Foreign Contribution (Regulation) Act,2010

Introduction

The Foreign Contribution (Regulation) Act, 2010 was enacted to regulate the acceptance and utilization of foreign contribution to ensure that the Parliamentary institutions, political associations, academic and other organizations as well as individuals working in important areas. The Foreign Contribution (Regulation) Act, 2010 has come into effect from May 1, 2011.

Prohibition to accept foreign contribution

Section 3 of the Foreign Contribution (Regulation) Act, 2010, imposes a restriction on acceptance of foreign contribution by:

  1. Candidate for election, 
  2. Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper,
  3. Judge,
  4. Government servant or employee of any corporation or any other body controlled or owned by the Government,
  5. Member of any Legislature, political party or office-bearer thereof,
  6. Organization of a political nature specified by the Central Government,
  7. Association or company engaged in the production or broadcast of audio news or audiovisual news or current affairs programs through any electronic mode, or any other electronic form or any other mode of mass communication correspondent or columnist, cartoonist, editor, owner of the association or company.

Section 3 also provides that no person, resident in India, and no citizen of India resident outside India, shall accept any foreign contribution, or acquire or agree to acquire any currency from a foreign source, on behalf of any political party, or any person, prohibited from accepting any foreign contribution.

It mandates that no person, resident in India, shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source to any person if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to any political party or any person, prohibited from accepting any foreign contribution.

It also provides that no citizen of India resident outside India shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source to any political party or any person, or both or any other person, if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to a political party or any person or both.

It also provides that no person receiving any currency, whether Indian or foreign, from a foreign source on behalf of any person or class of persons, shall deliver such currency to any person other than a person for which it was received, or to any other person if he has reasonable cause to believe that such other person intends or to deliver such currency to a person other than the person for which such currency was received.

Person to whom section 3 does not apply

Any person who accepted any foreign contribution:

  1. by way of salary, wages, or other remuneration due to him or to any group of persons working under him, from any foreign source or by way of payment.
  2. by way of payment, in the course of international trade or commerce.
  3. as an agent of a foreign source in relation to any transaction made by such foreign source with the Central Government(CG) or State Government(SG).
  4. by way of a gift or presentation made to him as a member of any Indian delegation subject to rules made by the Central Government(CG).
  5. from his relative.
  6. by way of remittance received, through any official channel, post office, or any authorized person in foreign exchange under the Foreign Exchange Management Act, 1999
  7. by way of any scholarship, stipend, or any payment of like nature.

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