The Central Bureau of Investigation conducted searches on the premises of the NewClick founder after registering a case alleging a violation of the Foreign Contribution (Regulation) Act (FCRA).

The FCRA was enacted in 1976 to regulate foreign money into the country through independent organizations.

The Foreign Contribution Regulation Act was amended by the Indian Parliament in 2010.

To effectively regulate the foreign contribution by individuals or associations or companies.

The Union Minister of Home Affairs introduced the Foreign Contribution (Regulation) Amendment Bill in 2020, which made several changes.

1. Definition of Foreign Contribution: The FCRA defines "foreign contribution" as the donation, delivery, or transfer of any currency, security, or article, by a foreign source.
2. Registration and Prior Permission: Organizations that intend to receive foreign contributions need to register under the FCRA or obtain prior permission from the central government. The registration is granted by the Ministry of Home Affairs, Government of India.
3. Prohibited Activities: FCRA prohibits the acceptance of foreign contributions for activities that may affect the sovereignty and integrity of India, public order, friendly relations with foreign states, and for activities that are likely to affect the electoral process.
4. Accounting and Utilization of Funds: Organizations receiving foreign contributions are required to maintain a separate bank account, and funds received must be utilized for the specific purpose for which they were received.
5. Reporting: Registered organizations must submit annual reports detailing the foreign contributions received and the manner in which they were utilized. These reports are to be submitted to the Ministry of Home Affairs.
6. Renewal of Registration: The registration granted under FCRA is initially valid for five years. Organizations need to apply for renewal within six months of the expiration of the registration.
7. Penalties for Violation: Violation of FCRA provisions can result in penalties, including cancellation of registration, forfeiture of assets derived from foreign contributions, and imprisonment.
8. Designated Banks: The Act specifies that foreign contributions must be received only in accounts by the organizations in banks that are authorized to deal with foreign exchange.

The FCRA aims to ensure that foreign contributions and hospitality are used for legitimate purposes and do not compromise the sovereignty and integrity of India.

It provides a legal framework for the regulation and monitoring of such activities to prevent misuse and maintain transparency.

Organizations and individuals receiving foreign contributions in India are advised to familiarize themselves with the FCRA requirements and comply with its provisions.

Foreign Contribution (Regulation) Amendment Act, 2020, made significant changes to the existing FCRA regulations in India.

1. Redefined "Foreign Contribution": The Amendment Act redefined the term "foreign contribution" to include the transfer of any currency, security, or article by any person who is not a citizen of India or not registered in India.

1. Universal Application: The amended law brought all types of organizations, including political parties, within the purview of FCRA. Earlier, certain categories of organizations, including political parties, were exempt from the FCRA.
2. Bank Accounts: The Amendment Act mandated that all FCRA-registered organizations receive foreign contributions only in accounts designated by the banks designated at SBI Delhi Branch, which are linked to the unique registration number obtained under the FCRA.
3. Adjudicating Authority: The Amendment Act introduced the concept of an "adjudicating authority" to hear appeals against orders of cancellation of registration under FCRA.
4. Registration Validity: The Amendment Act extended the validity of FCRA registration from 5 to 10 years.
5. Prohibition on Sub-granting: The Amendment Act introduced a prohibition on the transfer of foreign contributions to other organizations unless the recipient organization also has FCRA registration or prior permission.0nly 20% of the amount shall be spent on administrative activities.
6. Suspension of Registration: The amended law empowered the government to suspend the registration of an organization for up to 180 days if there is a prima facie case of violation.
7. New Reporting Requirements: The Amendment Act introduced new reporting requirements, including the requirement to provide details of the amount of foreign contribution, the manner of its receipt, and the purpose for which it is proposed to be utilized.
8. Transfer of Assets: In case of the cancellation of registration, the Amendment Act empowered the government to utilize the assets of the organization derived from foreign contributions for purposes not inconsistent with the objectives of the Act.

