Transparency and regulation of donations to political parties and electoral campaigns from foreign donors
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly
debate on 24 June 2021 (22nd sitting) (see Doc. 15302, report of the Committee on Political Affairs and Democracy,
rapporteur: Mr Konstantin Kuhle). Text
adopted by the Assembly on 24 June 2021 (22nd sitting).See
also Recommendation 2208
(2021).
1. Political parties play a key role
in the democratic systems of Council of Europe member States. They
are essential tools for expressing the political will of citizens
and for organising political debates and campaigns in a democratic
society.
2. Citizens’ confidence in the integrity and independence of
the democratic decision-making process is of crucial importance
in ensuring the acceptance and resilience of democracy. In political
systems based on parties, citizens’ trust in the integrity of political
processes also depends on the internal functioning of a political party,
including its financing and accountability, and the prevention of
corruption.
3. While the systems of political financing and the rules governing
party and campaign funding differ in Council of Europe member States
according to their distinct political, historical, social and cultural characteristics,
the Parliamentary Assembly, referring to its
Recommendation 1516 (2001) “Financing
of political parties”, reaffirms the general principles with respect
to the financing of political parties and electoral campaigns: a
reasonable balance between public and private funding, fair criteria
for the distribution of State contributions to parties, strict rules
concerning private donations, a ceiling on parties’ expenditure
linked to election campaigns, complete transparency of accounts,
the establishment of an independent auditing authority and meaningful
sanctions against those who violate the rules.
4. The Assembly recalls Recommendation Rec(2003)4 of the Committee
of Ministers on common rules against corruption in the funding of
political parties and electoral campaigns. This recommendation,
which builds on Assembly
Recommendation
1516 (2001), provides fundamental principles for political
financing and expenditure as well as provisions on transparency
and supervision in this area. In particular, it provides in its Article
7 that: “States should specifically limit, prohibit or otherwise
regulate donations from foreign donors.”
5. The Assembly takes note that citizens are increasingly concerned
about the integrity of democratic decision making in Council of
Europe member States in the light of recent reports about improper
or illicit interference through financial contributions by foreign
States or State-linked entities to political parties and electoral
campaigns. The Assembly is concerned that the attempts to interfere
in a country’s democratic decision-making process through financial
contributions are increasingly combined with other means of interference
such as disinformation and cyberattacks.
6. The Assembly acknowledges that both migration and the digital
revolution have contributed to an increasing interdependence between
Council of Europe member States, their citizens, democratic decision-making
processes and public spaces. This development poses challenges for
the regulation of financial contributions to political parties and
electoral campaigns from foreign sources and for the enforcement
of such regulations.
7. The Assembly condemns all attempts by Council of Europe member
and non-member States to interfere improperly or illicitly in democratic
decision-making processes in other States through financial contributions
to political parties and electoral campaigns.
8. In particular, the Assembly:
8.1 outlines that co-operation between citizens and political
organisations in different Council of Europe member States helps
to increase mutual understanding and serves to maintain a constant dialogue.
Regulating financial contributions to political parties and electoral
campaigns from foreign sources should not discourage such co-operation;
8.2 stresses that regulations governing the funding of political
parties and electoral campaigns should not impede the work of non-governmental
organisations (NGOs) and political foundations, as these organisations
are important actors in civil society. The important role of foreign
organisations in contributing to democracy-building should be recognised.
The Assembly refers to
Resolution
2362 (2021) “Restrictions on NGO activities in Council
of Europe member States”, in which member States are urged to “ensure
that NGOs can seek, secure and use financial and material resources
of both domestic and foreign origin, without suffering discrimination
or encountering unjustified obstacles”, in line with the recommendations
included in the report on the funding of associations of the European Commission
for Democracy through Law (Venice Commission) (paragraph 10.7);
8.3 acknowledges that different legal regimes exist in member
States which allow (or prohibit) financial co-operation between
political parties representing national minorities and the States
in which members of the respective group reside, including as part
of electoral campaigns;
8.4 acknowledges that different legal regimes exist in member
States which allow (or prohibit) financial contributions by their
citizens residing abroad and by foreign citizens permanently residing
in the respective member State to their national political parties;
8.5 stresses that regulations governing financial contributions
to political parties and electoral campaigns from foreign sources
must comply with the European Convention on Human Rights (ETS No. 5),
particularly with Articles 10 (freedom of expression) and 11 (freedom
of assembly and association).
9. The Assembly expresses serious concern that legal loopholes
in the existing regulations governing financial contributions to
political parties and electoral campaigns from foreign sources are
being or could be exploited, and that regulations could be deliberately
circumvented,
inter alia:
9.1 by contributing in-kind instead
of in cash;
9.2 by providing loans;
9.3 by making contributions in-kind or in cash to politicians
and political candidates instead of political parties and electoral
campaigns;
9.4 via intermediary individuals or companies;
9.5 via shell companies deliberately created to establish
a legal presence in the target country;
9.6 by contributing to foundations, associations, charities,
religious organisations and other non-profit organisations or NGOs
with the aim of covertly benefitting a political party or an electoral
campaign, thus diverting the funding from its original purpose,
namely the financing of a non-profit organisation or NGO;
9.7 by using cryptocurrencies;
9.8 by contributing anonymously or by exploiting de minimis rules or rules regarding
cash contributions;
9.9 by concealing a foreign financial contribution in a business
operation, particularly in the energy or natural resources sector.
