Now, NGOs can register for foreign funds online

Filing of application forms for FCRA registration, uploading documents such as annual returns can all be completed online.

THE ENTIRE registration process under the Foreign Contribution Regulation Act, 2010 for NGOs to receive foreign funding was placed online by the government on Monday, even as Home Minister Rajnath Singh launched the revamped website of the ministry’s foreigners division.

All procedures to be followed under the FCRA, 2010 have been placed online in a bid to reduce human interaction. Meanwhile, amended rules — Foreign Contribution (Regulation) Rules, 2015 — are also being notified.

Filing of application forms for FCRA registration, uploading documents such as annual returns can all be completed online. Queries by applicants and replies from the ministry can be sent via email. Applicants will even be issued digitally signed registration certificates, and prior permission sanctions for receiving foreign funds through emails.

Source: http://indianexpress.com/article/india/india-news-india/now-ngos-can-register-for-foreign-funds-online

Revamped foreign funding rules ask NGOs to vow not to hurt India

The Union government notified on Monday new foreign funding rules asking non-governmental organisations (NGOs) to affirm every year that the money they receive from abroad is not likely to “prejudicially” affect the security, strategic, scientific or economic interest of the country.

The tweaks to the Foreign Contribution Regulation Rules comes after the Intelligence Bureau last year claimed that some foreign-funded NGOs were harming the economic interests of the country.

Additionally, the government also brought the entire process of registration of NGOs for receiving foreign funding online.

“Earlier there was simple declaration that NGOs will adhere to all provision of the act governing foreign contribution at the time of registration of any NGO. But now it will be an annual affirmation at the time of filing return and the terms used in it are very vague and broad,” said Venkatesh Nayak, coordinator of Access to Information programme, Commonwealth Human Rights Initiative (CHRI).

Amended rules say NGOs will have to affirm that any acceptance of foreign funding is not likely to affect prejudicially the sovereignty and integrity of India, public interest, freedom or fairness of elections, friendly relations with a foreign state, harmony between religious, social or linguistic groups.

Except for the clause with regard to affecting the security, strategic, scientific or economic interests of the country, rest of the clauses have been part of the Foreign Contribution Regulation Act (FCRA) that governs foreign funding. “If any NGOs violated them, their registration could have been taken back. But now it is going to be annual undertaking with the submission of return of utilisation of foreign funds. We will review them to see whether they require to be challenged in court,” said Nayak.

The centre also launched the revamped website of the FCRA wing of the foreigners division of its ministry, during which home minister Rajnath Singh said he hoped the new initiative will offer applicants the seamless services of FCRA with adequate ease and facilitation.

Under the new online system, all kinds of application forms such as those for registration, renewal, annual returns can now be filled online and documents can be uploaded. The site will also accept web payments of requisite fees.

NGOs additionally will have to put information with regard to foreign funding received and utilised on their website every three months. The ministry will also answer all queries of NGOs through emails.

Source: http://www.hindustantimes.com/india/revamped-foreign-funding-rules-ask-ngos-to-vow-not-to-hurt-india/story-eiFVoCjieHdKNwZlPd6CSP.html

Delhi HC quashes FCRA proceedings against Former Punjab MLA- holds contribution made by NRIs through proper banking channels not ‘foreign contribution’ [Read Judgment]

