Section I

Introduction to FCRA, 2010

Section I

What is the purpose of FCRA, 2010?

Answer: The purpose of FCRA, 2010 is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality so as to ensure national interest.  It is a national security legislation.  Its purpose has been pronounced in the Long Title to the FCRA, 2010 as under:

“An Act to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.”

Please note that FCRA, 2010 applies to ‘certain individuals or associations or companies’, who have been categorised under the definition of ‘person’ vide Section 2(1)(m) of FCRA, 2010 to include ‒ (i) an individual; (ii) a Hindu undivided family; (iii) an association; and (iv) a company registered under section 25 of the Companies Act, 1956[1].   The expression ‘association’ means‒   an association of individuals, whether incorporated or not, having an office in India and includes a society, whether registered under the Societies Registration Act, 1860, or not, and any other organisation, by whatever name called vide Section 2(1)(a) of FCRA, 2010.

[1]  Now, Section 8 of the Companies Act, 2013.

When did FCRA, 2010 come into force?

Answer: The Foreign Contribution (Regulation) Act, 2010 (No. 42 of 2010) [FCRA, 2010] was enacted on 26^th September, 2010 vide notification dated 27^th September, 2010 in the Gazette of India, Extraordinary. However, the Act came into force with effect from 1^st May, 2011 through notification in the Gazette of India, Extraordinary vide S.O. 909 (E) dated 29^th April, 2011.

Prior to the advent of FCRA, 2010, receipt and utilisation of foreign contribution used to be regulated under the provisions of the Foreign Contribution (Regulation) Act, 1976 (FCRA, 1976) and the Foreign Contribution (Regulation) Rules, 1976.

When did FCRR, 2011 come into force?

Answer: The Foreign Contribution (Regulation) Rules, 2011 [FCRR, 2011] came into force simultaneously with FCRA, 2010 with effect from 1^st May, 2011 through notification in the Gazette of India, Extraordinary vide G.S.R. 349 (E) dated the 29^th April, 2011.

What is the status of the previous FCRA, 1976?

Answer: FCRA, 1976 as also the rules framed thereunder stand repealed from the date when FCRA, 2010 came into force.

Whether there has been any amendment to FCRA, 2010 or FCRR, 2011 after their coming into force?

Answer: FCRA, 2010 has so far been amended thrice –  (i) through insertion of a proviso to section 2(1)(j)(vi) of FCRA, 2010 w.e.f. the 26th September, 2010 vide section 236 of Finance Act, 2016; (ii) through substitution of the words, figures and letters “the 26th September, 2010”, as was mentioned in the Finance Act, 2016 by the words, figures and letters “the 5th August, 1976” through an amendment of the Finance Act, 2016 vide section 220 of Finance Act, 2018 and, (iii) the Foreign Contribution (Regulation) Amendment Act, 2020 (No. 33 of 2020) vide Notification dated the 28th September, 2020 published in the Gazette of India, Extraordinary, Part II, Section I, which has come into force from 29th September, 2020 vide Notification [S.O. 3395(E) dated the 29th September, 2020] in the Gazette of India, Extraordinary Part ‒II, Section ‒3, Sub-section (ii).  A copy of FCRA, 2010 incorporating all the amendments and references to all the notifications/orders on different issues thereon have been given (as footnotes) at Annexure-I.  The Principal Act, Notifications relating to its amendments and all other notifications/orders thereon are available in MHA’s website. [https://fcraonline.nic.in]

Till date, FCRR, 2011, have been amended eight times- (i) Foreign Contribution (Regulation) Amendment Rules, 2012 [G.S.R. 292(E) dated 12th April, 2012]; (ii) Foreign Contribution (Regulation) Amendment Rules, 2015 [G.S.R. 966(E) dated 14th December, 2015]; (iii) Foreign Contribution (Regulation) Amendment Rules, 2019 [G.S.R. 199(E) dated 7th March, 2019]; (iv) Foreign Contribution (Regulation) (Second Amendment) Rules, 2019 [G.S.R. 659(E) dated 16th September, 2019 and (v) Foreign Contribution (Regulation) Amendment Rules, 2020 [G.S.R. 695(E) dated 10th November, 2020] read with its (vi) Corrigendum vide G.S.R 17(E) dated 11/01/2021, (vii) Foreign Contribution (Regulation) Amendment Rules, 2022 [G.S.R. 506(E) dated 1st July, 2022] and, (viii) Foreign Contribution (Regulation) Amendment Rules, 2023 [G.S.R. 683(E) dated 22nd September, 2023].  A copy of the FCRR, 2011 incorporating all the amendments and references to all the notifications/orders on different issues thereon have been given (as footnotes) at Annexure-II.  The Principal Rules, Notifications relating to its amendments and all other notifications/orders thereon are available in MHA’s website. [https://fcraonline.nic.in]

Have there been other notifications/orders under the Act and the Rules?

Answer: Yes.  References to all the notifications/orders on different issues have been given in the footnotes in Annexure-I and Annexure-II. The Principal Act and Rules and all the amendments/notifications/orders thereon are available in MHA’s website. [https://fcraonline.nic.in]

To whom FCRA, 2010 is applicable?

Answer: As stated in Section 1(a) of FCRA, 2010, the provisions of the Act extend to the whole of India and also apply to:–

(a)  citizens of India outside India; and

(b)  associate branches or subsidiaries, outside India, of companies or bodies corporate, registered or incorporated in India.

Note:

Please note that the provisions of FCRA, 2010 shall not apply to any transaction between the Government of India and the Government of any foreign country or territory vide Section 51 of the Act.