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ISLAMABAD, Nov 14: In line with an interim policy aimed at regulating foreign contributions, the government has decided to place all international and local non-governmental organisations getting funds from abroad under scrutiny.

The draft policy for “Regulation of Organisations Receiving Foreign Contributions” was approved by the Economic Coordination Committee (ECC) of the cabinet at its meeting presided over by Finance Minister Ishaq Dar on Wednesday. The policy would be sent to the law ministry for vetting.

The draft policy has been formulated by a committee constituted by the ECC in July this year to review regulatory framework of the NGOs receiving foreign funds. The committee was headed by the minister for science and technology.

There has been considerable debate in the country about the objectives behind contributions made from abroad, with many analysts assailing the activities of some foreign-funded NGOs. In some cases a major portion of the funding is misappropriated by executives and owners of the NGOs.

The policy will remain in place until legislation for a regulatory framework is introduced to improve accounting of foreign funds and enhance effectiveness of aid.

Under the policy, any NGO registered in or outside the country and desirous of utilising foreign economic assistance will need prior registration with the economic affairs division.

Foreign economic assistance will include money, services and goods.

The application for registration will be accompanied by documentary information about the work the NGO wishes to carry out and the area of its operations.

It will be vetted by the interior ministry and the provincial and local governments and processed in four months.

The NGO will sign a memorandum of understanding with the government for a period of five years. It may apply for renewal of registration four months before expiry of the MOU.

Violation of any provision of the MOU will result in cancellation of the registration after a proper hearing. In case of rejection of the application for registration, the NGO may apply for a review within 60 days.

Such requests will be considered by a review committee headed by the secretary of economic affairs division and comprising representatives of the interior and foreign ministries or local governments. Its decision will be final.

The same process will apply in case of rejection of an application for renewal of registration, termination of the MOU or cancellation of registration.

The organisation will declare foreign contributions, the terms and conditions for them and details of bank accounts maintained by it.

The NGO will maintain accounts under internationally recognised accounting standards, get them audited by a firm of registered chartered accountants every year and provide the government with audited annual statements, along with a certificate from the auditors that foreign contributions have been utilised for the objectives specified in the MOU.

The NGO will provide to the federal, provincial and local governments an annual report about its activities and foreign assistance it receives.

The planning and development departments of the provincial governments will review its activities in the context of its development framework and priorities and may convey recommendations to the federal government from time to time.

The organisation will also be bound to provide any information that the government may require from time to time.

The government may verify any information provided by the organisation and give exemption in case of an emergency or disaster.