Queries regarding the implementation of the new FCRA amendments, specially transition of current activities

FCRA & FCRR
1

I have some queries regarding the implementation of the new FCRA amendments, specially transition of current activities. My queries are as under :

  1. As per the new FCRA amendments, certain activities appear to fall outside the list of permissible activities. How should organizations deal with such activities? Does the amendment provide any transition period, cooling-off period, or any other provision allowing organizations to continue such activities for the current financial year? Or are organizations required to discontinue these activities immediately from the effective date of the amendment?

  2. If the activities must be stopped immediately, how should organizations handle ongoing projects that were approved before the amendment came into effect? In such cases, what is the appropriate course of action?

  • Should the unutilized foreign contribution be returned to the donor?
  • Or should the organization discuss the matter with the donor and revise the project budget, scope of work, and MOU to ensure compliance with the amended FCRA provisions?
  1. Is there any guidance, SOP, FAQ, or clarification expected from the Ministry of Home Affairs (MHA) regarding the treatment of ongoing projects and transition arrangements under the amended provisions?

Many thanks for your valuable inputs always.

2

Thanks for your query. Our response below:

1. As per the new FCRA amendments, certain activities appear to fall outside the list of permissible activities. How should organizations deal with such activities? Does the amendment provide any transition period, cooling-off period, or any other provision allowing organizations to continue such activities for the current financial year? Or are organizations required to discontinue these activities immediately from the effective date of the amendment?

SB: Not clear about what is meant by ‘outside list of permissible activities’. Prior to amendment, FC funds were to be received for 5 objects/limbs i.e. cultural, social educational, economic and/or religious. Also, the objects/nature was clearly stated on the face of your registration certificate. What has been done through the 22.6.26 amendment is that these 5 limbs have been detailed through permissible purpose/activity which total 105 and geography. Please map FC funds received prior to the amendment for the purpose/activity now detailed for your stated object. It maybe likely that the purpose falls in another object not stated on you COR. Even so, please include that purpose for approval in Form FC 6F although it is not clear how Department would view a purpose selected which falls in another object not stated on your COR.

2. If the activities must be stopped immediately, how should organizations handle ongoing projects that were approved before the amendment came into effect? In such cases, what is the appropriate course of action?

· Should the unutilized foreign contribution be returned to the donor?

SB: There is no provision in FCRA for refund of FC to donor.

· Or should the organization discuss the matter with the donor and revise the project budget, scope of work, and MOU to ensure compliance with the amended FCRA provisions?

SB: This is a better alternative; repurposing should be attempted as a practical resolution in this case.

3. Is there any guidance, SOP, FAQ, or clarification expected from the Ministry of Home Affairs (MHA) regarding the treatment of ongoing projects and transition arrangements under the amended provisions?

SB: There is no FAQ on the amendment of 22.6.26, may wait for some more time. It is advisable to consider filing FC 6F: Scope of Registration soon specially if renewal or any other action is imminent.

Hope this clarifies.

CS Sharad Bhargava