(Arms of the Norwegian State)

THE MINISTRY OF GOVERNMENT ADMINISTRATION AND REFORM

Proposition to the Odelsting No. 84 (2004-2005) ______

On the Act relating to certain circumstances concerning political parties (Party Act)

Separate enclosure: Norwegian Official Report 2004:25 Money counts, but votes decide Contents

1 The main contents of the Proposition….5 8 Models for administration related to the financing of political parties and 2 Background for the Bill………………..6 democratic groups and publication 2.1 Parliamentary requests Nos. 178 and 179 of accounts…………………………...60 dated 13.12.2002………………………6 8.1 Present arrangements – Committee for 2.2 Alternative solutions…………………..6 distribution of state subsidies to the 2.3 Appointment and composition of the political parties……………………….60 Democracy Financing Committee…….7 8.2 Proposal by the Democracy Financing Committee………………...61 3 About the consultations round…… ..11 8.3 View of the consultative bodies……...62 8.4 Evaluations of the Ministry………… .63 4 Registration of political parties 12 4.1 Definitions…………………………….12 9 Prevailing law in other countries – 4.2 Current law……………………………12 international comparisons…………..66 4.3 Proposal by the Democracy 9.1 State party subsidies – international Financing Committee…………………12 comparisons…………………………..66 4.4 View of the consultative bodies……....13 9.2 Private contributions – international 4.5 Evaluations by the Ministry.…….……13 comparisons………………………….69 9.3 Publication of the accounts of political 5 Public financing of political parties’ parties in other countries…………….69 organisations and of democratic 9.4 Administrative and control bodies in groups………………………………...14 other countries………………………..70 5.1 Present subsidy system………..……...14 9.5 About Sweden in particular…………..71 5.2 The European Human Rights 9.6 About circumstances in Denmark in Convention (EHRC)…………………..16 particular……………………………..73 5.3 Evaluations and proposals by the 9.7 About circumstances in Finland in Democracy Financing Committee……16 particular……………………………..75 5.4 View of the consultative bodies………20 5.5 Evaluations by the Ministry…………..22 10 Financial and administrative consequences………………………...77 6 Access by others to finance political 10.1 State subsidies system……………....77 parties and democratic groups……...28 10.2 Transparency and inspection of the 6.1 Current law…………………………...28 parties’ income situation…….………77 6.2 Proposal by the Democracy Financing Committee…………… ..…29 11 Remarks to the individual provisions 6.3 The view of the consultative bodies….32 in the Bill……………………………78 6.4 Evaluations by the Ministry……….....37 Proposal for the Act relating to certain 7 Publication of the accounts of conditions concerning political parties political parties……………………....41 (the Party Act) 7.1 Current law……………………………41 7.2 Recommendation by the European Council………………………………..41 7.3 Proposal by the Committee (Request No. 178 dated 13.12.2002)……………41 7.4 Proposal by the Democratic Financing Committee…………………41 7.5 The view of the consultative bodies…. 48 7.6 Evaluations by the Ministry…………..52

(Arms of the Norwegian State)

THE MINISTRY OF GOVERNMENT ADMINISTRATION AND REFORM

Proposition to the Odelsting No. 84 (2004-2005) ______

On the Act relating to certain circumstances concerning political parties (the Party Act)

Recommendation by the Ministry of Government Administration and Reform dated 29 April 2005, Granted Royal Assent by the King in Council on the same date. (2nd Bondevik Government)

I Contents of the Bill

In this Bill, the Ministry of Government - access by private bodies/persons to support Administration and Reform presents a proposal political parties for a new Act relating to certain circumstances - right of inspection by public authorities of concerning political parties. According to the the financing of political parties, both proposal, the new Act will supersede current concerning income for local organisations, law on publication of political parties’ income county organisations, county youth (Act of 22 May 1998 No. 30). The Bill organisations, and the central organisations proposes: of the parties, including central youth - moving of current statutory provisions on organisations registration of political parties in the - establishment of a new, independent Board Election Act to the new Party Act that shall inter alia allocate state subsidies, - regulation of the state subsidy system consider complaints according to the new for political parties by law Act, and submit an annual report to the Ministry regarding its activities.

2 Reason for the Bill

2.1 Requests by the Norwegian Parliament c) define donors as private persons or Nos. 178 and 179 dated 13.12.2002___ legal entities d) set requirements that contributions from The Bill is based on Recommendation to the donors who are, or who are Odelsting No. 28 (2002-2003 dated 26.11.2002 organisationally connected to, one of by the Committee for family, cultural and the main industrial organisations, shall be administrative affairs. In the recommendation accounted for and accounts presented the Committee discussed a private proposal for collectively, as one donation from one amendments to the Act of 22 May 1998 No. 30 donor to one party. regarding publication of the income of political e) lay down requirements that a declaration is parties forwarded by members of Parliament presented together with the party’s Jens Stoltenberg and Hill-Marta Solberg, cf. accounts, that there are no oral or written Doc. No. 8:10 (2002-2003). It was pointed out contracts between the donor and that the Act on publication of political parties’ political parties or their elected income at present requires political parties or representatives at any level, and that there other organisations that are registered is no agreement that can be interpreted as according to Section 5-1 of the Election Act reciprocity or expectation of reciprocity.” and that have presented a list at the last preceding general election, to submit annual The Committee also proposed that: accounts of the main organisation’s income. The accounts shall be submitted to Parliament. The proposers were of the opinion that the Act “III should be extended to also include Parliament requests the Government to appoint contributions to municipal and county parties. a broadly composed committee which will The reason was that there should be the same discuss on a broad basis the financing of rules for all three levels. democracy, including the political parties and The Committee concluded that a revision elected groups’ activities and present a of the Act requires a more extensive proposal for possible amendments to the Act of amendment proposal than the Doc. 8 proposal, 22 May 1998 No. 30 on publication of political and therefore proposed that it be rejected, cf. parties’ income and any other Acts, Roman numeral I in the recommendation. The Regulations and rules.” following proposal was adopted (cf. Roman numeral II in the recommendation): On 3.12.2002 Odelstinget passed a resolution in accordance with the Committee’s “II recommendation. Roman numerals II and III in Parliament requests the Government to present the recommendation were forwarded to a proposition with amendments to the Act of Parliament in accordance with Section 30, 22 May 1998 No. 30 relating to publication of subsection four, of Parliament’s Order of the political parties’ income. The amendment Business. Parliament passed a resolution in should entail that the Act shall: accordance with the Committee’s a) include all organisational levels of recommendation, cf. request nos. 178 and 179 political parties, of 13.12.2002. b) include requirements that reports shall be made of all forms of contributions with a value of over NOK 20 000, whether it 2.2 Alternative solutions concerns cash or other forms of non- financial contributions, including work The Ministry’s assessment is that the request efforts and other efforts which can be by Parliament can in practice be followed up in calculated at a value of NOK 20 000 or over one or two separate legislative amendment.

processes. Roman numeral II contains specific proposals for amendments to the Act relevant expertise environments, including which will be able to be followed up relatively political parties, groups and academic quickly with a Proposition to the Odelsting. professional environments. All the seven Any proposals for amendments in the wake of largest parties were therefore invited to follow-up of Roman numeral III, however, will participate. An equivalent invitation was only be able to be presented after the planned extended to Rød Valgallianse (RV ) (Red Committee had given its recommendation. Election Alliance) – as the largest of the small Equitable considerations indicate that an parties measured according to election Act should not be amended too often. Norway attendance at the last municipal council and has given its approval to the European county council elections. Since RV refused the Council’s “Recommendation of the Committee invitation, the Kystpartiet (the Coastal Party) – of Ministers to member states on common as the next largest of the small parties, was rules against corruption in the funding of asked to join the committee. political parties and electoral campaigns” Hamar City and Rural Lists was asked to (2003/4) in which it is recommended that the represent the local groups or lists. Further, States introduce relatively strict requirements professional personnel with political science, regarding transparency surrounding financing legal, accounting and media backgrounds were of political parties and restrictions on who can invited to participate. Rune Sørensen, support the parties. A complete professor in Organisation and Management at implementation of the recommendation would, BI Norwegian School of Management, was in the opinion of the Ministry, require more requested to be Chairman of the Committee. stringent provisions in the Act beyond those The Ministry points out that the state party proposed by the Committee in Roman numeral subsidy system since its introduction at the II – and possibly also new legislation. beginning of the 1970s1, has had considerable It does not appear from the Committee’s appropriation-related growth and in addition recommendation to what extent the grown in extent in that several parts of the Government should choose one or more party organisation over time have become amendment processes. On the above- eligible for subsidies2. In the formulation of the mentioned background the Ministry decided to mandate, therefore, the Ministry has worked on follow up the requests by Parliament in one the assumption as otherwise in this matter – Bill. that there shall continue to be state subsidies to Roman numeral III entails more extensive the political parties. In the mandate, the identification and analysis work. The mandate Ministry has furthered Parliament’s wish for a is broad in that the Committee shall “discuss greater degree of transparency about and on a broad basis the financing of democracy, inspection of the income of political parties. including the political parties and democratic The Ministry has given high priority to the groups’ activities”, etc. The Ministry has matter from the start. The drawing up of the concluded that it would be appropriate to mandate, in which all relevant themes for such define the mandate so that the focus is first and reporting work were to be included, and foremost directed towards organisations that appointment of the committee with the participate in elections of democratic bodies, composition in question and the different i.e. political parties registered in accordance considerations used as a basis has, however, with Chapter 5 of the Election Act or groups taken time. that participate through list proposals in After its appointment on 17.10.2003, the accordance with Chapter 6 of the Act. Democracy Financing Committee has, in Industrial organisations and other organisations accordance with an additional mandate, been with political goals will first and foremost be instructed to report on the problems in of interest for the discussion in the capacity of connection with the lifting of the prohibition in being financial contributors to political parties Section 3-1, subsection three, of the and groups. Broadcasting Act, concerning political The Ministry has worked on the assumption that a committee to follow up the 1 Cf. Proposition to the Storting No. 108 (1969-70) from the then Ministry of Wages and Prices requests by Parliament will probably be 2 broadly composed of representatives from Cf. Proposition to the Storting No. 146 (1974-75) from the then Ministry of Consumer and Administrative Affairs

advertising. This part of the Committee’s 13. Pensioner Dag Omholt, Oslo report has not been discussed or considered in 14. Professional associate Gunnar Bodahl- this Proposition, but will be followed up by the Johansen, Institute of Journalism, Ministry of Cultural and Church Affairs. Fredrikstad Reference is also made to the discussion of the 15. Managing Director Sandra Henriette Riise, matter below. the Norwegian Association of Authorised The Democracy Financing Committee’s Accountants (NAAA), Oslo report, Norwegian Official Report 2004:25 16. Postdoc. Caroline Taube, University of “Money counts, but votes decide” (hereinafter Oslo, Oslo, (appointed 24th November referred to as “the recommendation”) is an 2003) Appendix to this Proposition. A summary of the Committee’s reviews and proposals are In 2004 Jennie Johnsen was replaced by the presented under the individual chapters below General Secretary of Left, Terje Breivik, with reference to the paragraphs in the Ulvik. recommendation from which the text is The Committee’s secretariate has consisted obtained. of Associate Professor Leif Helland (Head of the Secretariate), Senior Advisor Helga Hjorth 2.3 Appointment and composition of and Senior Executive Officer Beate Nygård. the Democracy Financing Committee The Committee was originally given a ______deadline of one year – to 17.10.2004. As stated in Report to the Storting No. 26 (2003- The Government appointed the Democracy 2004) On amendment of Section 100 of the Financing Committee by Royal Resolution Constitution, the Democracy Financing dated 17.10.2003. The Committee was Committee after appointment was assigned composed of the following: reporting tasks in connection with the lifting of 1. Professor Rune Sørensen, BI Norwegian the prohibition of political advertising in School of Management, Chairman, Bærum Section 3-1, subsection three of the 2. Party Secretary of Arbeiderpartiet (the Broadcasting Act. For this reason the deadline Labour Party), Martin Kolberg, Lier for submission of the Committee’s report was 3. General Secretary of Høyre (the moved to 29.11.2004. As a result of Conservatives), Trond R. Hole, Oslo reorganisation of the Ministry’s structure in 4. General Secretary of Fremskrittspartiet June 2004, the Committee’s Recommendation (Progress Party), Geir Mo, Oslo in Official Norwegian Report 2004:25 “Money 5. Special Advisor in the Trade Union counts, but votes decide” was submitted to the Gunhild Johansen, representative for Minister of Government Administration and Sosialistisk Venstreparti (Socialist Left Reform. Party), Tromsø 6. General Secretary of Kristelig Folkeparti The Committee’s mandate and additional (Christian Democratic Party), Inger Helene mandate Venås, Oslo Upon appointment the Committee was given 7. Head of Health and Welfare, deputy the following mandate: representative to Parliament for the Centre Party, Mali Grete Aksnes, Nordheimsund “In a decision of 13.12.2002, Parliament 8. Vice Chairman of Venstre (Left), Jennie requested the Government to appoint “a Johnsen, Oslo broadly composed Committee to discuss 9. Administrative head of department for on a broad basis the financing of the Coastal Party’s Parliamentary Group, democracy, including the political parties Dag Hagen Berg, Hadsel i Nordland and democratic groups’ activities and present 10. Special Advisor Christel Grönqvist Meyer, a recommendation for possible amendments representative for Hamar Town and Rural to the Act of 22 May 1998 No,. 30 Lst, Hamar regarding publication of the income of 11. Professor Hanne Marthe Narud, University political parties and any other Acts, of Oslo, Oslo Regulations and rules” (cf. Parliament’s 12. Professor Kaare Strøm, University of request No. 179). California, San Diego, USA