The contribution made by a citizen of India living in another country (Non-resident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution, the Court said quashing FCRA proceedings against the former MLA. The Delhi High Court has quashed FCRA proceedings against Former Punjab MLA, Arvind Khanna for receiving an amount of Rs.9, 04, 84,770/-from his father through eight foreign entities, without obtaining prior permission from the Central Government while he was serving as a Legislator. Justice Suresh Kait held that contribution made by an NRI, from his personal savings, through normal banking channels is not treated as foreign contribution. Background While he was serving as Legislator in Punjab assembly, Arvind Khanna received an amount of Rs.9, 04, 84,770/- from his father, through eight foreign entities, one of which is known as New Heaven Nominees’ and the other seven entities are managed by an entity known as ‘CI Law Trust’. The Ministry of Home Affairs sanctioned investigation in terms of Section 28 FCRA, 1976 alleging that the legislator received funds without obtaining prior permission of the Central Government. Accordingly, the Central Bureau of Investigation (CBI), registered the FIR mentioned above for violation of Section 23 (1) read with Section 4 (1) FCRA, 1976, against him for receiving the contribution from foreign entities without prior permission of the Central Government while he was an MLA. The former MLA, then moved a petition under Section 482 of CrPC before the High Court praying quashing of the FIR and Proceedings under FCRA. The contention of Arvind Khanna were mainly the following Amount received by him from his father, who is an Indian passport holder is a gift. The foreign entities through whom such funds were sent were holding the same on behalf of his father. Section 4 FCRA, 2010, now removes the requirement of prior permission from the Central Government. Hence he is completely exempted from any charge under Section 3 FCRA, 2010, as no prior permission is required. Section 41 FCRA, 2010, now made such offences as compoundable. FCRA, 1976 provisions Section 4(1) : No foreign contribution shall be accepted by any- (a) candidate for election, (b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper, (c) 3 [Judge, government servant] or employee of any corporation, (d) member of any Legislature, (e) political party or office-bearer thereof. Section 8(e): Nothing contained in section 4 shall apply to the acceptancefrom his relative when such foreign contribution has been received with the previous permission of the Central Government:(Whereas the FCRA, 2010 (Section 4(e)) does not require Central Government permission) Section 23: Punishment for the contravention of any provision of the Act (1) Whoever accepts, or assists any person, political party or organisation in accepting any foreign contribution or any currency from a foreign source, in contravention of any provision of this Act or any rule made thereunder, shall be punished with imprisonment for a term which may extend to five years, or with fine, or with both. Contribution made by ‘Indian’ father, not a foreign contribution The court held that contribution made by a citizen of India living in another country (NonResident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution. However, the court said that, while accepting any donation from such NRI, it is advisable to obtain his passport details to ascertain that he/she is an Indian Passport holder. Admittedly, father of the petitioner is an Indian Passport holder and transaction is through banking channel, the court observed. The court further observed that Section 4(e) completely excludes from the operation of FCRA, 2010, if any foreign contribution received from a relative. Nature of foreign sources not specifically stated In order to make out violation of Section 4 FCRA, 1976, the charge sheet must state as to from which of the foreign sources as set out in Section 2 (1) (c) FCRA, 1976, or like foreign source, the petitioner received such foreign contribution, the court said while observing that the charge sheet only states that the accused received funds from overseas firms/companies/trusts which are not registered/incorporated anywhere in India, without specifically finding the nature of foreign sources in order to bring them within the ambit of definition ‘foreign sources’, as prescribed in Section 2 (1) (e) FCRA, 1976. Accused entitled to benefit of subsequent amendment The court also observed that The FCRA, 2010 came into force w.e.f. 01.05.2011 and this Actexpands the categories of transactions exempted from the Act and further makes all offences compoundable. The court said it is settled proposition of law that where after commission of offence, there has been an amendment in the law which modifies the severity of the law or reduces the rigors of the law, then the accused is entitled to the benefit of such subsequent beneficial amendment in the law.

Read more at: http://www.livelaw.in/delhi-hc-quashes-fcra-proceedings-against-former-punjab-mla-holds-contribution-made-by-nris-through-proper-banking-channels-not-foreign-contribution/

Filing FC- Online

If you are filing FC-6 online, please scan following documents as PDF and keep them ready. Documents should be signed manually before being scanned.

1. Certificate duly signed with seal from Chartered Accountant (Registration number of Charted Accountant should be reflected on the seal). (up to 1 MB)

2. Declaration certificate from Chief Functionary duly signed with seal on the letter head of Association (up to 1 MB)

3. Audited Statements of FCRA Accounts (including Receipt and Payment Account, Income and Expenditure Statement, and Balance sheet) (up to 50 MB)

4. Copy of Statement of account from Bank duly certified by the officer of such bank. (up to 10 MB)

During filing, you will be asked to upload these documents. FC-6 need not be signed digitally. For detailed guidance, read http://fcraonline.nic.in/fc_fc3_help.pdf.

If your FC-6 return has been filed online successfully with the attachments, there is no need to send a printed copy to FCRA Dept. by registered post.

Recovering Lost FCRA Login and Password

You need online login and ID for filing FC-6 through internet. What if you have lost the ID or password and are unable to login? You can now apply online to get a new one. You will need to:

1. Scan your FCRA registration certificate,

2. Fill the application for modification online

3. Take a print of application on your letterhead

4. Scan and upload the application.

Simple enough? Visit http://fcraonline.nic.in/Fc_UserInfo_Home.aspx now to recover your lost ID or password.

Centre quizzed about implementation of FCRA

Taking up a public interest litigation, which has sought the creation of an independent body to implement the Foreign Contribution Regulation Act (FCRA), the Delhi High Court has asked the Union government about the modalities for enforcement of the statute.

A Division Bench comprising Chief Justice G. Rohini and Justice Jayant Nath asked the Centre earlier this week to file an affidavit explaining the system in place for implementing the FCRA. The court was informed that a similar matter pertaining to funding of some political parties was pending before the Supreme Court.

The matter has been posted for further hearing on February 3, 2016.

