Foreign Contribution (Regulation) Act, 2010 - Salient Features
THE Foreign Contribution (Regulation) Act, 2010 and the Foreign Contribution (Regulation) Rules, 2011, came into force on May 01, 2011.
The Act extends to the whole of India, to its citizens outside India and also to associate branches or subsidiaries outside India, of companies or body corporate, registered or incorporated in India.
++ The following are the persons prohibited from accepting foreign contribution:
(a) Candidate for election;
(b) Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper;
(c) Judge, government servant or employee of any entity controlled or owned by the Government;
(d) Member of any Legislature;
(e) Political party or office bearers thereof;
(f) Organisations of a political nature as may be specified;
(g) Associations or companies engaged in the production or broadcast of audio news or audio-visual news or current affairs programmes through any electronic mode or form or any other mode of mass communication;
(h) Correspondent or columnist, cartoonist, editor, owner of the association or company referred to in (g) above.
++ The Act imposes restrictions on acceptance of foreign hospitality by certain specified persons. It mandates that no member of a Legislature or office-bearer of a political party or Judge or Government servant or employee of any corporation or any other body owned or controlled by the Government shall, while visiting any country or territory outside India, accept, except with the prior permission of the Central Government, any foreign hospitality.
++ The Act imposes a prohibition, on persons registered and granted certificate or has obtained prior permission under the Act, from transferring such contribution to any other person, unless such other person is also registered and had been granted a certificate or obtained the prior permission under the Act.
++ Every person who has been granted a certificate or given prior permission under Section 12 shall receive foreign contribution in a single account only through such one of the branches of a bank as he may specify in his application for grant of certificate.
++ The Act empowers the Central Government to authorize inspection of accounts or records for verifying contravention of the provisions of the Act. It also provides for seizure of accounts and records and also articles or currency or security received in contravention of the provisions of the Act.
++ Whoever fails to comply with any provision of the Act for which no separate penalty has been provided, shall be punished with imprisonment for a term, which may extend to one year, or with fine or with both.
++ The Rules, inter alia, provide for Guidelines for the Central Government for declaration of an organisation to be of a political nature, the nature of activities which would be treated as speculative activities, what constitutes administrative expenses, procedure for availing of foreign hospitality by specified categories of persons, procedure relating to application for obtaining 'registration' or 'prior permission' to receive foreign contribution, whom to make application for compounding, procedure for transferring foreign contribution to other registered or unregistered persons, the Forms to be used for various purposes etc.