The work carried out by the political parties organisations in society, for example, is a necessary assumption for our democratic industrial organisations or other interest system of government to function. It must organisations, and have clarified to what extent therefore be an important public task to the parties have assets or another form of contribute to the parties having financial ownership (in whole or in part) in commercial framework conditions to finance their activity business management. The Committee’s work can be summarised The Committee shall to begin with undertake in the following points: a review of all levels of a party organisation, - identify and describe the present financing both centrally, at county level and locally. The of political parties Committee shall evaluate whether it will also - evaluate necessary and acceptable examine the political parties’ youth financing systems in the future organisations. - evaluate the desirable degree of The Committee should also clarify the transparency/ inspection of the parties’ international law ramifications for national law financing and how this can be protected regarding financing of democracy which - comment on the request presented by derive from the The European Convention on Parliament (Request No. 178 of Human Rights (ECHR), particularly Article 10 13.12.2002 ) and any amendment regarding freedom of speech and Article 11 on recommendations in relation to it freedom of assembly and association, and case - describe the international law ramifications law from the European Court of Human for national legislation, cf. The European Rights. In that context the Committee should Convention on Human Rights (ECHR), also obtain information on the circumstances in particularly Articles 10 and 11 some other democratic countries which can be - evaluate the European Council’s compared to the Norwegian, both with regard Recommendation on rules against to international obligations and political corruption in the financing of political tradition. parties and election campaigns The Committee shall also evaluate the present financial ramifications for the political The Committee shall report on how political parties. In that context should be evaluated to parties and groups in Norway finance their what extent the level and allocation of state activities, retrospective for the last two to five subsidies are appropriate based on the tasks years. By “political parties” is meant parties which are carried out by the parties. In which are registered in accordance with addition, the question regarding types and Chapter 5 of the Election Act. By “groups” is extent of private contributions should be meant proposers, outside registered parties, commented. who present lists in accordance with Chapter 6 In a decision of 13.12.2002, Parliament of the Election Act. By “financing” here is requested the Government to present a understood all sources of income, for example, Proposition on amendments to the Act of 22 wages and capital income, subsidies, donations May 1998 No. 30 relating to publication of the etc. political parties’ income. The Request (No. In order to identify existing forms of 178) reads as follows: financing, the Committee shall start with “Parliament requests that the Government undertaking a broad review of the parties. In presents a Proposition on amendments to the addition to the seven largest parties, measured Act of 22 May 1998 No. 30 relating to according to the election results at the General publication of the political parties’ income. Election 2001, the Committee shall also The amendments should entail that the Act examine the financing circumstances of one or shall: more smaller parties. It is also desirable to a) include all organisational levels of political have clarification of the financing of one or parties, more groups that have presented / shall present b) include requirements that all forms of lists in connection with the municipal and contributions of values over NOK 20 000 county council elections in 1999 or 2003. It shall be accounted for, whether they are will be of particular interest to clarify to what made in cash or other forms of non- extent the parties have assets in or are financial contributions, including work financially bound or relation to other efforts and other efforts which can be

calculated to be a value of NOK 20 000 or Committee shall evaluate alternative financing over, arrangements for political parties, including c) define donors as private persons or proposing changes in the framework legal entities conditions which can maintain and/or d) set requirements that donations from strengthen the assumptions for a sustainable donors who are, or who are organisational- democracy characterised by diversity and ly connected to one of the main industrial breadth, both concerning opinions and organisations, shall be accounted for and involvement. accounts presented collectively, as one The financial consequences of the contribution from one donor to one party, Committee’s proposal shall be discussed e) set requirements that a declaration is separately, cf. the Reporting Instruction. At presented together with the party’s least one of the proposals shall be within the accounts, that there are no oral or written ramifications of Chap. 1530 of the Fiscal contracts between the donor and Budget. political parties or their elected It is assumed that the Committee’s Bill representatives at any level, and that there proposal will be formulated in accordance with is no agreement that can be interpreted as the recommendation in the guidance issued by reciprocity or expectation of reciprocity the Ministry of Justice, Legislative Technique (cf. Recommendation to the Odelsting No. and Preparatory Works. 28).” The Committee’s recommendation shall be presented to the Ministry of Labour and The Committee shall discuss the amendment Administration by 17 October 2004” proposition which the Committee has proposed, and how it best can be implemented In April 2004 the Committee received the in legislation. following additional mandate: Norway has given its approval of a draft of the European Council’s recommendation “Section 3-1, subsection three of the “Recommendation of the Committee of Broadcasting Act at present prohibits Ministers to member states on common rules advertising for political messages on against corruption in the funding of political television, including advertising for political parties and electoral campaigns”. The parties. With the aim of lifting the prohibition Recommendation is not binding on the states, of advertising of the political message the but the Committee should nevertheless Committee shall draw up schemes which: consider how the recommendations contained a) require the television companies to provide in the Recommendation can best be ensured in free broadcasting time to the political Norwegian law without coming into conflict parties with Articles 10 and 11 in the ECHR and b) limit how much a political party can spend Norwegian political tradition. An electronic on political advertising on television. version of the Recommendation is to be found c) introduce maximum limits for how much here: broadcasting time a political party can buy http://wcm.coe.int/rsi/common/renderers/rend_ standard.jsp?DocId=2183&SecMod Regarding item a) the Committee is The Committee shall also discuss the rules requested to outline criteria for how a scheme and conditions for the state subsidy system for for distribution of broadcasting time can be political parties in Chap. 1530 Ministry of planned with regard to the following: Labour and Administration, (P-650 of - which parties should be included in the 24.5.1993), and possibly also examples of the scheme rules for municipal and county subsidy systems - allocation of broadcasting time as well as other Acts and Regulations of to the various parties relevance to party financing. - extent of broadcasting time allocated In summary, the Committee’s task with to the parties and which television regard to assessments is two-fold: The companies that should be included in Committee shall assess the degree to which the scheme income of political parties should be subject to state inspection and control. In addition, the

Regarding item b) the Committee is requested to assess: - criteria for setting a limit for a total amount - the suitability of differentiating the maximum limits in relation to different parties

Regarding item c) the Committee is requested to assess: - criteria for setting maximum limits - the suitability of differentiating limits in relation to different parties

An assessment should be made of whether special rules should be in force for the periods before an election. The Committee is also requested to assess whether there are other methods to regulate the extent of political advertising on television.

The Committee’s proposal must lie within the ramifications set by Norway’s international obligations – including the European Convention on Human Rights, Article 10. The mandate is delimited versus what fundamental and legal problems such measures can entail in relation to the broadcasters who will be included in the scheme. The report on the above-mentioned questions shall be presented to the Ministry of Labour and Administration as a part of the Committee’s report as a whole.“

The Committee’s work The Committee has had a total of 13 meetings. Meetings have been held with experts and persons with special experience. In order to identify the political parties’ financing practice, the Committee has held a questionnaire among the parties’ county and municipal organisations and among the municipalities and counties. Reference is made to para. 1.4 in the Recommendation for a further report on the Committee’s work.

3 On the round of consultations

In a letter dated 6.12.2004 The Ministry of The Ministry of Culture and Church Government Administration and Reform Affairs (MCCA) has carried out a separate (MOD) sent out Official Norwegian Report consultation round on the part of the report 2004:25 “Money counts, but votes decide” for concerning Section 3-1, subsection three of the comment by a broad selection of consultative Broadcasting Act on prohibition of political bodies. About 530 entities have commented, advertising, i.e. Chapter 8 of the report. As including all municipalities and county mentioned above, this matter is being followed councils. The Ministry’s consultation round up by MCCA. has included the parts of the report which are The Ministry of Government included in the main mandate, i.e. financing of Administration and Reform has received about political parties and the activities of democratic 65 comments from consultative bodies on the groups as well as publication of income and matter. A selection of comments is presented reporting system. in Chapter 4-8 below.

4 Registration of political parties

4.1 Definitions Norway there is no requirement that the parties ______must be registered in order to participate in an election, and neither is it a condition for In the Proposition, the Ministry uses the registration of the party name that the party Committee’s definitions of political party, participates in an election. Registration is political lists and democratic groups, undertaken altogether independent of elections. respectively, as they are presented in para. 3.1 That the provisions regarding party registration of the recommendation: By “political party” is at present are to be found in the Election Act is meant parties which are registered in natural since there have not been other places accordance with Chapter 5 of the Election Act. in legislation where the rules have been better Other proposers who provide lists at elections, suited. In the opinion of the Committee, it are designated “political lists”. Democratic would be correct and efficient from a legal- groups refer to representatives who act in co- pedagogic point of view to collect all the rules ordination in Parliament, county or municipal which apply particularly to the political parties, councils and who are elected either for a in a common Act. Such proposal will also political party or for a political list. contribute to achieve the goal that the legislation shall reach the people it applies to. 4.2 Current law The provisions regarding party registration are of no significance to public authorities that are involved in holding elections. There is The current provisions governing registration therefore no reason to believe that the proposal of political parties are found in Chapter 5 of for moving to the Party Act will be of any the Election Act (Act of 28.6.2002 No. 57). inconvenience to the authorities. The Act assigns the registration authority to The Committee is also in favour of the Brønnøysund Register Centre. The rules dissolving the special Complaints Board for lay down conditions for registration of party consideration of complaints against decisions names, what is required to get a party name in registration cases according to the present changed and when the party name is freed. It is Election Act. The Committee proposes that the also laid down that the party shall keep the cases which this Board considers are instead Brønnøysund Register Centre updated with considered by a new independent board that is regard to who is elected to the Executive Board appointed to monitor that the rules concerning of the Party at all times. party support and income reporting are

complied with etc. The composition and tasks 4.3 Proposal by the Democracy of the board are further described in para. 6.12 Financing Committee in the recommendation and in Chapter 8 of this Proposition. The Committee proposes that the rules The Committee proposes that the regarding registration of political parties are responsibility for administration of the party included in a common Act – “Act relating to registration scheme is transferred from the certain circumstances concerning the political Ministry of Local Government and Regional parties (Party Act)”, cf. para. 9.1 in the Development to the Ministry of Government recommendation. In this manner, clear and Administration and Reform – which according systematic legislation is obtained in which all to the proposal will have the responsibility for the regulations especially governing political administration of the new Party Act. Further, parties, are collected in one, common Act. reference is made to para. 9.3 in the The Committee points out that the Election Committee’s recommendation. Act otherwise regulates the rights of citizens in The Committee does not propose connection with election and directs how the amendments to Chapter 5 of the Election Act authorities shall prepare for the election. other than those necessary to move the rules to Registration of parties is not a part of holding a new Act and that the complaints authority is elections in Norway. Both registered parties assigned to another body. and other groups can stand for election. In

4.4 The view of the consultative system from the Election Act, Chapter 5, to the bodies new Party Act as a proposal of legislative technique and administrative type, without The Ministry of Local Government and being said to influence the parties’ rights or Regional Development, which has the obligations in any way – or otherwise entailing responsibility for the Election Act, has no any substantial changes in current law. comments to the proposal. In this proposition the Ministry reflects the Committee’s proposal to move the rules from The Ministry of Justice (MoJ) states in a letter the Election Act to the Party Act. The Ministry dated 2.2.2005: regards it as natural that the Ministry of “ In Chapter 9, the Committee proposes Government Administration and Reform, that the rules on registration of party which at present has the administrative names, financing of the parties’ activities responsibility for current law on publication of and publication of their incomes are political parties’ income, and which also has contained in a separate Act. The the administrative responsibility for the present Committee is of the opinion that system of state support to the political parties, collecting all the rules which apply is assigned the same responsibility for the new particularly to the political parties in one Party Act. According to the proposal this will common Act, will make the rules more also include the authority concerning party easily followed and protect important registration which is assigned at present to the legal-pedagogical considerations. As the the Ministry of Local Government and Committee itself points out, the Regional Development. alternative will be to include the The Ministry’s Proposition is based on the provisions in the Election Act. The proposal for amendments to the Election Act Ministry of Justice has no significant which the Government has proposed in objections against the solution proposed Proposition to the Odelsting No. 44 (2004- by the Committee.” 2005), cf. also Recommendation to the Odelsting No. 60 (2004-2005). The Conservatives support the Concerning the Ministry’s evaluation of Committee’s proposal for an Act which the proposal on establishing a new independent includes rules on registration, financing and board which inter alia shall take over the publication of the parties’ incomes at the same authority at present assigned to the Complaints time as the guidelines and annual Circular Board according to the Election Act, reference issued by the Ministry of Government is made to Chapter 8 of this Proposition. Administration and Reform are replaced by statutory rules. The proposal is also supported by Vestfold County, while other consultative bodies have no objections or remarks to the Committee’s proposal.

4.5 The Ministry’s evaluations ______

An evaluation of the party registration arrangement is not part of the Committee’s mandate. The Committee has not undertaken a material evaluation of the rules or proposed amendments beyond that which is regarded as necessary so that the rules can be worked into the new Party Act.

