Working for non-FCRA Partners

1. Working for non-FCRA Partners

2. Asha-India and FCRA • Asha-India has regular FCRA registration, with a separate bank account for the foreign funds. • Every year, it is required to submit a statement of accounts with full detail. • A few abroad chapters approach Asha-India to send funds to their project partners who don’t have FCRA. • All projects receiving funds through Asha-India’s FCRA account technically become Asha-India’s projects and require rigor of oversight, accounting, and reporting. • Sending funds to non Asha-India projects through this avenue is strongly discouraged, since the accounting requirements pose a significant overhead. • In exceptional instances where this is done, local Asha-India chapters of Asha are expected to take full ownership of liaisoning with the project partner, gathering receipts, utilization reports etc. • Spending on infrastructure should be avoided.

3. Project Partners and FCRA • Project Partners without their own FCRA should be strongly encouraged to apply for their own FCRA registration, or a Prior Permission. • Project stewards should work with the project partners to facilitate this. For this, they need to first understand FCRA provisions in detail.

4. Foreign Contribution Regulation Act - 1976 • Act regulates the acceptance and use of foreign contributions and hospitality. • Main Purpose is to ensure recipient institutions and individuals function in a manner consistent with the values of a Sovereign Democratic Republic and to curb the use of foreign funds and hospitality for nefarious and anti-national purposes. • Act came into force in 1976. • Act applies to all citizens of India residing in India or outside. It also applies to associates, branches or subsidiaries outside India of organizations incorporated or registered in India • Ministry of Home Affairs, Government of India, has been assigned the responsibility of its implementation • Every association having a definite cultural, economic, educational, religious or social programs, may receive foreign contributions.

5. FCRA Amendments (1985) • Amended in 1985 to remove some ambiguities, inadequacies and practical difficulties in the administration of the act and to improve monitoring. • Definition of “foreign contribution” enlarged to include funds received by subsequent recipients. Donations or Contributions received by an organization from another organization from out of foreign contributions received by the latter organization comes under the purview of FCRA now. • Associations are required to accept foreign contributions only after they were registered with the Central Government and should accept such contributions only through a specified branch of a bank. • Alternately, associations can accept foreign contributions only with the prior permission of the Central Government.

6. FCRA Amendments (1985) • Provisions for Reporting. Organizations are required to submit, within a specified time, details about the amount of foreign contribution received by them, the source from which and the manner in which such contributions are received. • Provisions were made for Audit of accounts of persons, organizations or associations, if the prescribed returns were not furnished in time or their scrutiny gives room for suspicion that the provisions of the Act had been contravened. • Penal provisions for offences under the Act. Any person convicted of an offence relating to the acceptance or utilization of foreign contributions for a second time shall be prohibited from accepting any foreign contribution for a period of three years from the date of the second conviction.

7. Statistics • Foreign Contributions increased from Rs. 24 crores in 1968 to Rs. 6256.68 crores in 2004-2005 • 30,321 organizations stood registered as on 31st March, 2005. • 8673 associations were reverted to prior permission category, on account of their failure to furnish mandatory annual FC-3 returns. • 18540 associations filed returns for 2004-2005 • 369 Organizations were granted prior permission during 2004-2005 • Chennai (Rs. 560.4 crores), Bangalore (Rs. 376.97 crores) and Mumbai (Rs. 321.82 crores) top the list of recipients.

8. Applying for FCRA Registration • Organization must already be registered under Society Registration Act or as a public trust under general law. Though FCRA does not distinguish between registered and unregistered organizations, but the implications of section 6(1) virtually ensures that only registered organizations would be able to get themselves registered as a legal entity under FCRA. Section 6(1) categorically specifies that organization having a definite cultural, economic, educational, religious or social program shall only accept foreign contribution. In the absence of registration and written documentation, it may not be possible for an organization to prove definiteness of its aims and objectives. • It is necessary to open a bank account designated for receipt of foreign contribution. The account can be opened with Indian funds before applying for registration. Subsequently, this account should exclusively remain for crediting foreign contribution only.

9. Key Requirements for Application • Form FC-8 duly filled • Audited statement of accounts for past 3 years • Note: Normally FCRA is granted after 3 years of active existence, but there is no specific time limit for making an application • Annual Report specifying activities for past 5 years • Details of beneficiaries and detail of the socio-economic factors of the region. • Geographical Detail of the state and districts proposed for work • Certified copy of registration • 80G exemption certification • Copy of any prior permission granted to the organization • Certificates from recommending organizations (District Collector, Department of the State Government, Ministry or Department of the Government of India etc) can significantly expedite the process.

10. FCRA Process • FCRA department may ask the intelligence bureau for a report. Some authorities from the intelligence bureau may visit the office and the project area and inspect books of account and other records available. • There is no time limit mentioned in FCRA either for granting or rejecting an application. Normally, it is expected to be processed in 6 months but there have been delays of 2-3 years as well. • Any authority possessing the power to register has an implicit power to reject or refuse to register, as well, but the power of refusal should not be arbitrary, ambiguous and unreasonable and should be in consonance with the purpose and intent of the Act. • Grounds for Rejection or refusal of an application for registration must be provided so that in case of an appeal, the court can examine the grounds.

11. Prior Permission Under FCRA • Prior permission is given on case-by-case basis and separate permission would be necessary for any subsequent receipt and separate transactions. • The provision reflects a delicate balance of ensuring that foreign funds are vigilantly monitored and at the same time the country does not lose valuable inflow of foreign funds. • Can be applied for at any time after legal constitution of the organization. • Application is made on form FC-1A. Documentation requirements are similar to regular FCRA in addition to a letter of commitment from the foreign donor agreeing in principle to provide funds. • Government now encouraging online filing of applications to expedite processing (www.mha.nic.in/fcraweb/fc_online.htm) • Certificates of recommendation from District Collector, Department of the State Government or Ministry or Department of the Government of India. The competent authority certifies the address and the field of activities. It also states that, there are no adverse antecedents of the organization, the proposed activities will be beneficial to the people living

12. Prior Permission Under FCRA • If an application is not disposed of within ninety days from the date of receipt, the permission shall be deemed to have been granted by the Central Government. Through a written notification of special difficulties for processing the application, the Government can take another 30 days. • After receipt of the application, the FCRA department writes to the Intelligence Bureau of the Government of India, to assess the background and the credibility of the applicant organization. The Intelligence Bureau may also assess whether the activities are sensitive to any particular religion, community, people of backward class such as SC and ST and whether the activities are anti-national in nature. • The Intelligence Bureau may visit the office of the organization and verify the books of accounts and other records available. Enquiries may also be made through the local Police Station and neighborhood people and organizations in that area and the detail of prior permission if taken earlier. • Grounds for Rejection or refusal of an application for registration must be provided so that in case of an appeal, the court can examine the grounds.

13. References • FCRA for NGOs • http://www.fcraforngos.org