read or downloaded at:

1. Click the link: https://fcra2010.in/wp-content/uploads/2022/07/2022Jul1-SO-506-Rules.pdf

2. Click the link: https://fcra2010.in/wp-content/uploads/2022/07/2022Jul01-SO-3025-Act.pdf

Changes

Window of time for intimating change widened

  • Rule 9(1)(e) required organisations ‘Registered’ under FCRA and wanting to open ‘FCRA utilization bank account’ to file online Form FC-6D within 15 days of opening an FCRA utilization bank account. The window of 15 days has now been enhanced to 45 day;
  • Rule 9(2)(e) required organisations having ‘Prior Permission’ under FCRA and wanting to open ‘FCRA utilization bank account’ to file online Form FC-6D within 15 days of opening an FCRA utilization bank account. The window of 15 days has now been enhanced to 45 day;
  • Rule 17A required organisations registered under FCRA to intimate/report any change in name or address in online Form FC-6A); any change in objects or registration in online Form FC-6B; any change in FCRA bank accounts  in online Forms FC-6C or FC-6D); and any change in the governing board in online Form FC-6E, within 15 days of the change. The window of 15 days has now been enhanced to 45 day;

Requirement to file quarterly intimation revoked

Rule 13(b) required organisations registered under FCRA to file quarterly intimation of foreign contributions received on the MHA-FCRA portal or the organization’s own website. However, Rule 13(b) is now omitted and accordingly MHA has effectively done away with this compliance.

Requirement to publish FCRA accounts on own website retained

FCRA statements of account for every financial year must mandatorily be placed on the organization’s own website. Failure to do so would attract penalty of Rs. 10,000.00 under the July 2022 amendment.

Proposed new Form for ‘Review application’

Rule 20 has been amended to provide a prescribed form and manner for filing ‘revision application’.

Prior to this amendment a ‘Review petition’ could be under Section 32 of FCRA on plain paper as per Rule 20 with a fee of Rs. 1000/- payable in favour of “Pay and Accounts Officer, Ministry of Home Affairs”, payable at New Delhi. MHA will now provide a prescribed online Form for this and probably allow fees to be paid electronically.

‘Review Petition’ is the redress mechanism under FCRA in case the organisation feels that MHA has passed an order that deserves to be reviewed. This option has been quite successfully exercised by organisations whose application for registration or renewal is erroneously rejected.

New Penalties

Under the second Notification MHA has introduced new ‘offences’ or ‘violations’ that can now be compounded with effect from 1st July 2022 by payment of a penalty.

We recommend that the entire list of compoundable offences and penalties there under be read at: https://fcra2010.in/wp-content/uploads/2022/07/2022Jul01-SO-3025-Act.pdf

Key changes

  • The penalty for accepting foreign contribution in contravention of section 11 of the Act (i.e. without having registration or prior permission) has been enhanced to one lakh rupees or thirty per cent of the foreign contribution received, whichever is higher.
  • Penalties for not intimating changes in online Forms FC6 (A, B, C, D & E) within 45 days can be compounded with a penalty of Rs. 10,000.00
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