The Ministry is evaluating the proposal regarding moving of the party registration

5 Public financing of political parties’ organisations and democratic groups

5.1 Present subsidy system requirement for registration in accordance with ______Chapter 5 of the Election Act, there are also requirements that the party must have State subsidies to political parties presented party lists (plain or common lists) in Political parties are provided financial support at least half of the election districts as well as by different state subsidy systems. An annual having achieved at least 2.5% support on a subsidy for the number of votes is at present national basis at the last general election. The granted to the parties’ central, county and Ministry of Government Administration and municipal organisations. There is also an Reform pays subsidies to the parties’ central annual group subsidy awarded to democratic organisations on a quarterly basis. groups in Parliament, County Councils and Vote subsidies to the parties’ county and Municipal Councils. In addition, there is an municipal organisations are paid by the annual subsidy granted to the central and counties and municipalities respectively with county youth organisations. Further, the reimbursement by the state through the County parties’ central organisations receive subsidies Governor by the end of the appropriations to hold nomination meetings during the year. election year. The parties receive in addition Parliament appropriates annual subsidies state subsidies for press and adult education to the parties’ central youth organisations purposes. through Chapter 1530 item 76. Since 1995, the Parliament makes appropriations for parent party’s number of votes at the last annual subsidies in the Fiscal Budget to General Election have been the allocations political parties through Chapter 1530 criteria for subsidies to the individual central Subsidies to the political parties. Further rules youth organisation. The scheme is drawn up so on the state party subsidies system are given in that subsidies are only paid to the youth the guidelines P-650 of 24.5.1993 issued by organisation through item 76 if the parent party the Ministry of Government Administration qualifies for support through item 70. The and Reform. Subsidies are granted upon Ministry of Government Administration and application and are for the whole of the Reform pays subsidies to the youth election period. There are no conditions organisations on a quarterly basis. attached to the use of the subsidies, and the Subsidies to youth parties in the individual state does not control the use of the funds. county are contingent upon the number of Subsidies are awarded in the form of vote votes obtained by the parent party at the last support and group support. The parties’ county council election, and are channelled to central, county and municipal organisations are the youth party via the parent party’s county eligible for subsidies. Political lists which are organisation. The system is designed so that a represented in local democratic bodies, are higher vote support is given to county entitled to group subsidies. (See also the organisations having a youth organisation in paragraph below dealing with subsidies to the county. democratic bodies). Further, subsidies are According to the present rules, every other awarded to the political parties’ youth year a nomination subsidy is paid to the organisations at a national and county level. parties’ central organisations. Since 1992 the The vote subsidies are reserved for parties subsidy has been appropriated through Chapter that are registered in accordance with Chapter 1530 as a part of the support through item 70 5 of the Election Act and are dependent on the (in an election year) and based on the same number of votes the parties’ obtained at the last conditions as the general subsidies to the election, i.e. that payment takes place in parties’ central organisations. In 2003, the accordance with a fixed rate per vote. nomination subsidy was NOK 5.8 million. An The state subsidies to the parties’ central equivalent amount applies to 2005. Half of the organisations are appropriated through this is distributed according to the number of Chapter 1530, item 70. In addition to the votes at the last preceding General Election,

while the other half is divided equally among million for informational activities and about the parties. NOK 2 million in distribution support. It is a A central impartial committee has been set requirement for receipt of subsidies that the up to decide any assessment questions in party is represented in Parliament. In addition, connection with allocation under Chapter the party must have presented a list in at least 1530. This committee also decides any half of the election districts and had support of complaints with binding effect. The committee at least 2.5% at the last general election. is appointed by the Ministry for Government Administration and Reform for a four-year Subsidies to democratic groups period and is composed of a Supreme Court The Parliamentary groups receive subsidies Judge (Chairperson), a Labour Court Judge annually through the Fiscal Budget Chap. 41, and a representative from Statistics Norway. item 70, for employment of secretaries and Reference is also made to a further description case executives. The subsidy is in two parts, a of this committee in Chapter 8 below. variable component and a fixed component. State subsidies to adult education The variable component (representative organisations (study associations) are subsidy) is dependent on the size of the appropriated annually through the Fiscal Parliamentary group in that a subsidy is given Budget Chap. 254, item 70. The statutory basis for payment of salary to one secretary / advisor for the subsidy scheme is the Act of 28 May for each representative in the group. (As at 1 1976 No. 35 relating to adult education with January 2004 this support was fixed at NOK appurtenant Regulations. Both party-neutral 481 272). The fixed component (basic subsidy) and party-connected educational institutions is a common subsidy for all Parliamentary can apply for subsidies for study activities. At groups.1 The basic subsidy as at 1 January present, most of the parties have such study 2004 was fixed at just over NOK 1.4 million. associations that hold various forms of courses, For groups in the opposition an addition to the study groups, seminars, etc. A total of just over basic subsidy is given which varies according NOK 38 million was appropriated for party- to the size of the group. Parliamentary groups connected study associations in 2004. Support with three or four representatives receive a to the study associations can nevertheless not 50% higher basic subsidy than groups in be regarded as party subsidies. Formally, the position. Parliamentary groups with five or study associations are independent more representatives receive a 100% higher organisations with separate Boards. The basic subsidy. Parliamentary groups with fewer subsidies to each study association are than three representatives do not receive an calculated mainly based on the number of opposition addition.2 (In total, appropriations study hours given at the educational were made of just over NOK 96 million to the institutions. Parliamentary groups in 2004). Press subsidies are appropriated annually Subsidies to democratic groups in county through Chap. 335 in the Fiscal Budget and its councils and municipal councils are aim is to ensure multiplicity and diversity of appropriated annually through items 72 and 74 press coverage. The political parties also of Chap. 1530 in the Fiscal Budget. Upon benefit from this subsidy arrangement. Under application, the democratic groups are given a item 76 Subsidies to various publications, common basic subsidy – independent of the appropriations are made for informational size of the group, as well as a fixed addition activities in political parties, as well as for each representative in the group. The distribution of the parties’ own publications. election results form the basis for the full The rules for allocation are given in the election period so that the amount of subsidy to Regulation relating to subsidies for party the individual group will be the same – information dated 8 February 1999. The unaffected by any changes in the size of the subsidies for informational activities consist of group during the election period. a common basic subsidy and a variable subsidy which is dependent on the number of votes at the last general election. The subsidy for 1 Independent representatives receive only half of the allocation depends on the number of party representative subsidy and do not receive a basic subsidy publications distributed. In 2003, 2 appropriations were made of just under NOK 9 See Recommendation to the Government No. 340 2000-2001) and Parliament’s decision of 11 June 2001.

The requirement to be registered as a party doubt about the legitimacy of this type of in accordance with Chapter 5 of the Election scheme. Act does not apply to allocation of the basic Some questions were touched on in an subsidy, in other words, representatives who opinion of 18 May 1976 by the Commission have been elected to the political lists also under the European Council’s old monitoring receive this subsidy. As for the arrangement system: Association x, y and z versus under Chap. 1530 otherwise, there are no Germany. The Commission concluded inter conditions made for or control undertaken of alia that the right to freedom of thought, the use of the funds. The subsidy is paid by the conscience and religion contained in ECHR municipalities and the counties with Article 9 does not protect the taxpayer against reimbursement by the County Governor. state subsidy systems – even though they also (In 2004, the basic subsidy and representative support parties which the individual taxpayer subsidy were NOK 25 992 and NOK 6 003 for does not wish to support. ECHR Article 11 on the county councils, compared with NOK freedom of association does not protect against 3 090 and NOK 1 110 for the municipal the states setting conditions for assigning rights councils). to organisations – as, for example, the right to participate in an election. It does not represent Municipal and county subsidies an infringement of ECHR Article 11 or Article Up until 1975, under the then Section 23 of the 3 in the Additional Protocol 1 that states have Municipality Act, the municipal councils or a support system which only concerns political executive committees of the local councils parties and not other associations.4 were not allowed to allocate funds to political In the opinion of the Committee, there are organisations or for political purposes.3 The no international law limits to Norway purpose of this was to prevent municipal funds continuing state subsidies to political parties from being misused so that one group in a under certain conditions. municipal council could give preferential In the European Council’s treatment to one single party, a party Recommendation on financing of political newspaper etc. This provision was repealed in parties, it recommends in Article 1 that the 1975 at the same time as the state subsidy states give support to the political parties to a scheme for the parties was extended to include reasonable extent and that the distribution the parties’ county and municipal takes place according to objective, fair and organisations, cf. Report to the Storting No. 19 reasonable criteria. (1974-75). In addition to the introduction of state party support to the municipal and county 5.3 Democracy Financing Committee’s councils, there was also an opening for the considerations and proposals individual municipal or county council to grant an extra subsidy to the parties from their own The Committee points out that the subsidies to budgets. In para. 3.5. of the Recommendation the party organisations have had a considerable the committee gives a further description of the real growth since the mid-1980s. The average extent of the municipal and county party real growth of the subsidies lies above the total support. average growth of appropriations during this period. This means that the subsidies to the 5.2 The European Convention on parties are given priority in relation to other Human Rights (ECHR) purposes in a budgetary context. The level of ______State subsidy schemes 4 State subsidy systems for the political parties 6 The Commission states: ”The purpose of this system are found in many countries. The Committee is to make the parties more independent of sources of money, which might unduly influence their political has not found opinions by the European Court actions. Whether the subsidy is at all paid and what of Human Rights (ECHR) which can sow amount is paid to any particular party depends on its success in the election and therefore reflects the real importance of the party concerned. It follows that 3 neither the subsidy as such nor the way in which it is An exemption was granted for ”political youth allotted to the various parties can be said to be a organisations, study and informational work and condition which does not ensure the free expression of other social, cultural and practical activity”. the opinion of the people.”

the party support in Norway is high compared - The public exchange of words must be to other countries – even higher than our given thought-out standpoints which are Scandinavian neighbours. During just one binding enough to be able to be realised as generation, the state subsidies have been one actual politics main source of income for the parties. Some of - Recruitment and training must be secured the parties are practically fully financed by the so that it can always result in competent state. political leadership The growth in state subsidies has mainly taken place by an increase of the subsidies to The Committee points out that an efficient the parties’ central organisations. This has solution of these tasks requires sensitivity provided the foundation for increased activity towards the voters, fixed organisation and in the form of professionalisation of the long-term involvement. It is this role the administration, increased use of internal political parties fill and which makes the research committees and employment of more parties one of democracy’s most important salaried employees. The subsidies to the cornerstones. parties’ county organisations and municipal The Committee points out that the state organisations have in reality been almost share of the income varies considerably from constant during the same period. Parallel with party to party – from under half to almost the the increase of the subsidies, the political whole of the income base. Traditionally parties have experienced relief in that they also important sources of income for the parties, as, have had an advantage of the IT revolution and for example, membership fees, have been the efficiency gains which have accompanied reduced as a result of a marked fall in it. membership numbers. The development in the parties’ framework Any attempt to force the parties to increase conditions is characterised at the same time by their self-financing by reductions in state failing self-financing possibilities, pressure of subsidies, will probably contribute to sharp increased costs and considerably increased competition between the parties and other requirements set for the parties as premise organisations on involvement and income. The providers. The membership numbers are Committee does wish such a development. falling and good-sized contributions from Increased self-financing by business activities organisations in the private sector are absent. or administration of assets is not desirable At the same time, there are increased either. The parties are and should be something requirements regarding professionalisation of other than commercial enterprises. the party organisations. Extended and more The Committee is of the opinion that in expensive election campaigns follow the Norway there is no danger that in the event of increased competition for the votes of floating increased state financing, the parties will voters. develop a dependency on the state and become distanced from their voter groups and their Necessity for public subsidies membership portfolio. The thesis on “the cartel In the Committee’s opinion there is still a party” (cf. para. 2.7 in the Recommendation) necessity for state subsidies to be granted to gives an apt description of the present the party organisations and democratic groups. Norwegian parties only to a small degree. The Committee points out that representative The proposals presented by the Committee democracy assumes that certain core tasks are regarding lower financial limits, carried out: encouragement for differentiated financing and - Complete and competitive political full right of disposal over state subsidies will alternatives must be drawn up and strengthen the parties’ autonomy in connection communicated to the voters with state support. - Election lists must be organised around the The committee recommends that state alternatives subsidies to the parties should continue to be - The decision activity of the elected granted as free contributions, which are not representatives must be co-ordinated to bound to specific purposes and where there are reflect the political alternatives and to no controls regarding the use of the funds. make the elected representatives At present the scheme and principles for accountable to the voters allocation are stated in a Ministry Circular. The

Committee is of the opinion that this only to a not meet these requirements, have no basis for small degree safeguards the rules against establishing a permanent alternative in random changes and does not contribute to Norwegian national or local politics – easy access either. On the basis of the something which makes these entities less Recommendation the Committee is of the worthy of subsidising. opinion that the subsidy scheme should be The Committee points out that some based on rules of a higher rank. In order to unregistered parties have missed out on safeguard the transparency of the scheme, the considerable amounts of money by omitting to Circular should be replaced by statutory rules. be registered. The largest unregistered county party, at the 2004 rates, could have received State subsidies are reserved for almost two million kroner in vote subsidy upon registered political parties registration. The equivalent figure for the The Committee’s majority is in favour of the largest unregistered municipal party is almost reservation of state subsidies for political NOK 50 000. parties that are registered according to the rules According to the Committee’s proposal, in the Election Act. unregistered parties or lists who win The Committee defines a political party as representation on municipal councils and an organisation which performs certain core county councils, will also receive group tasks (cf. the above paragraph). Political lists subsidies and representative additions, cf. the do not meet all the definition criteria. Such paragraph dealing with transfer of group lists are almost always organised around one or subsidy in accordance with the present rules P- a limited number of individual cases without 650 of 24.5.1993 to the municipalities and being based on an overall ideology for the counties. Unregistered parties or lists’ groups development of society. will therefore receive the same operational The absence of a complete and detailed conditions as registered parties’ groups. political programme makes it difficult to achieve party discipline outside that or those Basic subsidy and vote subsidy individual cases which the list reflects. Low The Committee proposes that the vote subsidy party discipline is a bad starting point for co- in the future is allocated in the same amount of ordination of views in democratic entities. money per vote obtained at the last election. Lists with a permanent organisation and which The basic subsidy is allocated in the same are stable over time, will also have ambitions amount of money per party entitled to of contributing to recruitment and training of subsidies. Total appropriations at the political leaders. Scale advantages nevertheless individual administrative level is allocated indicate that recruitment and training should be with 9/10 as vote contribution and 1/10 as handled more efficiently by national parties. basic contribution. The Committee is of the opinion that the A model where subsidies are given as a requirements for achieving registration combination of one fixed and one variable according to the provisions of Chapter 5 of the component is relatively normal internationally. Election Act are relatively modest. Firstly, the Of the 21 democracies about which the party name must be unique enough not to be Committee has collected information regarding confused with existing party names. Then an subsidies (cf. Table 4.1. in the Executive Board must be appointed which has Recommendation), 1/3 provided subsidies as a the authority to obligate the party. Lastly, the combination of result-dependent support party must mobilise statements from at least (based either on votes or representatives) and a 5 000 persons having voting rights in a general basic subsidy. election, that they wish the party name to be registered. Since the requirements for Further on basic subsidies registration are so simple to meet, the A basic subsidy contributes to even out the Committee thinks that some political lists omit incomes between the parties and can reduce to be registered as political parties because the significance of private contributions in they do not wish to build up a permanent party politics. Dissimilarity between the parties with organisation around an overall programme. regard to financing can thereby have less The Committee is of the opinion that there is significance, while attractive programmes and reason to believe that parties that cannot or will competent leaders can have equivalently larger

