Taking forward its strategy of cracking down on NGOs receiving foreign funds and suspected to be involved in unscrupulous activities, the Centre has blacklisted dubious donors based abroad, putting them on money laundering watch.
Intelligence agencies have put together a list of 188 foreign donors who have a suspected track record. Sources said these donors are under scrutiny and if any wrongdoing is exposed, the NGOs will be stopped from receiving funds from them.
NGOs receiving funds from smaller countries have been under scrutiny of intelligence agencies for routing black money in India. “The money is being laundered to tax havens and then reaching the same source by showing it as funds to NGOs for obscure purposes,” said an official explaining the modus operandi.
While several dubious NGOs have been under the lens of intelligence agencies, the focus now is to crack down on the donors who are using these organisations for money laundering. There is also a suspicion that some of these donors are funding these organisations to push their agenda and derail India’s economic growth.
The list of donors has been shared with the Union home and finance ministries. The Enforcement Directorate (ED) and the Central Board of Direct Taxes (CBDT) are also probing the matter. While traditional tax havens like Switzerland, Mauritius and UAE and Thailand are among the top donor countries, frequent donations from smaller countries such as North Korea, Syria, Cuba, Tonga, Kyrgyzstan, Burkino Faso, Swaziland, Luxembourg and Malta have raised suspicions of large scale money laundering.
It’s not just money laundering, but the home ministry in its report on Foreign Contribution Regulation Act (FCRA) also red-flagged the issue of terror funding through these dubious foreign donors.
Home ministry data reveals that over 20 per cent of the foreign contribution is being made for doubtful purposes. These are activities other than the most common causes listed by the home ministry for foreign contribution like rural development, welfare of children, health, research, construction and maintenance of schools or colleges, awareness camps and religious purposes. “We need to know where this money is being used and need to coordinate with authorities of these countries and crackdown on some of these NGOs,” a home ministry official said.
Notices issued The Narendra Modi government has been coming down hard on NGOs allegedly involved in stalling power and nuclear projects. Such NGOs have been issued notices to submit their returns of funding received from abroad. This has led to a faceoff between the government and activists who have made a counter-allegation that government actions against NGOs is to muzzle a voice of dissent that is exposing exploitation of tribal population due to these projects.
MHA cancelled licenses of 1142 NGOs getting foreign funds mostly belonging to Andhra Pradesh, earlier this year for flouting norms. Sources said the Home Ministry has issued notices to more than 31,000 NGOs for not filing mandatory annual returns on their foreign contribution under Foreign Contribution Regulation Act (FCRA).