The public interest writ petition was moved by NGO Association of Democratic Reforms, contending that the FCRA’s implementation was hampered by “conflict of interest”, as the political parties allegedly violating the law have been part of the ruling establishment. The petitioner had alleged that the FCRA’s implementation appeared to be strict for NGOs, but lenient for politicians.

While seeking directions for the appointment of an independent body, free from political interference, to implement the FCRA, the petitioner NGO said the government had failed to take any action even after the High Court's judgment delivered last year, holding the BJP and Congress prima facie guilty of violating provisions of the Act.

A PIL has sought the creation of an independent body to enforce the Act

Source: http://www.thehindu.com/news/cities/Delhi/centre-quizzed-about-implementation-of-fcra/article7928511.ece

Union Minister advocates clubbing of MPLADS, CSR funds

Hyderabad, Nov 29 (INN): The Two Day National meet, held on theme 'Sustainability for inclusive growth' organized by New Delhi based NGO Greentech Foundation, concluded Saturday night here in HICC.

Union Minister of State for Science and Technology Y.S. Chowdary was the Chief Guest at the Closing Ceremony. He later presented the Greentech Lifetime Achievement Award to CMD of Neyveli Lignite Corporation Sarat Kumar Acharya.

Addressing the gathering, Y.S. Chowdary said anything sustainable is an important issue. The new companies act made 2 per cent after tax as mandatory to be spent on CSR by certain companies depends on their turnovers. Which means, effectively 2.6 per cent is the out flow to the company, since it is after the tax. So must be made us a expenditure, he said.

Chowdary suggested that MPLADS funds, coupled with the CSR (Corporate Social Responsibility) funds of the corporate companies, be directed towards implementation of government schemes. These combined efforts will create sustainable organization he said.

Corporate India needs to focus on four key areas for development of rural areas, such education, health care, employment and agriculture, Chowdary said, Government schemes have not been 'sustainable' over the years, as evident through the BPL figures in the country.

India is a developing country. It has all facilities, but only in its urban pockets. Its rural part is still languishing in poverty and deprivation, and the CSR activity should be directed towards addressing, he said. Once healthcare is addressed production will go up.

He also suggested that the Service industry which has potential in our country, should come under CSR.

Taking example of education it is well funded in many developed countries. They are self sustainable. But, that is not the case in our country. Take for instance, universities at least in Andhra Pradesh, he said despite decades of existence, they still depend on government for budgetary support, while in the West, universities are run through corporate endowments, he said. NGOs have huge potential to engage in delivery of service, and women should come forward to lead such initiatives, he added.

R. K. Dubey, Former CMD, Canara Bank, Dr. R. K. Suri, Former Director, Ministry of Environment & Forests, Government of India also graced the closing function.

Speaking to the occasion Kamleshwar Sharan, President, Greentech Foundation said Like Car Free Day observed in Delhi and Car Free Thursday in Hyderabad, we can have 'Once in a week, three Hour No Current and No AC usage' concept .

The Conference had a mix of 200 specialists, professionals and practitioners from across India. During the two day's conference the participants discussed on the topics: Best Practices; Water and Wastewater Treatment; Waste Prevention & Recycling; Solid Waste Treatment & Disposal; Emissions Control Technologies; Natural Resources Conservation; Challenges in CSR Implementation; CSR : Measuring Impact; Strategic CSR and Competitive Advantage.

Source: http://www.telugupeople.com/news/article_00100666_Union_Minister_advocates_clubbing_of_MPLADS_CSR_funds.asp

Sending FC-6 by Post

FC-6 should be filed online if you can login and have a good internet connection. If not, please file your FC-6 by registered post. Filing online is not compulsory yet.

Send your FC-6 to by registered post to:
The Secretary,
Ministry of Home Affairs,
Foreigners Division,
NDCC-II Building Jai Singh Road, OFF Parliament Street, Near Jantar Mantar
New Delhi-110 001

Don't forget to write 'For FCRA Wing' on the envelope. Always keep a copy of the covering letter, complete set and the postal receipt.

You can also check delivery of your FC-6 letter at http://www.indiapost.gov.in/speednettracking.aspx. Take a print of the delivery track and keep it on file. Just in case.

Linking businesses and NGOs for CSR

The Ministry of Corporate Affairs’ notice last year directing companies to partner with NGOs for their CSR efforts requires companies to choose partners carefully, while NGOs must focus on monitoring and other requirements—so both sides are trying to address gaps and work with each other’s strengths

The interaction between Indian corporations and non-governmental organisations (NGOs) increased after the Indian Companies Act of 2013 was passed. In a notice published by the Ministry of Corporate Affairs, companies were directed to work with partners (specifically, NGOs) who have “an established track record of three years in undertaking similar programs or projects.”