significance for achieving election results. For percentage of votes required for representation the parties the basic subsidy will mean that it very low so as to include all who are will be easier to predict operations. represented at present. A low percentage On the other hand, the basic subsidy will criterion, however, could mean that the party contribute to weaken the financing system’s constituency which is not represented at self-strengthening effects in that the present and has little chance of being so in the connection between election success and future, will also be included in the financial strength is moderated. In this way, arrangement. the voters’ judgement will have less noticeable On the other hand a percentage criterion – financial consequences for the parties, which if it is set higher than the effective minimum must be regarded as unfortunate for the percentage of votes required for representation democracy, seen as a whole. The basic subsidy in the Election Act – could mean that the will mean that the parties’ support will be parties represented do not have sufficient affected to a greater degree by public support to receive a basic subsidy. subsidies, something which must be regarded The Committee is of the opinion that as negative. registered parties who win representation The Committee is in favour of a relatively should not be excluded from the basic subsidy. high basic subsidy – particularly at county The Committee proposes that a relatively high level and at national level – and is of the percentage limit is combined with a rule that opinion that it is necessary to have an entrance registered parties who win representation, are criterion for allocation of the basic subsidy. in any case qualified to receive basic subsidy. The Committee has considered two The Committee evaluates its proposal for a alternative criteria – the vote criterion and the percentage limit for basic subsidy as equivalent percentage criterion: with a vote criterion, the to the actual minimum percentage of votes party organisation with a relatively high required for representation in the Election Act5 percentage support (but nevertheless few – i.e. 4% at the municipal council and county votes) in small municipalities will fall on the council election, and 2.5% at a general minimum percentage of votes required for election. representation, while the organisation with a relatively low percentage of support in large Further regarding vote subsidies municipalities will not. A vote criterion will According to the present rules, the local and entail that the possibilities of crossing the county organisations belonging to registered minimum percentage of votes required for parties receive an amount of money per vote representation will vary with participation in obtained at the last election (in 2004 NOK 12 voting in the constituency. With a percentage for the local organisations and NOK 29 for the criterion the requirement regarding the number county organisations). The Committee is in of votes for the smallest party organisation favour of retaining the present entrance entitled to subsidies (lower limit) vary with the requirements for vote subsidies in local and size of the constituency. Such criterion appears county elections. Further, the Committee is most reasonable for the Norwegian municipal also in favour of rescinding the minimum structure where one finds considerable percentage of votes required for representation variation with regard to size. The Committee of 2.5% on a national basis to receive vote proposes that current law is used as a starting subsidies in general elections. Small registered point, i.e. that the percentage criterion is used. parties that stand in national elections, are Representation on municipal councils and serious challengers to the present party system. county councils depends inter alia on the size Such parties must be regarded as having of the constituency and competition between ambitions for making their mark over time the participants. From the last municipal with overall solutions in answer to society’s council and county council elections, the challenges. Such parties should not be Committee has found cases where registered discriminated against or disfavoured through political parties have won representation with the design of the state financing scheme, but so little as 1.4% of the constituency votes behind them. 5 By using a percentage criterion alone, it In municipal council and county council elections there will be necessary to set the minimum is average support for parties that win one mandate of about 4%.

should be on the same footing as the large operations. This principle is not followed in the parties as regards appropriation of vote present arrangement where subsidies are subsidies. appropriated through the fiscal budget to The proposal entails that registered parties democratic groups in the country’s at all levels will receive support from the first municipalities and counties (group subsidies vote. This ensures that registered parties who and representative subsidies). do not win representation at an election, also A functional democracy assumes that receive subsidies for their party organisation democratic bodies are free to organise and are thereby put in a position to compete at themselves in an appropriate manner and to future elections. finance their own operations. At present, Table 7.1 in the Recommendation shows Municipal councils and county councils can what consequences the proposed limits will choose their own form of organisation within have for the registered parties. relatively wide legal limits, including fixing an The Committee’s proposal concerning upper number of representatives to democratic basic subsidies and vote subsidies can be bodies and choosing the executive principles summarised thus: which are to be followed. Municipal councils - basic subsidies and vote subsidies are and county councils are also free to give granted only to parties that are registered monetary support to their own democratic according to the provisions of the Election bodies from their own budgets, i.e. monetary Act support which comes in addition to the state - no minimum percentage of votes required subsidies to the democratic groups. for representation for allocation of vote The Committee’s investigation show that subsidies to registered parties, either on a the county councils subsidies to the county national level, county level or local level parties equate to about half of the support - basic subsidies are granted to the central amount that the state grants. The municipal organisation of registered parties if the accounts show that considerable funds are party received at least 2.5% support on a given to political institutions. Reference is national basis or won at least one made to para. 7.7 in the Committee’s Parliamentary seat at the last Recommendation for further description of the general election. municipalities’ and counties’ accounts. - basic subsidies are given to county The Committee proposes that government organisations of registered parties if the subsidies to municipal and county democratic party received at least 4.0% support or groups (group and representative subsidies) are won at least one seat in the last included in the state block subsidies to election of the county council in question municipalities and counties. At present the - basic subsidies are given to the municipal amount of these subsidies is NOK 27 million. organisations of registered parties if the The fact that the party organisations and party party received at least 4.0% support or at groups receive independent financing through least one representative in the last election the fiscal and municipal budgets respectively, of the municipal council in question would be able to contribute to a better - the present requirement that county and functioning local democracy. The proposal will municipal parties must have an also simplify the state subsidy scheme for the organisation in the county or municipality parties. Group and representative subsidies will in order to receive vote subsidies and basic therefore correspond better with the subsidies, is retained arrangement that applies to the parties’ Parliamentary groups. The Committee also proposes wording in the In order to ensure that the municipalities legislation which provides for no subsidies to finance groups in a non-distorted manner, the be paid if the subsidy amount is less than the Committee is in favour of statutory regulation costs of administration of the payment. of the manner in which the subsidies can be granted – according to the model in the Responsibility for democratic groups Swedish legislation. The chosen wording of The Committee is of the opinion that the Act is carried on in Section 10, subsection democratic bodies as a main rule should be two of the Proposition for a new party Act, cf. responsible for financing of their own Chapter 12 below.

Financing of youth organisations governmental appropriations to the political Under the present arrangement the parties’ parties and to paragraph 7.14 regarding the youth organisations receive governmental proposal for the manner of appropriations. subsidies at the central and county levels. The subsidies to the youth organisations at a central Re-adjustment to unchanged subsidies level are given upon application to the during the full budget year Ministry by the parent party. The amount of In order to contribute to increased financial the subsidies is dependent on the parent party’s predictability for the parties, the Committee support at the last general election in the form proposes that the subsidies be left unchanged of a fixed rate per vote. The subsidies are during the full budget year – i.e. not as at appropriated through Chapter 1530 item 76 present and changed immediately there are Subsidies to the parties’ central youth new election results available. The parties will organisations. then receive subsidies assessed on the basis of The subsidies to the youth organisations at the previous election up to the change of the the county level are granted to the county year after a new election. Parties in recession parties with youth organisations upon are given somewhat more time to adapt to such application to the county. Calculation of the re-adjustment. subsidies is based on the party’s support at the last county council election in the form of an 5.4 View of the consultative bodies addition to the rate for vote subsidies, item 73, Requirement for state subsidies Subsidies to the county parties. No subsidies None of the consultative bodies have raised are granted to the parties’ youth organisations objections to the public grants to political at municipal level. parties being continued. In the opinion of the Committee, it would Red Election Alliance (RV) states the be advantageous if the subsidies to the parties’ following in a letter dated 31.1.2005: youth organisations at the county level were appropriated through a separate item in the “ Concerning the state subsidy scheme, Fiscal Budget. In this way, it would clearly be RV supports the intention in the proposal shown in the budget documents how much to limit the effects of state subsidies on subsidy is granted to the parties’ county the parties support, secure the parties’ organisations and the parties’ youth autonomy, build confidence in the organisations at the county level respectively. politicians and political institutions and For budgeting purposes, the arrangement is ensure a satisfactory extent and harmonised with that which applies to the satisfactory quality of the parties’ tasks.” central level. The Committee sees no necessity for separate subsidies to the parties’ youth The Conservatives emphasise that it is organisations at the municipal level. important that state party financing in no way binds the parties, and in the same way avoids Earmarked subsidies that the parties become unilaterally dependent The Committee recommends that earmarked on state party subsidies. It is just for these subsidies to the parties be phased out and reasons that it is important to ensure that the granted in the future as free subsidies. parties are also able to receive other income. In the 2004 budget, earmarked subsidies The Centre Party’s Executive Board states amounted to about 5% of the total subsidies to the following in a letter of 17.1.2005: the parties through the Fiscal Budget, equivalent to NOK 11 million. The earmarked “In the financing of the parties’ activities it subsidies are granted in the form of press is necessary that the state assumes support to the parties and nomination support responsibility for the public financing of through Chap. 1530. Reference is made to the the parties. The municipal sector’s description of the nomination support in the finances are subject to strong controls by paragraph above and in paragraph 7.6 of the the state. It is therefore reasonable that the Committee’s Recommendation . main responsibility for financing of the Reference is made to paragraph 7.12 in the parties’ county and local levels are by the Recommendation for the Committee’s state.” viewpoints concerning the future level of

The same statement is made by Grong support on the same lines as the registered municipality. parties in the democratic bodies they are The Confederation of Norwegian Business elected to. and Industry (CNBI) in general supports Several, including Hamar Municipality, continuing to provide financial support to the Hamar City and Rural List and Suldal political parties. It is important that this Municipality are on the contrary of the opinion support is granted based on simple, template that also unregistered groups and lists should criteria which ensures a large degree of receive vote support from the first vote. Hamar transparency and confidence in the support City and Rural List points out that these lists arrangements. are extensive and that over 600 representatives The National Federation of Trade Unions around in the country’s municipalities are (NFTU) is in agreement with the Committee elected on the basis of such lists. Reference is that it is a state task to provide financial also made to the difficulties with being able to support to the political parties and is of the collected as many as 5 000 signatures in small opinion that it is important that the parties’ municipalities. finances enable them to be independent of Kvinnherad states in a letter of 31.1.2005: support from private persons to a large degree. The parties must not be put in such a position “ In order to ensure the broadest possible that they have to increase membership fees to democracy, established groups that have finance the activity. provided lists and have representatives, Several state that the level of support must also receive support on a line with should be increased, including Surnadal ordinary political parties.” Municipality and Grong Municipality. The Norwegian Association of Local and Regional RV is of the opinion that everyone who Authorities is keen that the support to the local provides lists at an election should be entitled levels is increased considerably “from the to vote support, group support and present 10% of support”. representative addition on the same lines as registered parties. State subsidies are reserved for registered political parties Basic subsidy and vote subsidy Several, including Trondheim Municipality, The Conservatives state in a letter of 1.2.2005: support the Committee’s (majority’s) proposal to limit the state party support to registered “The Conservatives consider it a matter of political parties. Enebakk Municipality course that an election result must have supports the proposal “out of regard for order consequences for the amount of state party in the system”. The same is stated by Vestre subsidies. A percentage distribution of the state Toten Municipality. party support, in line with the size of the Stord Municipality states in a letter of parties at an election, must therefore be a basic 26.1.2005: principle. Based on an overall evaluation, the Conservatives can nevertheless stand behind “State party financing should be limited to that a smaller fixed amount be given to all political parties. In addition, requirements parties over a certain size, as the Committee should be set regarding a certain support at proposes. (..) The introduction of an elections in order to be entitled to receive arrangement where subsidies are divided into a support. This limit should in principle be the vote subsidy and basic subsidy, 9/10 and 1/10 same as the minimum percentage of votes respectively, will lead to redistribution where required for representation, but in any case no the smaller parties will be better off than at lower than 2%.” present. At previous crossroads, the Conservatives have been sceptical to such The Centre Party’s Executive Board redistribution, but will not maintain this supports the proposal that state support shall be standpoint, however, and supports the reserved for parties that are registered Committee’s proposal.” according to the rules in the Election Act: However, it is an assumption that unregistered Several others support the Committee’s parties receive representative and group proposal on splitting up the subsidies in vote

subsidy and basic subsidy respectively, the state’s block grants to municipalities and including Surnadal Municipality and Enebakk counties. Municipality. The Centre Party is of the opinion that the “The County Committee views it as rate for the basic subsidy should be set at 20%. appropriate that support to Stord Municipality is of the opinion that democratically elected groups is the basic subsidy can be set at maximum 25% included in the block grants to (at least 75% vote subsidy). municipalities and counties, and that the Vestre Toten Labour is of the opinion that state at the same time maintains subsidies should consist of a basic subsidy, subsidies in the form of vote subsidies to vote subsidy (according to the number of the parties and their youth organisations. votes) and a representative subsidy (according This clarifies that the state relates to the to the number of representatives). parties directly, while the counties and Many of the consultative bodies also municipalities relate directly to their support the Committee’s proposal for the party groupings in the county councils introduction of a minimum percentage and municipal councils.” requirement for basic subsidies and appurtenant rates, among them Grong Oslo Municipality supports the proposal, Municipality. Trondheim Municipality which is a natural consequence and part of the supports the Committee’s proposal for division municipal autonomy. of the subsidies into a vote subsidy and basic Grong Municipality supports the proposal subsidy and is also in agreement with that payment of group subsidies and minimum percentage requirements. representative subsidies is transferred to the The Pensioner Party is of the opinion that municipalities and counties: the Committee’s proposal for minimum percentage requirements will contribute to “Local allocation is natural since it is up to exclude overall and long-term alternatives with the municipalities and counties themselves good chances for future representation. The to decide the number of representatives on party proposes that the rates are set at 2% for a the municipal councils and county general election and county council elections, councils. It is an assumption that and 1% for municipal elections: legislation makes clear requirements that support shall be given and that it shall “Any desire to “filter out” groups which do be at least on a level with the increase in not meet the stated criteria, must take the block appropriations.” place in another manner, and more selectively, so that it does not affect An equivalent statement is made by the registered parties which work properly Centre party in Østfold. and long-term.” The Centre Party’s Executive Board is of the opinion that a system whereby the state’s RV is also of the opinion that a rate of responsibility for financing of vote subsidies is 2.5% is too high. continued as at present, while the Independent Elected Representatives in responsibility for providing group and Lier finds it striking that a minimum representatives support is transferred to the percentage requirement for basic subsidies is counties and municipalities can be defended – proposed to be higher for local elections that the assumption is that the Committee’s for a general election, because it is at the local proposal of making this legislation is followed elections “the voters sometimes organise up. themselves to provide lists”. Trondheim Municipality is of the opinion that a simplification of the party subsidy Responsibility for democratically elected arrangement is positive, if it is not assumed groups that it is the municipality itself which to a Several of the consultative bodies, among them greater degree than at present shall finance the the Conservatives, are positive to the proposal operation of the parties. that subsidies to municipal and county Rogaland County assumes that the democratically elected groups are included in redistribution of the party subsidies as a result

