International Non Profit Organizations, specially those well meaning ones from India are facing troubles because Indian government is restricting carrying of materials or money to India for relief and rehabilitation purposes. Technically taking money or materials to another country are supposed to pay customs duty to the government. Considering that the operations in Nepal need high amount of money, taking hard cash, which in any case is restricted, is a bad way to follow. Further it can call for legal action. Transferring money to an account in Nepal without the permission of Reserve Bank of India can be construed as money laundering! As the initial special permissions for taking more cash and materials with easy permissions without paying Customs Duty is coming to a close, NGOs are beginning to feel the pinch.
As for Nepal, all NGOs from India or any other country, shall be treated as International NGOs. The International NGOs are required to be registered with the Social Welfare Council. Read Rules here. Section 20 under the rules are very important for INGOs.
There are four important steps:
a) Register with the Social Welfare Council (SWC) which is under the Ministry of Women, Children and Social Welfare. (There is a need to coordinate with this Council on the part of INGOs, and support them where necessary so that all INGOs are registered properly.)
b) INGOs must open an account at any authorized Commercial Bank one single central account into which it can receive all its foreign funds, and it can open sub-accounts to use the money if required. Once in every four months, the INGO must submit a report of receipts to the SWC.
c) If an INGO is supporting an NGO, such NGO also must be registered with the SWC. That NGO must have different accounts for different projects. The selected NGO is preferred to be a Nepali NGO.
d) Every year, at the end of financial year, the agency must inform the Auditor General in approved format of the closing of accounts, and the Auditor General shall appoint auditors to audit the accounts.
At this moment, the most important thing is for INGOs to register with the SWC, start a central bank account, and if needed sub-accounts linked to the central bank account for spending purposes. Donor money from any country should be directly sent to the account in Nepal. Do not route the money through India, as the money is not meant to be used in India. Any money sent from India needs the approval of the Government of India. (Latest heard is that Indian Government is asking NGOs to put the money in the Prime Minister's Relief Fund to showcase works in Nepal as activities of the Indian Government, and contribution of the people of India.)
