NGO money inflow under scanner

The fresh law will enable intelligence agencies to look into the activities of the charity organisations, and investigate the background of the NGO’s directors and associates.

Published: 11th November 2012 08:52 AM  |   Last Updated: 11th November 2012 09:51 AM   |  A+A-

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Foreign NGOs have come under the government scanner after ‘suspicious’ money transfers caused alarm bells to ring at the home ministry. The government is likely to seek possible amendments in existing laws to ensure that foreign NGOs do not exercise total control over their Indian affiliates.

A senior home ministry official said that the subsidiary route is the easiest way for foreign NGOs to pump in money, which can be used by foreign intelligence agencies or terrorist organisations. “Foreign intelligence agencies with an agenda against India may use this route by raising two charities—one abroad and a subsidiary in India. To deem such money laundering a criminal act, the Centre will propose that all these cases be covered by the FEMA,” sources said.

The fresh law will enable intelligence agencies to look into the activities of the charity organisations, and investigate the background of the NGO’s directors and associates. “They might be working for a noble cause, but the fact is that foreign intelligence agencies are known to operate under various covers. Since the matter has implications for national security, they will be thoroughly screened,” said the home ministry source. The ministry had earlier stated that while it is not proper to make sweeping generalisations, it is necessary to note that the Indian NGO sector is vulnerable to money laundering and terror financing.

“Therefore, necessary steps for rigorous enforcement as well as coordination with foreign countries will continue,” the source said. The government also wants the ministries of finance and corporate affairs to further examine the proposal. “After getting their views, the proposal will be discussed with the internal and external Intelligence agencies before the ministry gives the nod,” the source said.

The ministry’s monitoring unit is scrutinising the account books of all associations that currently receive foreign funds through FCRA. The scrutiny is being carried out to ensure that the recipient association utilises the funds in accordance with the stated objective and that the money is not diverted to undesirable activities. So far, in 2012, 48 off-site and on-site inspections have been carried out by the monitoring unit after noticing prima facie violation of the provisions of FCRA.

- Sunday Standard

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