of the proposition, does not lead to reduced Enebakk Municipality is of the opinion party subsidies for any of the parties, but to an that an assumption must be that the block increase in the total subsidies. It is assumed grants take into consideration the individual that the present state support to groups in municipality’s election results, as the present county councils and municipal councils will in system does. actual fact be included in the state block grants Bærum Municipality and Vestre Toten to the counties and municipalities. Municipality oppose that the group subsidies Aust-Agder county supports the proposal and representative subsidies are included in the that the group and representative support is block grants to the municipalities. transferred to the counties and municipalities. Stord Municipality is of the opinion that The obligation to provide support must be party support at the local level should be compensated in the block grants. distributed locally, but with full state Buskerud County states the following: reimbursement which must not be included in the block grants. “The present group and representative Independent Elected Representatives in subsidy is proposed included in the block Lier Municipality think it is very alarming if grants to municipalities and counties. Per the financing of elected groups is to be left to definition the block grants are unrestricted the municipalities’ strained finances, while the funds, which are distributed according to registered parties are to be financed through priorities set by the county council itself. A the Fiscal Budget. new system and a new Act should in a positive direction lead to that state and Financing of the youth organisations county support is seen in context Grong Municipality is of the opinion that the (Allowance Regulative, para. 3) in such a support to the parties’ youth organisations manner that the county council itself must be kept as a separate subsidy system, as strives to have an overall financing form the Committee proposes. Centre Party’s which in the best possible way makes Executive Board is of the same opinion. for a functional democracy.” The Conservatives are of the opinion that support to the youth organisations at the The Labour Party is hesitant regarding the county level should be given along the lines of change in the practice concerning distribution the model of item 76 in the Fiscal Budget. The of funds to the parties’ county councils’ and Conservatives in Drammen state in a letter municipal councils’ groups by including these dated 9.2.2005. appropriations in the municipalities’ and counties’ block grants, and states in a letter of “Subsidies to the youth organisations 6.1.2005: should be a separate item in the Fiscal Budget and should be paid directly to the “The Labour Party wishes to observe the youth organisations’ own bank account to development in this area in the time ahead ensure their relative independence.” if the Committee’s proposal is accepted.” Earmarked subsidies RV and the Pensioner Party fear that a Trondheim Municipality will maintain the block transfer of items 72 and 74 will lead to present system with information and the subsidies being limited, used for other distribution support. purposes or be included in the municipalities’ Grong Municipality and Centre Party’s ordinary operations. Executive Board are of the opinion that the Samnanger Municipality and Grong Committee’s proposal to include the Municipality are of the opinion that the block earmarked arrangements in press subsidies can grants that are included must not be less than be supported if a basic subsidy to the parties is that which up to now have been earmarked introduced. Likewise, the nomination subsidy subsidies. The first-mentioned points out that can be included in the general party subsidies. this has been taken up on several occasions with the Norwegian Association of Local and Regional Authorities (NALRA) with other inclusions in the block grants.

5.5 Evaluations by the Ministry on state financing as the level of appropriations ______and operating expenses have increased and the State subsidies to the political parties self-financing capability has been reduced, The Ministry shares the Committee’s opinion there are no indications that this development that there is still a necessity for state subsidies has had a negative influence on the parties’ to the party organisations and the democratic handling of their core tasks or has been groups. As mentioned in Chapter 2 of this damaging to the democracy. Proposition, the Ministry, in drawing up the From what the Ministry can see, there are Committee’s mandate, has assumed that the no reasons to assert that parties in a position of system of state subsidies to political parties power, and with the aid of the state subsidy shall be continued in one form or another. The system, have created establishment obstacles nominal growth in appropriations through or given themselves preferential treatment in Chap. 1530 over the past approximately 35 competition. It follows from the Constitution years, has been considerable – from NOK 8 that the parties which at all times are million in the first year to just under NOK 270 represented in Parliament, approve the annual million in 2005. As the Committee has pointed Fiscal Budgets, including subsidies to the out, the real appropriations growth as well as political parties. There will be common the relative growth seen in relation to other advantages for the parties in increasing the equivalent budget chapters, has been large. subsidy levels in Chap. 1530 – especially item The Ministry is of the opinion that the 70 which will benefit most of the represented same arguments for state subsidies are as valid parties and/or subsidy rates for the today as when the arrangement was introduced Parliamentary groups. The fewer parties that in 1970. The Party Financing Committee are represented, the larger the theoretical which was set up on 16 February 1968, like the possibilities of being able to make present Democracy Financing Committee, appropriation decisions which especially referred to the core tasks assigned to the favour one’s own party. On the basis of the political parties in connection with our party-related composition which Parliament democratic system of government, when the has had recently and the appropriations majority proposed the introduction of a state decisions which have been made, the Ministry arrangement. In the Ministry’s evaluation these finds no grounds for such hypothesis. core tasks have proved to be very stable over As the Committee also points out, an time. In a Norwegian context, the tasks can increase in the governmental financing part of neither be said to have become fewer nor more the political parties can make the parties less numerous over time. The objections which the dependent on private contributions which Democracy Financing Committee raises again – individually – can be an advantage in against state financing of political parties, are that the possibilities for corruption or suspicion also very much the same as the Party of corruption are reduced. Reference is also Financing Committee raised. The most made to the Committee’s viewpoints in important objections are that state financing of connection with the discussion in para. 2.7 of political parties can create a dependency on the the Recommendation as to how far the so- state and that a political majority can have the called “cartel party hypothesis” is relevant to possibilities of giving itself preferential Norwegian conditions. treatment through a state system. The Ministry points out that the rules In the Ministry’s opinion the question of regarding the party subsidy system since its any increased dependency on the state in a introduction in 1970 has had independency as negative meaning, is primarily a question of a basic principle, inter alia by the the degree to which state financing can be establishment of an independent Board to thought to influence the political opinion in decide questions of assessment. The parties society, the parties’ ability and willingness to receiving the subsidies are not subject to focus political attention on important social conditions for payment nor controls regarding issues, recruitment of political leaders or on the use of the funds. Apart from the fact that other functions which the political parties the system was extended in the middle of the perform. Even though it seems clear that the 1970s with regard to recipients of subsidies, political parties seen from a financial point of the rules must otherwise be seen as having view have become more and more dependent been stable. The attitude of the Ministry has

consistently been that exercise of authority in limited itself to the parties which either are connection with the system is assigned to the represented in Parliament or which must independent Board. The Ministry assumes that be said to have a national organisation and the state subsidy system should continue to be which presents lists in all or almost all of such that the subsidies are provided without the election districts in a general election conditions or guidelines by the state to the (at present 7 parties). parties entitled to receive subsidies. Both in The Ministry of Wages and Prices order to ensure neutrality and to make the finds it reasonable that subsidies are also administration of the subsidy system more granted to the parties which meet these efficient, great emphasis should be laid on requirements and proposes that subsidies objective support criteria and rules which are also granted to the parties who provide limited space for the exercise of state presented lists (just party lists or common authority and discretion. lists) in at least half of the election districts In the mandate, the Ministry has requested at a general election.” the Committee to evaluate alternative financing arrangements for political parties. In the proposition text from 1970, no The Ministry shares the Committee’s opinion further definition was given of what a political that it would be a socially unfortunate party is, but here reference is made to that in development if the parties’ self-financing all 11 parties were registered in accordance degree were to be increased by increased with the criteria in Section 11 of the General business operations or administration of assets. Election Act then in force, and that seven of Such mixture of political and commercial these were entitled to subsidies according to interests could be thought to lead to a conflict the proposal. of roles and suspicion of misuse of authority. The Ministry is in agreement with the Reference is also made to the discussion in the Committee’s majority in that the justification next chapter regarding private financing of and reason for the state subsidy system is that political parties. the parties are assigned responsibility for certain core tasks which are an important Entitlement to subsidies assumption for the democratic system of The Ministry points out that the Committee’s government. Further, that such tasks are best majority is in favour of state subsidies being solved within the permanent, stable political reserved for parties that are registered organisations which work long-term – according to the rules in the Election Act. The separately on the basis of a common vision, proposal must be seen in connection with the ideology or a common basis of values for proposal regarding block transfers of developing society. The Ministry will therefore appropriations in Chapter 1530 item 72 not underestimate the important contribution Subsidies to municipal council groups and item which unregistered lists or groups make to the 74 Subsidies to county council groups in the Norwegian democracy by inter alia municipalities and counties respectively. contributing to diversity in the political debate, According to the proposal the group and including focusing on important individual representative subsidies shall be paid out of the cases – and not least through work in the municipal budgets and also benefit the municipal councils and county councils. The unregistered parties and lists. Ministry’s evaluation is that state subsidies The Ministry refers to the fact that the should be distributed so that they provide the assumption that the state party subsidies shall greatest possible social advantage. According go to the registered political parties has been a to the evaluation this will take place when the basic principle right from the introduction of subsidies are granted to organisations which the system. In Proposition to the Storting No. are assumed to carry out as many as possible 108 (1969-70) the then Ministry of Wages and of the actual core tasks in an efficient manner. Prices stated: As the Ministry sees it, stable and overall party organisations with a more or less established “The Ministry of Wages and Prices has organisational apparatus and a somewhat commented that the Party Financing larger geographical area of activity will Committee in its report on the political clearly stand out in this context. parties’ organisation and financing has

Further, the Ministry attaches weight to the - at least 4.0% support at the last necessity of having as clear and objective entry preceding municipal council criteria as possible for a state party financing election, or at least one representative system. The Ministry notes that there is elected. disagreement in the Committee as to whether or not the requirements for registration of new According to the proposal, the vote political parties are easy to meet for non- subsidies are granted to all registered political lists. The majority is of the opinion parties which receive vote(s) in one of the that the requirements are relatively modest, above-mentioned elections – nevertheless while the minority points out to that the with a lower limit for payment fixed on the existence of local lists in small municipalities (with less than 5 000 inhabitants) should also basis of administrative considerations. be seen in the light of the difficulty resulting The Ministry points out that a proposal to from the requirements in the Election Act for divide the state party subsidy into one subsidy registration of new political parties, and that it dependent on votes and one fixed component is impossible to meet the criteria in the was discussed in connection with the Election Act of support of 5 000 persons with introduction of the system, cf. Proposition to voting rights in a general election. the Storting No. 108 (1969-70) page 13. It was The Ministry points out that the criteria in pointed out here that parts of the parties’ costs the Election Act for what can be registered as a do not vary very much in relation to the size of political party or not, are given based on the parties, and that there could therefore be completely different considerations than which grounds to divide some of the amount equally political organisations shall be entitled to state between the parties and the rest proportionately support or not. The Ministry regards it as according to the number of votes held by the natural that a party subsidy system should parties – for example, in a proportion of 30/70. build on what at all times is the definition in The Ministry’s argument against this at that the Election Act of political parties and time was that otherwise contribute to protecting the considerations behind such limitation. “on the other hand it is clear that a The Ministry supports the proposal by the large party will necessarily have more majority in the Committee that government funds available to carry out its tasks subsidies in Chap. 1530 should be reserved for than a smaller party. Whether this parties which are registered in accordance with should indicate a proportionate division Chapter 5 of the Election Act. The Ministry, as of the whole of the subsidy according is the majority in the Committee, is in favour to the number of votes held by the of the unregistered groups or lists being parties will be a matter for evaluation.” granted an allowance for the work which is performed in the municipal councils and The result of the discussion was that the county councils – along the same lines as the system was established without such division, registered parties. Reference is also made to i.e. that the whole of the subsidy was divided the following paragraph. proportionately according to the number of votes, cf. also Recommendation to the Storting Division of the subsidies in basic subsidy No. 275 (1969-70). and vote subsidy The Ministry is of the opinion that the The Committee proposes that the state arguments which the Democracy Financing subsidies are divided into 1/10 basic subsidy Committee asserts are relevant with regard to and 9/10 vote subsidy respectively. The basic the fact that by fixing of a proportionate subsidy is granted to parties which have the number for division of basic subsidy and vote following support: subsidy, must especially take into account that - at least 2.5% support at the last the voters’ judgement shall have financial preceding general election, or consequences for the parties. If one disregards - at least 4.0% support at the last the group and representative subsidies, the preceding county council elections, present arrangement fully meets this through or at least one representative the rule: no votes, no subsidies – and that the elected, or

total subsidy amount is given in the form of a this Proposition no proposal is put forward fixed rate per vote. which will mean constraints on future years’ Rates have been proposed by some of the appropriation levels for the system. consultative bodies for basic subsidies of up to 20-25%. The Ministry is of the opinion that the Responsibility for democratic bodies election results should predominantly be The Committee proposes that the state decisive for a party’s relative share of the state subsidies to municipal and county bodies is subsidies – which speaks for not setting the included in the block grants to municipalities rate for the basic subsidy too high. On this and counties and that a provision is included in basis the Ministry supports the Committee’s the new Party Act which ensures that such proposal for splitting up the state subsidies, subsidies are given in a non-discriminative including the proposals for proportionate manner. The purpose is inter alia to create numbers, cf. Section 11-13 in the Bill. The greater equality between the subsidies to the proposal regarding splitting up the vote democratic groups on the local level and what subsidy and basic subsidy will to a certain at present applies to Parliamentary groups. degree contribute to even out the state In the consultative round, several have subsidies between the parties. given their support to this proposal, but there Concerning the administration of item 70, have also been strong objections to it. It seems this will entail marginal extra costs if several as though the fear is first and foremost that the parties fall under the system. With the proposal municipalities and counties will in the future of 2.5% used as the basis, the basic subsidy at use this part of the block transfers for present will all fall to the seven largest parties completely other purposes than supporting the which share the subsidy through this item. The political parties – and further, that political lists municipalities and counties pay subsidies at can be completely cut off from state party present from the first vote to registered subsidies as a result of the proposal. political parties. On a local and county level, The Ministry sees that weighty arguments deciding whether the limit for the basic can be made both for and against the proposal subsidy has been met or not, will entail a for block transfers of item 72 and item 74 in limited additional administrative task for Chap. 1530. While opposers of the proposal public authorities. have referred to the above-mentioned, the The Ministry points out that the subsidies supporters have argued that this is a natural through item 76 Subsidies to the political part of the municipal autonomy. parties’ central youth organisations are divided Section 10 (2) of the proposal Bill according to the same criteria that is applicable establishes a division of responsibility to the subsidies item 70. The Ministry proposes concerning subsidies to the various democratic that the subsidies to youth organisations are groups and that such subsidies shall be granted divided such that only the organisations where proportionately according to the election the parent party is entitled to the basic subsidy results. As the provision is worded, however, it according to item 70, will be entitled to cannot be interpreted as an obligation for the subsidies through item 76 – and that this individual county or municipality to support its subsidy is divided proportionately according to democratic groups. According to the the votes held by the parent party. The reason Committee’s proposal it will be up to the for the proposal is that the subsidy to the youth democratic body itself to determine the extent organisations at present is limited (NOK 5.7 of the subsidy. In principle, therefore, the million). Splitting up and fragmentation of the provision does not prevent the annual subsidy amount is expected to result in that the allocations being set at 0 in the individual social effect of the subsidy will be reduced. In municipality. However, the rule establishes practice this will mean that the subsidy through that if support is to be given, it shall be given item 76 will be divided according to the same according to set criteria. criteria as at present. Basically, therefore, it can be said that The Committee proposes an escalation there are grounds for a certain anxiety plan for the state party subsidy in paragraph (theoretically) that the group subsidy and 7.2 of the Recommendation, in accordance representative subsidy can lapse in some with a proposal of NOK 10 million for the municipalities and counties as a result of the coming year. The Ministry emphasises that in proposal, and that it is particularly the political

