Rules for Campaign Financing in the new Draft Law on Financing of Political Activities is only a formal compliance with ODIHR Recommendations, while numerous problems remain unresolved. Experts from prEUgovor member Transparency Serbia have proposed how to improve this regulation before the coming general elections.
Draft of the new Law on Financing of Political Activities which was published on November 25, 2021, is, in fact, the existing Law on which interventions were carried out in a more significant number of articles, which is why it is formally marked as new. Some of the changes made now come from an earlier draft of this Law (from 2016), which was then being worked on by the Ministry of Finance and the Anti-Corruption Agency, and which is no longer available online.
The Working Group of the Government of Serbia for Cooperation with the OSCE / ODIHR made a significant number of changes, hidden from the public eye. As it is publicly known, the Working Group sent the draft amendments to the LFPA to the ODIHR in June 2021 but did not publish it or submit it to interested civil society organizations, from which it had previously (in February 2021) requested an opinion on how the ODIHR recommendations should be implemented. As a result, precious half a year was lost, during which the public was able to discuss these proposals.
Some of the changes are a consequence of recent agreements from inter-party dialogues, which we commented on in the last prEUgovor Alarm report. Finally, some changes are related to parts of the Action Plan for Chapter 23, which existed in almost the same form in the Action Plan for the implementation of the National Anti-Corruption Strategy from 2013 but have not been implemented in the past eight years.
This draft law has not been prepared in accordance with the standards for public consultation in policymaking. Not only was the public not consulted, but there are no indications that all relevant state bodies participated in its preparation, not even the political parties themselves. The composition of the working group that drafted the text was also not announced.
Since this Law relates to an area with constant changes and improvements in standards that are comparatively happening as a response to new challenges in party financing and protecting the democratic decision-making process from undue influence, it would be more than justified to consider relevant experiences from other countries before amending the Law. In this regard, it was essential to consider possible ways to regulate the financing of election campaigns by third parties and the financing of political activities through promotion through social networks.
Transparency Serbia, on behalf of the prEUgovor coalition, has prepared several proposals to improve this draft law. We reacted similarly when the same Law was changed after the previous inter-party dialogue. We have proposed legal solutions to several significant problems, including the following:
- loans should not be treated as a “source of income”, and it should be ensured that the sources of financing the repayment of loans taken for the campaign are visible in the financial statements;
- the value of contributions provided by interrelated legal entities should be limited to prevent circumvention of the permitted maximum;
- a provision should be returned to the Law prohibiting the funds that parties receive from the budget to finance regular work (that is, anything other than the election campaign) to be used for the election campaign;
- in order to increase the equality of participants in the elections, 50% of the money from the budget should be divided into equal parts (and not 30% as proposed);
- advertising material should contain a clear indication of the political entity and the election campaign to which it refers;
- we have proposed, in line with the practice of most European democracies, to limit the total cost of the campaign, with limits similar to those in Bulgaria, Croatia, Hungary, the Czech Republic, and Slovakia (300 million dinars for parliamentary and 200 million for presidential elections);
- we have proposed measures that would provide significantly greater publicity of campaign finance data while it lasts;
- when it comes to the control of financial reports performed by the Agency for the Prevention of Corruption, we have proposed criteria for determining the plan and content of the Agency's Report, which should guarantee that all critical issues are subject to control;
- as for punishing irregularities, we have proposed a much clearer and more thorough regulation of criminal responsibility, both for illegal financing of parties and campaigns and in terms of pressure and retaliation that someone would exert on party donors and companies that provide services.
The prEUgovor coalition has submitted this publication to the relevant ministry as a contribution to the public discussion on the Draft Law on Financing of Political Activities, which ended on 14 December 2021.
The production of this publication was made possible by the Balkan Fund for Democracy, the program of the German Marshall Fund of the USA and the Embassy of the Kingdom of Norway in Belgrade within the project "PrEUgovor for the Rule of Law and EU Integration".