REGULATION OF FOREIGN CONTRIBUTION AND FOREIGN HOSPITALITYCentral

Section 10 of The Foreign Contribution (Regulation) Act, 2010

Where the Central Government is satisfied, after making such inquiry as it may deem fit, that any person has in his custody or control any article or currency or security, whether Indian or foreign, which has been accepted by such person in contravention of any of the provisions of this Act, it may, by order in writing, prohibit such person from paying, delivering, transferring or otherwise dealing with, in any manner whatsoever, such article or currency or security save in accordance with the written orders of the Central Government and a copy of such order shall be served upon the person so prohibited in the prescribed manner, and thereupon the provisions of sub-sections (2), (3), (4) and (5) of section 7 of the Unlawful Activities (Prevention) Act, 1967 (37 of 1967) shall, so far as may be, apply to, or in relation to, such article or currency or security and references in the said sub-sections to moneys, securities or credits shall be construed as references to such article or currency or security.

Summary

This section allows the government to freeze illegal foreign money, physical items, or securities.
The Central Government must first make an inquiry and be satisfied that the person received the items in violation of the law.
The government issues a written order prohibiting the person from paying, transferring, or dealing with the illegal items in any way.
Once this written order is served, specific rules from the Unlawful Activities (Prevention) Act, 1967 apply to manage the frozen assets.

Practical examples

1After an inquiry in 2026, the government finds a local businessman accepted a bundle of foreign currency notes illegally. The government serves him a written order freezing the cash, meaning he cannot deposit it, spend it, or hand it to anyone else.

2A person smuggles in expensive electronics gifted by a foreign political group in violation of the rules. The government issues an order under this section prohibiting the person from selling or giving away the electronics, applying rules from the Unlawful Activities (Prevention) Act to secure the items.

FAQ

1. What can the government do with illegally received foreign cash under Section 10 of the FCRA 2010?

Under Section 10 of The Foreign Contribution (Regulation) Act, 2010, the government can issue a written order prohibiting the person from paying, delivering, transferring, or dealing with that currency in any manner.

2. Does Section 10 of the foreign contribution rules apply only to cash?

No, Section 10 of the FCRA 2010 applies to any article, currency, or security, whether Indian or foreign, that has been accepted in contravention of the Act.

3. Which other law is used to handle the frozen assets under Section 10 of The Foreign Contribution (Regulation) Act, 2010?

According to Section 10 of the Act, once the prohibitory order is served, specific sub-sections of Section 7 of the Unlawful Activities (Prevention) Act, 1967 are applied to the frozen article, currency, or security.

Test yourself

Q1.Before issuing a prohibitory order under Section 10 of The Foreign Contribution (Regulation) Act, 2010, what must the Central Government do?

Q2.Under Section 10 of the FCRA 2010, how must the government communicate the prohibition to the person?

Q3.Which Act's provisions are explicitly applied to the frozen articles under Section 10 of The Foreign Contribution (Regulation) Act, 2010?

Q4.What types of assets are covered by a prohibition order under Section 10 of the foreign contribution law?

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