lists which will suffer because of it. However, continued from the current system in Chap. the Ministry points out that the Committee’s 1530, in the new Act . Regarding Chap. 1530 research indicates that the present municipal this entails that the nomination subsidies which subsidies are widespread on a national basis, are appropriated each year, will lapse. The and that there are no grounds to assert, for nomination subsidies are appropriated at example, that wealthy municipalities to a present based on a distribution key which in greater degree than less wealthy municipalities particular protects the smallest parties that choose to support their political parties. The receive subsidies through item 70 Subsidies to Ministry also believes that a certain amount of the parties’ central organisations. It will be up support to the groups will be an assumption for to Parliament, through the annual a democratic body to function – and that this appropriations, to decide what compensation would be a desired priority by the the parties shall receive for the lapse of municipalities and counties. In the Ministry’s subsidies for various publications and opinion there will regardless not be any nomination subsidies. question of fixing any minimum amount for group subsidies or representative subsidies in Change to unaltered subsidies during any Act or Regulation. the entire fiscal year After weighing up the various aspects of The Ministry points out that for items 70 and this matter, the Ministry has found that the 76, the result of the general election in relation considerations with regard to the municipal to the present practice will be in force from 1.1 autonomy should be attached greatest weight of the year after the election, to and including and for this reason supports the Committee’s 31.12. of the fourth year after the election. No proposal. changes are made in the distribution of the appropriations in the fourth quarter of the Financing of the youth organisations election year. The present practice is therefore The Ministry has no comments to make to the in line with the Committee’s proposal. Committee’s proposal that the subsidies to the Concerning support through the local items, youth organisations on the county level are the municipalities themselves undertake an appropriated in a separate item in the Fiscal audit of all payments to the parties in the Budget. The proposal is also in line with the fourth quarter on the basis of the unofficial viewpoints from the relatively few consultative statistics drawn up by the municipalities and bodies which have commented on it. The counties themselves after the last municipal Ministry assumes that the “group model” election and county election, but based on the applies to subsidies to the political parties – in same rates that applied (for three quarters) the sense that the state party subsidy system before the election – given by the Ministry in a does not influence the freedom of the parties’ Circular for the year in question. decision-making bodies in regard to the The Ministry sees that an arrangement internal bye-laws etc. to undertake where the same basic statistics are used for redistribution of the subsidies to the parties’ calculation of the annual subsidies during the various organisations or levels. full election period, can contribute to giving the parties a larger degree of financial Earmarked subsidies predictability. The Ministry therefore supports The Ministry does not have any objections in the Committee’s proposal that the local and principle or remarks to the Committee’s county party subsidy through Chap. 1530 is proposal that earmarked subsidies shall be reorganised so that the subsidies are distributed removed. However, the Ministry sees that on the basis of the results of the last preceding arguments can be put forward that such election including in the year before a new removal should be compensated with more election, as the practice already is for items 70 liberal rules for the system of basic subsidies. and 76. The Ministry points out that the None of the consultative bodies has Committee’s proposal on this point is not commented on this. directly relevant to the Proposition itself, but must be considered by Parliament in Simplification of the subsidy connection with the general financing arrangement conditions for the parties and what shall be

The Ministry is in favour of simplifying the administration of the state party subsidy arrangement beyond what the Committee has proposed. The Ministry proposes that all payments of the state subsidies through Chap. 1530 items 71 and 73, as well as the new budget item for the county youth organisations, in the future shall be undertaken by the state through the county governors. At present, the municipalities and counties pay the subsidies through items 71 and 73. The bills, authorised by the Office of the City Auditor, shall then be forwarded to the county governors for reimbursement from state funds. The proposal will entail a considerable simplification of the present arrangement in that the system for reimbursement will lapse. The municipalities and the counties will then have one state-required task less, and the proposal will therefore contribute to strengthening the municipalities’ autonomy. The county governors have at present, through the reimbursement arrangement, a certain administrative apparatus in connection to the state party subsidies arrangement. The Ministry assumes that there will not be a necessity for increased resources in the offices of the county governors as a result of the proposal.

6 Access for others to finance political parties and democratic groups

6.1 Current law into, participate actively in or give financial ______support of significance to a party or organisation which acts to the advantage of the Limitations in legislation enemy. Otherwise there are no rules in In Norway there are few limitations in Norwegian legislation that prohibits parties legislation concerning the parties’ possibilities from accepting gifts. of obtaining income from private sources. There are no limitations as to how much a Recommendations by the European party can receive in gifts or from whom the Council parties can receive gifts. An exception is the In the Recommendation by the European provision contained in Section 97a of the Penal Council regarding common rules against Code which prohibits representatives of corruption in the financing of political parties 1 political parties from accepting support from a and election campaigns it is recommended foreign power or from parties or organisations that states prohibit or regulate gifts from that act in the interests of a foreign power. certain donors. This concerns inter alia gifts Section 97 a of the Penal Code reads as from legal entities under the control of public follows: authorities, gifts from legal entities that deliver goods or services to any public administration “A Norwegian citizen or a person and gifts from foreign donors. domiciled in Norway who, from a foreign The Committee has evaluated these power or from a party or organisation recommendations in Chapter 6 of its acting in its interest, for him or herself or a recommendation. party or organisation in this country, In addition to the recommendation that the accepts financial support to influence the states prohibit or regulate gifts from certain 2 opinion of the general public regarding the donors, the European Council encourages the state’s system of government or foreign states to consider a prohibition against gifts of policy or for party purposes, or who is an over a certain amount at the same time as it accessory thereto, will be punished by recommends implementing measures which 3 detention or imprisonment for up to 2 prevent the possibility of evading such rules. years.” The purpose is to counteract that private individuals having large resources or larger This statutory provision was passed in 1950, enterprises and organisations purchase political partly on the background of experiences with influence. The European Council further Nazi Germany’s and the Soviet Union’s requests that the states consider measures to support to parties in other countries. The prevent unreasonable financing requirements purpose of the provision is to prevent foreign in political parties, i.e. by setting limits for 4 states, or those who act in the interests of a election campaign expenses. foreign state, from exercising influence over The European Council recommends that the opinion of the Norwegian people regarding measures are implemented to limit, regulate or the form of government and Norwegian prohibit parties from receiving gifts from politics. In one-party states where the division entities selling goods or services to the public between state and party is unclear, the prohibition will also concern contributions from the party organisation. On the other hand, 1 Rec(2003)4: The Recommendation by the European the prohibition does not apply to contributions Council on common rules against corruption in the which a sister party in a democratic state financing of political parties and election campaigns, makes to a Norwegian party. Articles 3, 4 and 7. Section 86, item 5, of the Penal Code 2 Rec(2003)4, Articles 3, 5 and 7. 3 establishes that it is punishable to found, enter Rec(2003)4, Article 3b. 4 Rec(2003)4, Article 9.

sector.5 This will prevent that parties in a complied with and not evaded. Under the same position of power are influenced to give assumption they can also contribute to even preferential treatment to suppliers to the public out inequalities in party competition by sector in various ways. reducing the financial significance of It is recommended that limitations or sympathisers with large financial resources. prohibitions be introduced against acceptance Another strategy can be to limit the parties’ by the parties of gifts from foreign donors.6 requirement for resources through provisions Such prohibitions are already found in several that set limits for how large amounts the countries. The purpose is to counteract parties can spend on election campaigns. undermining of national sovereignty as well as The Committee is nevertheless of the reducing the presence of complex transactions opinion that it is not appropriate for the across state borders. authorities to regulate this to too great a Further, the European Council degree, for example, by introducing recommends that legal entities under the prohibitions against donations or against control of the state or other public authorities donations of a certain amount. Experience, are prohibited from making gifts to political particularly from the US, indicates that the parties.7 This is to prevent that parties in a evasion possibilities are many and that they are position of government transfer – or are taken advantage of. For example, a prohibition suspected of transferring – public funds to their against accepting donations from certain types own organisations. Rules preventing secret of donors may be met with constructions to gifts are also recommended. which the wording of legislation does not Reference is made to Tables 4.3 and 4.4 on apply.8 The limitations on amounts can be pages 60 and 61 of the Committee’s evaded by the donation being made as key recommendation for an overview of the money, or by the donation being given in a international existence of such regulations. form that is not covered by the rules. The limitations on election campaign expenses can 6.2 Proposal by the Democracy be evaded by setting up front line organisations Financing Committee that hold their own election campaign without ______being encompassed by the rules that apply to the parties. Prohibitions and limitations can In order to avoid the parties getting into an stimulate evasion – both legal and illegal. This unfortunate dependency relationship with the will in its turn entail a requirement to tighten state, the Committee presents several proposals up the rules and thereby create further which could provide for parties being able to regulation. The result can be a detailed, accept gifts from private donors. The complicated and over-complex set of rules, at Committee has taken into consideration the the same time as the possibilities for having European Council’s Recommendation 2003/4. insight into the parties’ real lines of communication, is weakened. On donations, limitations on amounts, The Committee also points out that by prohibiting or setting limitations on donations limitations of election campaign from organisations and other donors, one expenses intervenes in the private autonomy and The Committee sees certain dangers in prescriptive freedom to support political donations to political parties – first and standpoints – financially or in other ways. The foremost in that parties can get into an possibility of organising themselves and to unfortunate dependency relationship with large work for their wishes for social development, donors. The Committee points out that rules on is an important democratic right – also for contributions and limitations on amounts can organisations and institutions. To prohibit set effective limits for the potential influence organisations / institutions giving gifts to some donors can have, if the rules are political parties will restrict their freedom to choose activities themselves which they think 5 Rec(2003)4, Article 5b. 6 Rec(2003)4, Article 7. 8 7 Rec(2003)4, Article 5c: ”States should prohibit legal This problem has been attempted avoided in the entities under the control of the state or of other public UK, by instead indicating who is entitled to donate, authorities from making donations to political parties.” so-called permissible donors.

contribute to fulfilling the organisation’s Files Act Committee is in favour of amending purpose. the Act relating to public procurement (Act of The Committee is not in favour of limiting 1999 No 16) to improve right of inspection, amounts for private donations or setting increase public confidence and prevent limitations on the parties’ use of money in corruption. The Committee supports such connection with election campaigns, cf. also development of the Act. Section 17 in the Committee’s proposal for the Norwegian legislation contains controls Act where the main rule is that private persons which have been passed with the aim of shall be allowed for to give gifts to political preventing corruption in connection with parties. The Committee assumes that supplies to the state. The Committee is of the transparency should be the primary weapon opinion that this must be taken into against corruption and against unacceptable consideration in connection with the European ties in the financing of the political parties. Council’s recommended controls in this area. The Committee assumes that the present state On prohibition against gifts/donations of the law is not contrary to the from certain donors recommendation on this point. Legal entities that supply goods/services to the The Committee emphasises that there is public administration reason to monitor the development in this area carefully. Right of inspection of gifts to parties The Committee sees that donations from larger at all organisational levels, as proposed by the suppliers to the public sector can constitute a Committee (cf. Chapter 7 below), will potential danger of corruption. Norway has a contribute to reveal the necessity for further large public sector and the state is an important controls in the future. customer for many activities. Donations from Reference is also made to a separate larger suppliers can weaken confidence both in comment from one of the Committee members the administration and the political system. who goes further on this point, cf. paragraph The Committee is not in favour of 6.4 in the recommendation. introducing a general prohibition of donations to political parties from legal entities that Legal entities under the control of public supply goods or services to the public authorities administration. Very many businesses supply The Committee recommends that a prohibition or will in the future make such supplies to is introduced against the parties accepting gifts various parts of the public administration. The from legal entities under the control of the state wording of such rules will raise various or other public authorities. problems – inter alia whether the rules shall The Committee assumes that a prohibition also apply to subcontractors for this type of or controls which directly apply to this type of business, whether the business which has legal entities, must possibly be introduced as a previously given donations shall be precluded part of the rules for the activities of these legal from making deliveries in the future, whether entities. Such rules do not belong in an Act the prohibition shall apply to donations to all which governs the political parties. In a Party registered political parties regardless of Act, the circumstances can be regulated representation or not, etc. through a general provision that prohibits the There are already rules in place in various parties to accept this type of gift. The sets of rules, i.e. Administration Act, Committee is of the opinion that such a rule Municipalities Act, Penal Code and the Act can be advantageously passed, since parties in relating to public procurement, which inter position must not be afforded the opportunity alia are intended to prevent corruption in of filling up their party funds with state funds relationships between parties and suppliers. If outside the ordinary support system. Reference the rules for disclosure of the parties’ income is made to the Committee’s interpretation of is extended to also include local levels, it will the European Council’s Recommendation on work in the same direction. The provisions this point in paragraph 6.4 in the report. regarding transparency will increase the The Committee has considered public possible of efficient enforcement of the support applied for and received by the parties remainder of the rules. In Official Norwegian for special projects which are carried out Report 2003:30 New Open Files Act the Open outside the parties’ regular activities. Such

