New Penalties to compound FCRA offences
Ministry
of Home Affairs has issued Notification dated 5th June, 2018 S.O.
2291(E) listing offences which hitherto were not compoundable (e.g. defraying
of foreign contribution beyond fifty per cent of the contribution received for
administrative expenses).
of Home Affairs has issued Notification dated 5th June, 2018 S.O.
2291(E) listing offences which hitherto were not compoundable (e.g. defraying
of foreign contribution beyond fifty per cent of the contribution received for
administrative expenses).
For virtually every offence (save the offence of
accepting any foreign hospitality in contravention of FCRA where penalty is Rs.
10,000/) the minimum penalty is a sum of Rs. 100,000/-.
accepting any foreign hospitality in contravention of FCRA where penalty is Rs.
10,000/) the minimum penalty is a sum of Rs. 100,000/-.
The Notification also lists
officers competent for compounding such offences. In all cases it is the Director,
or as the case may be, the Deputy Secretary in-charge of the section
responsible for the administration of the Act.
officers competent for compounding such offences. In all cases it is the Director,
or as the case may be, the Deputy Secretary in-charge of the section
responsible for the administration of the Act.
The
Notification can be seen or downloaded at:
Notification can be seen or downloaded at:
This
latest Notification of 5th June 2018 is in suppression of the
notifications of the Ministry of Home Affairs Numbers S.O. 1976(E), dated the
26th August, 2011 and S.O. 2133(E), dated the 16th June, 2016. Under these earlier
Notifications offences which could be compounded were limited. However, penalties
were lower, especially with regard to late filing of returns.
latest Notification of 5th June 2018 is in suppression of the
notifications of the Ministry of Home Affairs Numbers S.O. 1976(E), dated the
26th August, 2011 and S.O. 2133(E), dated the 16th June, 2016. Under these earlier
Notifications offences which could be compounded were limited. However, penalties
were lower, especially with regard to late filing of returns.
Implications
1.
Whoever accepts, or assists any person, political party or organization in
accepting, any foreign contribution or any currency or security from a foreign
source, in contravention of any provision of FCRA or any Rule or Order made there
under, shall be punished with imprisonment for a term which may extend to five
years, or with fine, or with both.
Whoever accepts, or assists any person, political party or organization in
accepting, any foreign contribution or any currency or security from a foreign
source, in contravention of any provision of FCRA or any Rule or Order made there
under, shall be punished with imprisonment for a term which may extend to five
years, or with fine, or with both.
This offence can now be compounded
with a penalty of Rs. 10,000/-
with a penalty of Rs. 10,000/-
2. No person who
is registered and
granted a certificate under FCRA or has obtained prior permission under this
FCRA and receives any foreign contribution, shall
transfer such foreign contribution to any other person unless such other person
is also registered and had been granted the certificate or obtained the prior
permission under this Act.
is registered and
granted a certificate under FCRA or has obtained prior permission under this
FCRA and receives any foreign contribution, shall
transfer such foreign contribution to any other person unless such other person
is also registered and had been granted the certificate or obtained the prior
permission under this Act.
Contravention of
this provision can be now compounded with a penalty of Rs.
1,00,000/- or 10% of such transferred foreign contribution, whichever is
higher.
this provision can be now compounded with a penalty of Rs.
1,00,000/- or 10% of such transferred foreign contribution, whichever is
higher.
3. Organisations
registered under FCRA or having prior permission are required not to defray as
far as possible such sum, not exceeding fifty per cent of such contribution,
received in a financial year, to meet administrative expenses, without prior
permission of MHA.
registered under FCRA or having prior permission are required not to defray as
far as possible such sum, not exceeding fifty per cent of such contribution,
received in a financial year, to meet administrative expenses, without prior
permission of MHA.
Contravention of this provision can now
be compounded with penalty of Rs. 1,00,000/- or 5% of such foreign contribution
so defrayed beyond the permissible limit, whichever is higher.
be compounded with penalty of Rs. 1,00,000/- or 5% of such foreign contribution
so defrayed beyond the permissible limit, whichever is higher.
4.
No person having a definite cultural,
economic, educational, religious or social programme shall accept foreign
contribution without either having prior permission or registration under FCRA.
No person having a definite cultural,
economic, educational, religious or social programme shall accept foreign
contribution without either having prior permission or registration under FCRA.
Contravention of this provision can now be compounded with penalty of Rs.
1,00,000/- or 10% of the foreign contribution received, whichever is higher.
1,00,000/- or 10% of the foreign contribution received, whichever is higher.
5 a. All foreign contributions must be received only in the FCRA Bank
account specified in the application for grant of prior permission or
registration certificate under FCRA. Receiving
foreign contribution in any account other than the specified account is an
offence.
account specified in the application for grant of prior permission or
registration certificate under FCRA. Receiving
foreign contribution in any account other than the specified account is an
offence.
This offence can now be compounded with penalty of Rs. 1,00,000/- or 5%
of the foreign contribution received in such account, whichever is higher.
of the foreign contribution received in such account, whichever is higher.
5b. Not reporting the prescribed amount of foreign remittance or source and
manner of such remittance by banks and authorized persons too is an offence
but now compoundable with penalty Rs.
1,00,000/- or 3% of the foreign contribution received or deposited in such
account, whichever is higher.
manner of such remittance by banks and authorized persons too is an offence
but now compoundable with penalty Rs.
1,00,000/- or 3% of the foreign contribution received or deposited in such
account, whichever is higher.
5c. Receiving & depositing any fund other than foreign contribution (local
or non FC funds) in the account or accounts opened for receiving foreign
contribution or for utilizing the foreign contribution is also an offence,
but, now compoundable with penalty of Rs.
1,00,000/- or 2% of such deposit, whichever is higher
or non FC funds) in the account or accounts opened for receiving foreign
contribution or for utilizing the foreign contribution is also an offence,
but, now compoundable with penalty of Rs.
1,00,000/- or 2% of such deposit, whichever is higher
6. Organisations are required
to intimate the amount of each foreign contribution received and the source
from which and in the manner in which, such foreign contribution is received both
quarterly as also by filing annual return in Form FC 4.
to intimate the amount of each foreign contribution received and the source
from which and in the manner in which, such foreign contribution is received both
quarterly as also by filing annual return in Form FC 4.
Failure to comply can now be compounded with penalty of Rs. 1,00,000/-
or 5% of the foreign contribution received during the period of non submission,
whichever is higher.
or 5% of the foreign contribution received during the period of non submission,
whichever is higher.
7. Every organization which
has prior permission or registration under FCRA is required to maintain books
of account and records of foreign contribution received and manner of its utilization.
has prior permission or registration under FCRA is required to maintain books
of account and records of foreign contribution received and manner of its utilization.
Contravention of this provision can now be compounded with penalty of Rs.
1,00,000/- or 5% of the foreign contribution during the relevant period of not
maintaining accounts, whichever is higher.
1,00,000/- or 5% of the foreign contribution during the relevant period of not
maintaining accounts, whichever is higher.
In case of multiple offences
MHA has clarified that in case
more than one offence has been committed by a person/organisation, the total
amount of compounding for such offences shall not be more than the value of the
foreign contribution involved.
more than one offence has been committed by a person/organisation, the total
amount of compounding for such offences shall not be more than the value of the
foreign contribution involved.