The Foreign Contribution (Regulation) Amendment Act, 2020, brought about several changes to the existing FCRA regulations in India. Like any legal amendment, the FCRA Amendment Act, 2020, has both pros and cons:

Pros:

1. Increased Transparency:
• The amendment aimed to enhance transparency in the receipt and utilization of foreign contributions by tightening reporting requirements for organizations.
2. Strengthening National Security:
• By regulating foreign contributions more rigorously, the amendment aimed to prevent the misuse of funds for activities that might compromise national security or public order.
3. Uniform Application to All Organizations:
• The extension of FCRA regulations to all organizations, including political parties, removed certain exemptions and aimed for a more uniform and comprehensive regulatory framework.
4. Adjudicating Authority:
• The introduction of an adjudicating authority provided a formal mechanism for organizations to appeal decisions related to the cancellation of their FCRA registration, enhancing the due process.
5. Extended Registration Validity:
• The extension of FCRA registration validity from 5 to 10 years reduced the administrative burden on organizations, allowing them to focus more on their activities.
6. Regulation of Sub-granting:
• The prohibition on sub-granting without proper FCRA registration or prior permission was intended to ensure that foreign contributions are channeled through recognized and regulated entities.

Cons:

1. Strain on NGOs and Civil Society:
• Critics argue that the increased regulatory scrutiny and compliance requirements may put an additional burden on NGOs and civil society organizations, potentially affecting their ability to carry out their work effectively.
2. Reduced Flexibility in Fund Utilization:
• The more stringent regulations on the utilization of foreign contributions may limit the flexibility of organizations in responding to emerging needs or crises, as they may need to adhere strictly to predefined purposes.
3. Potential for Arbitrary Suspension:
• The provision allowing the government to suspend the registration of an organization for up to 180 days based on a prima facie case might be seen as a potential tool for arbitrary action, raising concerns about due process and fairness.
4. Challenges for Smaller Organizations:
• Smaller organizations may find it challenging to navigate the complex compliance requirements and reporting obligations, leading to a potential impact on their operations.
5. Controversies Surrounding Political Parties:
• The inclusion of political parties under the FCRA regulations has been a point of controversy, with some expressing concerns about the impact on political activities and funding sources.
6. Possible Chilling Effect on Foreign Funding:
• Critics argue that the increased regulation may create a chilling effect on foreign funding, discouraging legitimate contributions for charitable and developmental purposes.

The Foreign Contribution (Regulation) Amendment Act, 2020, introduced significant changes to the FCRA regulations in India. Moving forward, several considerations and actions can be anticipated:

1. Implementation and Enforcement:
• The government will play a crucial role in implementing and enforcing the amended FCRA provisions. This includes ensuring that organizations comply with the new reporting requirements and adhere to the prescribed procedures.
2. Capacity Building and Awareness:
• NGOs and other organizations covered by FCRA regulations may need to build capacity and awareness to comply with the amended law. This could involve training on reporting, compliance procedures, and legal obligations.
3. Government-Guided Review:
• The government may periodically review the impact and effectiveness of the amended FCRA provisions. This could involve assessing how well the changes align with the intended objectives and making adjustments as necessary.
4. Legal Challenges:
• Legal challenges to the FCRA Amendment Act, 2020, could arise, with organizations or advocacy groups contesting certain provisions. Courts may be involved in interpreting the law and addressing concerns raised by stakeholders.
5. Engagement with Stakeholders:
• The government may engage in dialogue with various stakeholders, including NGOs, civil society organizations, and the international community, to address concerns and gather feedback on the implementation of the amended FCRA.
6. International Relations:
• The amendment could have implications for India's relations with the international community, especially organizations and entities that provide foreign contributions for developmental, humanitarian, or other purposes. Diplomatic engagement and communication may be important to address any concerns.
7. NGO Adaptation and Advocacy:
• NGOs and other organizations covered by FCRA may adapt their strategies and operations to align with the amended provisions. This could involve enhancing transparency in financial operations, adjusting project structures, and engaging in advocacy efforts to shape future regulatory changes.
8. Public Discourse:
• Public discourse on the impact of the FCRA Amendment Act, 2020, is likely to continue. Civil society, academia, and the media may analyze the effects on the work of organizations and discuss the broader implications for democracy, governance, and international relations.
9. Continued Amendments or Revisions:
• Depending on the feedback received and the evolving landscape, there may be further amendments or revisions to the FCRA regulations. This could involve addressing specific challenges faced by organizations or refining aspects of the law.
10. International Best Practices:
• India may continue to assess and align its regulatory framework with international best practices for the regulation of foreign contributions. This could involve learning from the experiences of other countries in balancing transparency, national security considerations, and the facilitation of legitimate contributions.