support is not to be regarded as ordinary party By anonymous gifts the Committee means subsidies, and the parties should be able to gifts/donations where the donor does not make compete for such funds on the same lines as him/her/itself known to the party and where other players and on the same conditions. Any the party does not know who or where the prohibition against a certain type of activity donation comes from, cf. the Committee’s will appear as an unreasonable intervention in recommendation paragraph 6.5 The question of the parties’ autonomy and could in addition whether a donor who is known to the party weaken the involvement of the parties. The shall be entitled to be anonymous in the sense Committee is of the opinion that this type of of avoiding publicity about his/her/its person restrictions should not be introduced for the and about a gift, is discussed in paragraph parties’ activities. The Committee also 6.10.2 in the report (identification of donors assumes that such grants shall continue to be and limitations on amounts), cf. also Chapter 7 reported together with other income. below. The Committee points out that at present Gifts from foreign donors no express prohibition exists against accepting The Committee is of the opinion that a anonymous gifts. The European Council prohibition against accepting money from recommends that the states implement foreign donors should be statutory. The right to measures to prevent secret gifts. contribute support to Norwegian parties and As long as the party does not know where Norwegian politics should be reserved for the gift comes from, there will be no danger of players with a clear foundation in Norwegian corruption. The Committee is of the opinion society and which the Norwegian public has that from that viewpoint it does not appear to the assumptions to know. be problematic to open for anonymous The Committee is of the opinion that for donations. natural persons the assumption must be that the On the other hand, there are several donor must either be a Norwegian citizen or considerations which indicate that the party have the right to vote at a municipal council or should not avail itself of donations from county council election. Foreign citizens unknown donors. If the party does not know receive the right to vote in a local election after where the gift comes from, it will not know having lived in the country for three years. what interests support it and who it is making Scandinavian citizens have the right to vote in itself dependent on. This makes it impossible a local election from the time they notify to make sure that the funds do not derive from moving to Norway. tax evasion or are the proceeds of criminal acts Concerning legal entities, it is difficult to (money laundering). In the opinion of the draw any equivalently clear limit between who Committee, anonymous gifts have no place in is Norwegian and who is foreign. For the most a system based on transparency. However, part this will not cause doubt. In the cases such gifts take place seldom or never in reality, where there can be doubt, the Committee according to the Committee. anticipates that a concrete, discretionary The Committee recommends that political evaluation must be the basis. In the register of parties do not accept anonymous gifts. Any businesses, for example, a business having its gifts the sender of which is impossible to trace, head office in Norway, is Norwegian, while shall fall to the Treasury. This must be seen in other enterprises are foreign, cf. Section 1-2. the context of the Committee’s proposal that Section 6-50 of the Tax Act provides the up to NOK 30 000 at the national level, NOK statutory basis for tax exemption on certain 20 000 at the county level and NOK 10 000 at conditions for gifts to certain organisations, the municipal level can be donated without the companies, federations, foundations etc. donor disclosing his/her/its name in reporting having their seat in this country. In the opinion income, cf. Chapter 7 below. of the Committee it is natural to use the same criteria in the evaluation of which donors are to be regarded as being Norwegian and foreign Agreements in connection with respectively. individual donations The Committee refers to the proposal in Gifts from anonymous donors – anonymous Parliamentary Request No. 178 that the parties gifts shall make a “declaration that no oral or

written agreements are in existence between in general be difficult to show. The Committee the donor and political parties or its elected is of the opinion that it is not reasonable that representatives at any level, and that there is the parties shall make a declaration on not no agreement in existence which can be having entered into this type of agreement. In regarded as reciprocity or expectation of the cases where corruption occurs, it is reciprocity.” However, the request provides assumed that the Penal Code will apply. little guidance as to what type of agreements Nonetheless, the Committee is of the and connections one wishes to refer to. opinion that there are good reasons for The Committee points out that there are transparency and that public authorities should already provisions in the Penal Code regarding have the right of inspection of any agreements agreed corruption, etc. Further regulation is not entered into. On this basis the Committee regarded as necessary. proposes that arrangements are made for The Committee assumes that one has not transparency by requiring the parties to declare intended to order the parties to give a any agreements with donors – both political declaration that they have not committed and business. Concretely, this is proposed punishable corruption. Further, the Committee carried out by crossing off a separate column assumes that it is not the intention to limit the on the form for reporting of income. Those political parties’ possibilities of entering into a who request it shall be allowed to inspect the political co-operation with other social actors. agreements in question. It is proposed that The parties are autonomous entities which neither a control apparatus nor a complaints must be assumed to be entitled to enter into system be established to ensure compliance political agreements of a more or less with this obligation. The arrangement also politically binding nature. The Committee assumes that the agreement(s) are entered into assumes that most political co-operations are in writing. established on the basis of identical political interests, not on the background of financial necessity. The parties and the elected Income deduction for donations to representatives must therefore still have the political parties opportunity of entering into more or less The Committee has evaluated income binding political agreements – including with deduction for natural persons and legal entities co-operation partners who wish to contribute for donations to parties as a supplementary general financial support. It is not necessarily measure to increase the degree of self- so that every circumstance which does not fall financing, cf. paragraph 7.5 in the under the Penal Code will be regarded as Committee’s recommendation. acceptable. Rules on transparency will The starting point in the present rules is substantiate donors and provide the basis for that gifts and membership fees are not tax undertaking such evaluations. deductible. The exception to this is found inter The Committee interprets the alia in Section 6-50 of the Tax Act which Parliamentary Request such that the entitles the donor to a deduction in income for declaration will be an affirmation that concrete monetary gifts to companies, foundations, or individual donations have not influenced the federations having a certain activity. The choice of political standpoints. activities included are inter alia care and The Committee is of the opinion that no health promoting work for various groups, conditions should be set for gifts and that the children and youth work within for example, parties should bind themselves to their donors sports, religious or other philosophical by carrying out a certain type of politics. The activities, development aid/disaster aid and Committee can nevertheless not see how the culture conservation. Donations and type of declaration as proposed in the membership fees to the parties are not included Parliamentary Request, shall be able to in the exception. contribute to preventing such ties. The The Committee is of the opinion that proposal gives little guidance with regard to several objections can be raised against making what such declarations shall contain, gifts to the parties deductible. The tax-paying something which makes any verification very ability principle indicates that in the first difficult. Any connection between individual instance it is expenses for earned income that contributions and formulation of politics will should provide the basis for deduction in taxes.

Donations to the parties are private expenses the opinion that some circumstances which do not fall under this principle. The nevertheless require separate discussion: introduction of deduction for gifts to the In regard to Section 6-50 it is a parties will also break with a recommendation requirement that an organisation has its seat in by the Skauge Committee’s recommendation Norway and that it has national scope. The for a proposal to changes in the taxation Committee assumes that for political parties it system – that the taxation system should be is appropriate instead to set requirements that simplified through a reduction in the number the party is registered in the Register or of tax allowances.9 A third objection is that a Political Parties. On the basis of the deduction from income represents a hidden and requirements set to achieve and maintain indirect subsidising of the parties. This breaks registration, this is regarded as sufficient. It with the principle that support should be given will also be simpler than undertaking a openly through the Budget, so that the extent concrete evaluation of the individual parties’ and distribution of the subsidies is clear. A scope at all times. However, it must be up to fourth objection is that deduction from income the party itself to choose whether it wishes to can come into conflict with protection of fall under the arrangement and the controls that privacy in that information about the donor’s apply. It is assumed therefore that the parties, and recipient’s identity as well as the amount as other organisations, apply for administrative of the donation, is made publicly available approval, cf. Regulation relating to submission through the requirements of tax assessment of tax reports of gift to certain voluntary data. organisations Section 1. The Committee’s majority is nevertheless The Committee points out that ESA, the of the opinion that income deduction for EFTA-states surveillance body for the EEA donations to the parties should be introduced. agreement, has asserted that the requirement The arrangement will give citizens a stronger that the recipient organisations shall have their incitement to participate in the financing of seats in the Kingdom is in conflict with the party democracy. This will increase the EEA agreement. Norway is in a process with parties’ self-financing degree and make them ESA on this. The Committee assumes that an less dependent on public subsidies. The arrangement with income deduction for deductions will be of a limited amount. donations to political parties only affects According to Section 6-50 of the Tax Act a Norwegian parties. It is pointed out that the deduction is allowed for donations which are at Committee is in favour of prohibiting political least NOK 500 in the year the donation was parties accepting gifts from foreign donors, made. The maximum deduction is a total of inter alia based on recommendations contained NOK 6 000 annually. In the Fiscal Budget for in the European Council’s Recommendation 2005 it is proposed that the upper limit be on financing of political parties. increased to NOK 12 000. The Committee is of In the Regulation relating to submission of the opinion that the deduction from income for tax reports the organisation is obligated to donations to the parties will contribute to more report each donor of monetary gifts which are and smaller donations. Increased self-financing income in the income tax year. However, the through deductions from income will therefore obligation does not include anonymous donors. not lead to increased independence of special The Committee proposes that political parties private interests. be prohibited from accepting anonymous gifts. Political parties will possibly have to According to the Committee’s proposal, at the comply with the rules laid down for the same time, the name of donors will only be arrangement in Section 6-50 of the Tax Act published if the value of the gift exceeds and in the Regulation regarding supplementing certain amounts (NOK 30 000, NOK 20 000 and implementation etc. of the Tax Act of 26 and NOK 10 000 on the national, county and March 1999 No. 14 and the Regulation relating municipal levels respectively) – inter alia out submission of tax reports of gifts to certain of consideration for those who do not wish voluntary organisations. The Committee is of publicity regarding their connections with a political party. On this basis, the Committee is of the opinion is that an exception should be

made in the Regulation for political parties, so 9 Norwegian Official Report 2003:9 Tax Committee Recommendation to changes in the taxation system

that political parties only report donations to between the Trade Union Federation the tax authorities if the donor wishes it. (formerly the Norwegian Union of The majority of the Committee is therefore Municipal Employees) and the Labour in favour of the parties being entitled to Party and the professional political deductions in tax assessment according to the platform between NFTU and the Labour rules contained in Section 6-50 of the Tax Act. Party before the year’s municipal elections. CNBI is of the opinion that at 6.3 Viewpoints of the consultative present this constitutes a major problem in bodies relation to finding collective political ______solutions in Norway, inter alia concerning the public sector, pensions and tax. General on donations by private persons CNBI is of the opinion that the time In a letter of 11.2.05, the Confederation of has arrived for the whole of the political Norwegian Business and Industry (CNBI) gave environment in Norway to undertake a a comprehensive consultative statement on thorough review of the consequences donations from private persons to political that financial contributions by parties. A excerpt of the statement is given organisations to political parties have for below. Norwegian politics. CNBI will therefore In the letter, CNBI points out that the By letter to the political parties, and to the organisation up to and including 2004 gave National Federation of Trade Unions, put financial support to some political parties. This forward a proposal that the entire question arrangement has gradually been phased out of the financing of the political parties is from 2000 with full effect from this year taken up for evaluation on a broad basis, according to a decision made by the Executive and that the following proposal be Board of CNBI dated 25 September 2000: especially considered: - Introduction of limitations on how “CNBI’s Executive Board is of the opinion large amounts the parties can that the political parties should not be able receive from organisations to receive financial support from - Include various forms of benefits and organisations such as CNBI, the support in such evaluation, such as National Federation of Trade Unions work efforts, the fact that the (NFTU) and others. The Executive Board organisations “pay the bill” etc. therefore decides that support to the - The rules that ensure transparency political parties shall be phased out over a on financial support at all levels period of five years.” - Evaluate the necessity for increased public support to parties based on CNBI has subsequently pointed out, both the number of votes as a more to the National Federation of Trade Unions in democratic alternative.” Norway, the political parties and Democracy Financing Committee, that the financial CNBI is of the opinion that the Democracy transfers from organisations to political parties Financing Committee’s recommendation is bind Norwegian politics, which in the opinion lacking in relation to these problems. CNBI of CNBI is unfortunate. The Working points out that the Democracy Financing Committee of CNBI decided inter alia the Committee concludes that it is not very following on 9 September 2003: probable that party support from organisations results in substantial and long-term weakening “In the opinion of CNBI the large financial of democracy, and that the Committee further transfers from the National Federation of argues that research so far has not provided Trade Unions and associated unions to the strong grounds for saying that financial support Labour party also represents a transfer of from private persons is given to influence the policy, where the Labour Party is obligated parties to enter into political agreements. to let the organisation’s viewpoints CNBI further states: become their policy. This is clearly “Both the employer and employee expressed in the co-operation agreement organisations have been established to protect the interests of the members; and

not least financial interests. These CNBI mentions in its statement that the organisations must justify their use of organisation has forwarded a proposal to the resources for various purposes to their own National Federation, the parties and members, and prove that members’ funds Democracy Financing Committee that an are used in a manner which promotes their evaluation should be made of limitations in interests. We are therefore of the opinion how much support the parties can receive from that it clear that organisations give organisations. Another possibility could be that financial support to parties because this the public subsidies are reduced if the parties contributes to the organisation also having receive considerable support from other greater break-through with those receiving organisations. support. This impression is reinforced CNBI notes that the Committee has when co-operation agreements are entered evaluated such limitations, but that it has into or common political platforms are concluded that such controls from experience established between a party and employee have seen to lead to evasion, which can break organisations, as we have seen examples of down confidence. during recent years. CNBI further states: CNBI also has reservations regarding the Committee’s opinion when it states that “It is outside CNBI’s tasks to evaluate the organisations’ election contributions what limitations can be introduced. We are are “so small that the donors cannot expect nevertheless surprised that the Committee high returns in the form of extensive has not considered this more closely, and “political services”. we reject the Committee’s premise that The public debate on party support in one must not introduce limitations which Norway has for a large part been about from experience can be evaded because donations from the NFTU to the Labour party, this will result in loss of confidence. For its and from CNBI to the Conservatives and partly part, CNBI will point out that loss of also to the Christian Democrats. For example, confidence can arise just as much when CBNI’s support to the Conservatives alone the impression is given of ties between early in the 1990s was over NOK 6 million parties and organisations, and we wonder annually, which is not insignificant, either for why the possible loss of confidence for CNBI or the Conservatives. Equally, the those who consciously evade statutory support by NFTU to the Labour Party cannot provisions shall be the grounds for not be regarded as insignificant. introducing limitations which otherwise The Committee itself establishes that appear sensible. (Official Norwegian Report 2004:25 page 80) For this reason, CNBI is of the opinion “research documents a positive connection that the Ministry in the Bill must evaluate between election campaign funds and votes. the possible binding relations, or This means at increased income gives the party impression of binding relations, which higher expected voter support than it otherwise financial support from organisations to would have had”. parties can entail. Further, we are of the Given that high voter support is a clear aim opinion that limitations in the amount of for any party, and that the connection between support the parties can accept should be resources and votes is actually present, CNBI introduced, possibly by introducing that is in disagreement with the Committee when it considerable donations from organisation overlooks the fact that partly considerable etc. will entail reductions in public financial support from organisations to parties subsidies.” can represent a democratic problem. At the very least, party support, when such support is The Conservatives are of the opinion than an seen in relation to the fact that parties and open democracy is natural and correct and that organisations also enter into political no upper limit should be introduced for agreements, can be suited to create an donations from natural persons or enterprises. impression of ties between parties and Other consultative bodies have not organisations which is not fortunate.” commented on the Committee’s recommendation on this point. Limitations in party support

