Wednesday, May 18, 2011

Regulation of Foreign Contributions: New FCR Act in Force

The Foreign Contribution (Regulation) Act, 2010 has been notified by the Central Government to come into effect from 1st May, 2011. The Act replaces the Foreign Contribution (Regulation) Act, 1976.

The FCRA 2010 extends to the whole of India and also applies to citizens of India outside India, and to foreign associate branches or foreign subsidiaries of Indian companies/bodies. The FCRA prohibits the following (among others) from accepting a foreign contribution: (a) candidates for election, (b) newspaper correspondents/contributors/publishers, (c) judges or government servants, (d) members of legislature, (e) political parties or office bearers of political parties, (f) organizations of a political nature etc. Certain payments such as salaries or payments in the ordinary course of business or payments in the course of international commerce are not hit by the prohibition. The definition of “foreign contribution” includes any articles/currency and also any securities as defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 and any foreign securities as defined in Section 2(o) of the Foreign Exchange Management Act, 1999.

A summary of the provisions of the new FCRA and the FCR Rules is found here and here.


Rohit said...

Is the new Act available online?

Mihir Naniwadekar said...

Please refer to this for the bill as passed by the Rajya Sabha: