E. Rules on the financing of political parties

1. Donations

There are a number of ways in which rules on donations may be circumvented, which the draft Act has attempted to deal with. One way of circumventing bans on donations is to portray them as ‘loans’. In this context, it is welcome that Article 2 (d) treats loans as donations if they are made on conditions more favorable than the commercial rate. However, loans may also be forgiven at a later date, in which case they should be considered as an in-kind contribution, subject to the limitations that apply to contributions and expenditure limits. It is recommended to clarify this in the draft Act.