10. The Assembly expresses serious concern that the exploitation
of legal loopholes and the deliberate circumvention of existing
regulations governing financial contributions to political parties
and electoral campaigns from foreign sources may be undertaken in
order to:
10.1 allow political campaigning
by third parties, which are subject to less-strict transparency requirements
than political parties participating in electoral campaigns;
10.2 combine financial interference in a country’s democratic
decision-making process with other tools of interference, such as
disinformation and cyberattacks;
10.3 combine financial interference in a country’s democratic
decision-making process with money laundering and other criminal
activities.
11. The Assembly believes that member States should seriously
consider the risk posed by inappropriate or illicit foreign financial
interference and recognise the potential interconnection with disinformation
and cyberattacks. Consequently, it calls on member States to review
their regulations governing financial contributions to political
parties and electoral campaigns from foreign sources, including
the enforcement of such regulations by, in particular:
11.1 specifically limiting, prohibiting
or otherwise regulating financial contributions to political parties and
electoral campaigns from foreign sources in line with Article 7
of Recommendation Rec(2003)4, where such regulations do not already
exist;
11.2 broadening the definition of financial contributions in
order to include in-kind contributions and loans;
11.3 including financial contributions (both in-kind or in
cash) to politicians and political candidates in the regulatory
framework governing financial contributions to political parties
and electoral campaigns;
11.4 including financial contributions to foundations, associations,
charities, religious organisations and other non-profit organisations
or NGOs in the regulatory framework governing financial contributions to
political parties and electoral campaigns, whenever these organisations
take part in electoral campaigns or finance political parties. These
measures should not, however, be misused to impede the work of NGOs;
11.5 limiting, prohibiting or otherwise regulating financial
contributions in the form of cryptocurrencies and anonymous financial
contributions;
11.6 assessing and, if need be, tightening regulations regarding de minimis and cash contributions;
11.7 reviewing regulations and enforcement practices with regard
to financial contributions via intermediary individuals or companies,
or shell companies;
11.8 reviewing regulations and practices for their enforcement
with regard to political campaigning by third parties;
11.9 stepping up activities to combat money laundering and
acknowledging its potential interconnection with inappropriate or
illicit foreign financial interference;
11.10 strengthening the independence of authorities responsible
for auditing political parties and electoral campaigns, as well
as improving their facilities;
11.11 assessing and, if need be, strengthening the sanctions
imposed for violating rules on the financing of political parties
and electoral campaigns;
11.12 investigating cases of alleged inappropriate or illicit
foreign financial interference;
11.13 increasing efforts to gather scientific and technical
knowledge about inappropriate or illicit foreign financial interference;
11.14 developing a common international strategy against inappropriate
or illicit foreign financial interference;
11.15 fully implementing the recommendations of the Group of
States against Corruption (GRECO) on transparency of political party
and election campaign financing, so as to increase the transparency
of foreign donations, limit possibilities for circumvention of the
rules and strengthen oversight and enforcement of regulations.
12. The Assembly stresses that the growing interdependence between
European States in political, social, cultural and media matters
makes it more difficult for member States’ governments and parliaments
to oppose harmonisation of the principles governing financial contributions
to political parties and electoral campaigns from foreign sources
by invoking the unique historical, cultural, social or political
characteristics of their respective countries.
13. The Assembly encourages the parliaments of Council of Europe
member States to organise hearings on the issue of financial contributions
to political parties and electoral campaigns from foreign sources
and on their potential to influence democratic decision-making processes
in their respective political systems, including regarding the correlation
with other forms of interference such as disinformation and cyberattacks.
14. The Assembly welcomes the monitoring by GRECO of the implementation
of Recommendation Rec(2003)4 and expresses its appreciation for
GRECO’s evaluation and compliance procedures, which ultimately aim
at preventing corruption in relation to party and electoral campaign
funding. It encourages GRECO to include the implementation of Article 7
of the said recommendation in the scope of its future evaluations.
15. The Assembly also welcomes the work of the Venice Commission
on political parties, in particular the “Guidelines on Political
Party Regulation – 2nd edition”, issued jointly in 2020 with the
Office for Democratic Institutions and Human Rights of the Organization
for Security and Co-operation in Europe (OSCE/ODIHR). The Assembly
encourages the Venice Commission to initiate a new study to update
its Opinion No. 366/2006 “The Prohibition of Financial Contributions
to Political Parties from Foreign Sources”, as well as to consider whether
it is appropriate to update its “Guidelines on the Financing of
Political Parties” (2001) in the light of recent events, legal developments
and the findings of this Resolution.
