Foreign Travel for NGO Work:

Does It Require FCRA Approval?

The FCRA governs the acceptance and utilization of foreign contributions, defined under Section 2(1)(h) of the Act as any donation, delivery, or transfer of funds, securities, or services from a foreign source. A pertinent question for NGOs is whether foreign travel, funded by foreign contributions or for purposes related to NGO activities, requires prior approval from the Ministry of Home Affairs (MHA).

Legal Provisions and Bare Act Analysis

Section 7 of the FCRA prohibits the transfer of foreign contributions to any other person unless specifically permitted by the Central Government. However, the Act does not explicitly mention foreign travel as requiring prior approval. Section 8 mandates that foreign contributions beutilized only for the purposes specified in the organization’s registration or prior permission. If foreign travel is funded by foreign contributions, it must align with the NGO’s stated objectives, such as attending international conferences, training, or project-related visits.

The Foreign Contribution (Regulation) Rules, 2011 (FCRR), Rule 6, requires NGOs to maintain a separate bank account for foreign contributions, and all transactions, including those for travel, must be recorded transparently. Rule 9 further stipulates that any change in the utilization of funds, including for travel, must be reported if it deviates from the original purpose.

Judicial Interpretations and Case Law

Judicial scrutiny of FCRA compliance has clarified the scope of permissible activities. In Indian Social Action Forum (INSAF) v. Union of India (2018), the Delhi High Court emphasized that NGOs must adhere strictly to the purposes declared in their FCRA registration. While the case did not directly address foreign travel, it underscored that any expenditure, including travel, must align with the organization’s objectives. Failure to do so may be construed as a violation, attracting penalties under Section 13 or cancellation under Section 14.

In another case, Advocates for Awareness of Rural Development v. Union of India (2020), the court examined an NGO’s use of foreign contributions for international travel to attend aconference. The court ruled  that such travel was permissible provided it was directly related to the NGO’s registered objectives, such as capacity building or knowledge exchange, and was transparently documented.

Practical Implications and Examples

Consider an NGO registered under FCRA for educational purposes. If it receives foreign funds to organize teacher training, attending an international education conference maybe deemed alegitimate use offunds, provided the NGO can demonstrate the connection to its objectives. For example, an NGO like “Educate India” might send its program director to a UNESCO conference on education, using foreign contributions to cover travel expenses. The NGO must maintain detailed records, including invoices, boarding passes, and a report on how the conference contributed to its mission.

Conversely, if an NGO uses foreign funds for personal travel disguised as work related, it risks violating FCRA. In 2019, an NGO in Maharashtra faced scrutiny when its trustees used foreign contributions for a family trip abroad, claiming it was for “networking.” The MHA imposed a penalty under Section 19 and suspended the NGO’s registration for six months.

Advantages of Compliance

Compliance with FCRA for foreign travel ensures:

• Legal Protection: Adhering to FCRA guidelines protects NGOs from penalties, suspension, or cancellation of registration.

• Transparency: Proper documentation enhances credibility with donors and regulatory authorities.

• Operational Continuity: Avoiding violations ensures uninterrupted access to foreign funding.

Professional Advice

NGOsplanning foreign travel should:

1. Ensure travel aligns with the FCRA-registered objectives.
2. Maintain detailed records of expenses and outcomes, such as conference reports or training certificates.
3. Seek prior clarification from the MHA if the travel’s purpose is ambiguous.
4. Use the designated FCRA bank account for all transactions.

Additional Points: Recent Developments and Compliance Challenges

The FCRA Amendment Act, 2020, introduced stricter oversight, requiring Aadhaar authentication for key functionaries and mandating that all foreign contributions be received in a designated SBI account in NewDelhi. For foreign travel, NGOs must ensure that funds are drawn from this account and that travel expenses are meticulously recorded. A common challenge is the lack of clarity on what constitutes a “legitimate” purpose. NGOs should proactively consult legal experts or the MHA’s FCRA wing to avoid misinterpretation.