The CSR departments of some large companies have, since then, reportedly received a tremendous influx of appeals from NGOs for partnerships. However, companies have to choose partners wisely in order to ensure that their money is well spent.

The process of choosing an NGO partner typically involves a screening process. This can include a credibility test, a field visit, and background checks. It may also involve using the expertise of a CSR consulting firm. Many companies require NGOs to sign a memorandum of understanding (MoU) before entering into a partnership, and they also require monthly or annual impact assessment reports from the NGO. While these activities are essential to ensure that the NGO is reputable, it is also a financial burden for the companies as well as the NGOs. To avoid these additional costs, many companies involved in partnerships prior to the Act are simply strengthening those existing ties.

An important concern for companies is finding an organisation that has the appropriate amount of resources, knowledge, and capacity. As the Act pertains to large corporations, it follows that they are primarily looking to match up with large NGOs that fit this description. Working with reputable NGOs eliminates the worry of malpractice, while also providing a way to channel the majority of their funds and efforts.

What are the implications of this change for NGOs? Companies are demanding high standards from NGOs, especially in project monitoring. This means NGOs may have to devote more time to monitoring their projects rather than carrying them out. A Yes Bank CSR representative points out: “NGOs…don’t have the capacity or the priority to communicate and provide reporting to all the corporates that support them.” Their work is thus either diluted, or NGOs with limited human resources are not able to gain the credibility needed to hold on to partnerships. A CSR representative from Hindustan Petroleum points out that this limits the ability of grassroots organisations to gain momentum since they are not able to scale up or gain the requisite experience.

The choice companies have to make of whether to focus CSR efforts on output or outcome adds tension to the relationship. Output focuses on numbers: it is what companies put in their brochures to advertise the amount of people reached. Outcome is the long-term and lasting change created. Based on our analysis of nearly 200 companies, corporations are trending towards a focus on output rather than outcome.

In order to shift the focus, corporations and NGOs must work more collaboratively. To do so, corporates could increase the quantum of employee engagement in CSR efforts. The GMR Varalakshmi Foundation, for example, added employee’s CSR involvement to their performance reports. So far, however, this has not been a focus for most companies.

Increasing the role employees play in CSR efforts will ingrain the value of social responsibility in the company rather than it being treated as a separate unit. It will also allow for an exchange of skills between corporates and NGOs. Working with each other’s strengths and fostering a sense of shared responsibility can shift the focus to outcome rather than output.

Source: http://www.gatewayhouse.in/linking-businesses-and-ngos-for-csr

Government is likely to make further ammendents in the Companies Act

NEW DELHI: Government is likely to make further amendments in the Companies Act along with changes in certain rules as part of its efforts to provide more clarity on Corporate Social Responsibility (CSR) provisions.

A government-appointed high level panel recently submitted recommendations on CSR norms to the Corporate Affairs Ministry, which is implementing the Act.

Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least 2 per cent of their three-year annual average net profit towards CSR activities. These provisions came into force from April 2014.

Sources said an action taken report has been prepared on the recommendations made by the panel. The report has been cleared by Corporate Affairs Minister Arun Jaitley.

For further action on the panel's suggestions, the ministry is looking at various options, including possible amendments to the Companies Act, they added.

Changes would be made to certain rules related to CSR activities apart from coming out with clarifications through circulars, sources said.

While amendments to the Act need to be cleared by Parliament, rules can be changed by the ministry itself

Amid concerns over certain provisions in the new Act, the ministry had set up the committee in June this year. The panel is expected to finalise its report by December-end.

The panel, chaired by former Home Secretary Anil Baijal, was tasked to make suggestions for improved monitoring of CSR spending

"Reference to 'any financial year' in Section 135(1) of the Act, needs to be re-examined by the Ministry of Corporate Affairs with a view to making necessary amendment(s) either in Section 135(1) or in the relevant rule," the panel said.

Besides, it has called for clarification with regard to the definition of the term 'net profit' used for deciding CSR spending criteria.

Section 135 of the Act pertains to CSR.

Among others, the committee had said differential tax treatment for expenditure on various CSR activities may create unforeseen distortion in allocation of funds across development sectors.

At present, certain activities such as contribution to the Prime Minister's National Relief Fund qualify for tax exemption.

Already, the ministry has made a raft of changes to the Companies Act, 2013 -- whose most provisions came into effect from April 1, 2014. Besides, various rules have been amended.

As per the Companies Law Committee's terms of reference, it would also examine the recommendations received from the Bankruptcy Law Reforms committee, Committee on CSR, Law Commission and other agencies

Read more at: http://economictimes.indiatimes.com/news/economy/policy/companies-act-amendments-likely-for-clarity-on-csr-norms/articleshow/49788882.cms