Prohibition against gifts from legal “The State should implement measures to entities supplying goods/services to limit, prohibit or in another manner strictly public administration regulate gifts to political parties from legal persons who supply goods or services to Hamar City and Rural List states: the public sector.” “At present there are provisions in force in the Administration Act, Local Government Act, Penal Code, and the Prohibition against gifts from foreign Act relating to Public Procurement which donors has the aim inter alia of preventing In a letter of 2.2.2005, the Ministry of Justice political parties in a position of power states the following: being influenced into giving preferential treatment to suppliers to the public sector. “In Section 7, subsection three, litra b, the Even though there is every reason to Committee proposes that it should be monitor the development closely, we feel prohibited for political parties to accept that the present legislation covers the gifts from legal entities that do not have recommendations that the European their head office or seat in this country. Council has presented in the matter. There The Ministry of Justice finds grounds is a problem if doubt is sown regarding to point out some objections to a general the independence of politicians or parties prohibition against accepting donations that receive gifts from a company. This is from foreign donors. The Committee’s applicable in particular when this company justification for a complete prohibition is supplies goods and services to the public limited to reference to the European sector.” Council’s recommendation and to the fact that the right to contribute “should be The Conservatives are in agreement that reserved for Norwegian actors with a clear no prohibition should be introduced against foundation in Norwegian reality, which the gifts to political parties from suppliers to the Norwegian public has assumptions to public sector, but supports the proposal for a know”. As the Committee itself points out prohibition against accepting gifts from legal (recommendation page 77), it must be entities under the control of the state or other acceptable to emphasise individual public authorities. political and historical traditions when Elverum Municipality states in a letter of legislative changes are evaluated in this 27.1.2005: area. We are not aware that gifts from foreign entities have constituted any “Gifts from a private company supplying democratic problem. The hesitation which to the public sector can easily be perceived may manifest itself is greatly helped by the as an attempt at bribery. The possibility of transparency regarding the donations. We gifts of this type can easily result in also refer to the fact that the Norwegian binding relations. It is naive to believe that state has contributed with funds to political such gifts cannot be used to influence movements in other countries. It can decision-makers.” therefore appear to be inconsistent that donations are prohibited in the other NFTU expresses strong doubts with regard direction, including from private players. to the proposal that there shall not be a We also refer to the discussions in Official prohibition against gifts to political parties Norwegian Report 1999:27 Freedom of from suppliers to the public sector, because speech should be allowed, page 147, cf. this can easily be perceived as bribes. NFTU Report to the Storting No. 26 (2003-2004) requests that a proposal be put forward which page 98 of the related provision in Section 10 prohibits this. 97 a of the Penal Code. The Norwegian Association of Local and Regional Authorities (NALRA) states in a letter of 31.1.2005: 10 The following quotation has been obtained from Official Norwegian Report 1999:27 ”Freedom of speech should be allowed”, page 147.

The Ministry of Justice further states in a prohibition against donations or gifts from its letter: foreign donors. None of the other consultative “Concerning legal entities, Section 17, bodies have commented on this proposal. subsection three is formulated such that a legal entity with its head office abroad Anonymous gifts must be regarded as “foreign”. From a In a letter of 27.1.2005, the Data Inspectorate pure company law point of view, this is not has stated the following regarding this: completely in line with the general development within the EU in the “In para. 2 of the provision a prohibition company law area, where the development is proposed against accepting support if the is in the direction that it is the company donor is not known (anonymous law of the country of registration , and not donations). The provision must be seen in the company law where the head office is conjunction with Sections 20 and 22 of the located, that initially defines the company. proposal where it will be seen that donors We therefore propose that a company is of support over a certain amount shall be defined as foreign when it is registered identified and declared separately. In abroad, and not when the head office is addition, information regarding the donor abroad. These company law points concerned shall be published (Section 22). naturally do not prevent connecting the The Data Inspectorate cannot support opportunity to accept support to companies such proposal, since we inter alia are of with the head office in this country, but it the opinion that the degree of exposure of would be better if the wording of the law private donors will be too great. did not thereby define the company as The Inspectorate is also critical to the “foreign”. introduction of a prohibition against anonymous contributions without further The Conservatives support the proposal for investigation of the extent and consequences of the problem. The necessity of amendments to the Act should be documented before measures are “Section 97a of the Penal Code addresses foreign implemented. influence over Norwegian public debates through There can be very legitimate reasons Norwegian intermediaries. Individually, this not apply to speech as such, but can apply to financial for private persons not disclosing their assumptions for effective participation in public names in a donor situation. That financial debates. support to political parties can be a private In the preparatory works (Proposition to the Odelsting matter, should be reflected in legislation. No. 79 1950) it is stated that it is a breach of the rules As long as it concerns support to a legal of the democratic game if the person who appears to the Norwegian public as a representative for activity, no rules should be introduced that Norwegian interests “secretly” accepts support from a are apt to cause needless suspicion of the foreign state. Support from sister parties in democratic donors and their motivation for donating countries is not punishable, but on the other hand, to a political party. support from parties in one-party states is, because The Data Inspectorate remarks that the state and party then are two aspects of the same matter. It is therefore not a bold assertion that the provision concept “anonymous” means that the referred especially to support from the Soviet Union person concerned cannot be identified etc. either directly or indirectly. We also Looking at the Norwegian state’s active financial interpret the proposal such that if the donor subsidies to inter alia opponents of the apartheid regime in South Africa, there seems to be an has given a bank account number, but no inconsistency when support in the other direction – to name, the party will be able to accept the Norwegian parties - is punishable.144. Open support to support, since the bank account number political activities should therefore not be punishable, indirectly will identify the donor. It is while hidden support will clearly be a problem. By Act assumed then that the donation does not of 1998/30 (relating to publication of parties’ income) a certain overview over the parties’ sources of income exceed the amounts stated in Section 20 of has been ensured. Section 97 of the Penal Code should the recommendation. therefore be amended to reflect that it is not the source If the legislator maintains the principle of the support that is decisive, but that the support is of prohibition against accepting hidden.” anonymous donations, the above-

mentioned circumstances should be contracting party is also a donor. This emphasised.” could entail that a local association that enters into an agreement with a local data The Conservatives support the proposal on company on supplies of particularly a prohibition against donations from adapted software will be obligated to anonymous donors. None of the other disclose it, if the data company has consultative bodies have commented on the previously supported the association with proposal NOK 10 000 or more. This will apply even though the agreement on supply of the Agreements in connection with the software is an ordinary business individual donation transaction. Such agreements could, The Ministry of Justice has the following according to the circumstances, contain comments to this: different forms of business secrets, and it can appear in principle unfortunate that “On pages 88-89 the Committee discusses anyone should be allowed to inspect them. whether the parties should be required to We are also somewhat uncertain about submit a declaration that certain types of whether there is any necessity for a rule as agreements do not exist, but concludes that proposed. If the agreement is entered into it would not be reasonable to impose such on “gift-like” premises, then according to obligation on the parties. On the other Section 19, third subsection this shall be hand the Committee concludes that the reported regardless and the donor thereby parties should be required to submit a identified.” declaration as to whether agreements, political or business, exist with a donor. If The Conservatives are of the opinion that the such agreement exists, anyone should be Committee’s recommendation on obligation to able to request inspection of it. disclose any business and political agreements It is difficult for the Ministry of Justice with donors in connection with reporting, and to see that it will necessarily be more thereby allow the general public inspection of reasonable to require the parties to disclose such agreements, should contribute to agreements that have been entered into preventing speculation that this takes place, than to require them to disclose that and throw light on the agreements that may agreements have not been entered into. If a possibly be in existence. party does not disclose this, for example, by omitting to cross off a column on an Income deduction for donations to income reporting form (cf. report page 89), political parties it would imply a declaration that no such The proposal for income deduction is agreements have been entered into. supported by the Conservatives, CNBI and the In our opinion it may also be asked Norwegian Shipowners’ Association. The whether the provision has been given an Labour Party, NFTU and Hamar City and unfortunately wide formulation. The Rural List are among those who oppose the Parliamentary Request refers to “() oral or proposal regarding income deduction. RV is in written agreements between the donor and principle against income deduction for political parties or their elected donations from private persons. Most of those representatives at any level, and that there who donate to parties they sympathise with, is no agreement which can be interpreted are not interested in gaining personal tax as reciprocity or expectations of advantages from this, but donating to an reciprocity.” As the Committee itself election campaign and party work. RV is of the points out, cf. page 88, the Parliamentary opinion that income deduction for Request gives little guidance with regard contributions will function as an unfortunate to what type of agreements one wishes to favouritism of parties with members and control. According to what we can see sympathisers having good financial resources. from Section 21, subsection two of the Elverum Municipality supports the proposal the provision will entail that a minority and is of the opinion that income party will be obligated to disclose any deduction for donations to political parties will agreement relationship where the other show favouritism to high-income groups:

report gifts to political parties if the donor “In reality, tax deduction will mean wishes it. increased state subsidies to the party. The Ministry of Finance remarks that a Thereby, the parties who recruit mostly deduction arrangement will not be from high-income groups will receive a compatible with a desire for anonymity for larger state subsidy than parties who the donor towards the tax authorities or the mainly recruit from low-income groups.” party receiving the gift. If a right to income deduction is granted, it is an assumption Hamar Municipality is of the opinion that that verification of whether the taxpayer private contributions must be regarded as a concerned has incurred the costs the valuable supplement to the state subsidies to taxpayer has declared to have had can be the parties, but should not be favoured through made. This means that the tax authorities tax exemptions, and points out several of the must have access to information regarding same viewpoints that Elverum Municipality amount, donor and recipient. This refers to in its statement. information should be readily available, South Trøndelag County is also against the which indicates that requirements must be proposal regarding income deduction. set regarding systems for reporting of gifts The Ministry of Finance states the received. According to the current following in a letter of 8.2.2005: arrangement with income deduction for gifts to certain voluntary organisations, the “The Committee asserts as an recipient must report the gifts in a argument against the right of deduction machine-readable form to the tax that information about the donor’s and authorities. Here will be stated information recipient’s identity, as well as the amount regarding the amount, donor and recipient. of the gift, is publicly available through The taxpayer who wishes to make use of requirements regarding tax assessment income deduction for a gift to a political data. The Ministry remarks that the tax party must therefore accept that the party authorities are subject to confidentiality reports the gift electronically to the with regard to the information mentioned, Directorate of Taxes.” cf. Section 3-13 of the Tax Act. The public tax lists will not contain information 6.4 Evaluations by the Ministry regarding gifts to political parties, cf. ______Section 8-8 of the Tax Act. The Ministry is in agreement that any Paramount considerations right to deduction will have to be The Ministry bases its evaluations on the implemented according to the rules measures recommended by the European applicable to gifts of money to voluntary Council in its Recommendation that the states organisations, cf. Section 6-50 of the Tax implement to counteract corruption in Act and that the parties registered in the connection with financing of political parties Register of Political Parties shall be and election campaigns. A translation of the included in the arrangement Recommendation is an Appendix to the If the parties are included in the Committee’s recommendation, cf. Appendix 1 income deduction arrangement according page 173. In that connection it is natural to use to Section 6-50 of the Tax Act, they will as a basis the rules already to be found in have a reporting obligation according to Norwegian legislation to counteract the Regulation dated 8 September 2000 disqualification, corruption and bribes of civil No. 901 regarding submission of a tax servants in positions of authority, including the declaration of gifts to certain voluntary Civil Servants Act, Administration Act and organisations. Section 2 of the Regulation Penal Code, etc. Further, evaluations must be lays down that a declaration shall be made carried out with regard to what relevance the for each donor of monetary gifts which are individual recommendation has for Norwegian made during the income tax year. The conditions – inter alia based on history and Committee proposes that an exemption is experience. The Ministry is of the opinion that granted from this provision for gifts to the authorities should adopt a wait-and-see political parties, so that the parties only attitude to some of the recommendations by

the European Council. By this is meant that on proportionate reduction in state subsidies. Such certain points one can omit to implement some a model could possibly contribute to a more recommendations now – and rather choose to even distribution of income between the parties wait and see the developments. The Ministry in that parties with large private donors points out that the Committee specifically received equivalently less public subsidies than recommends this in relation to any prohibition they would otherwise have had according to for political parties to accept gifts from private the election results.11 However, such model businesses or legal entities supplying services would be doubtful from several aspects – to the public sector. especially with regard to stimulating evasion of the rules in the form of under-reporting income and money contributions “under the table”. General on contributions from private The parties are different concerning size – donors measured according to number of votes, The Ministry sees the danger elements pointed members and finance. At the same time, some out by the Committee in connection with cost elements will be independent of the size of subsidies, gifts, donations, etc. from various the party. The effect of a “krone for krone” private donors to political parties with regard reduction in public subsidies will therefore be to the dependency relationship. However, the different – dependent on whether the party is Ministry is in agreement with the Committee small or big. An alternative variant of the in that it is not appropriate, and there are no model could be that a reduction is undertaken grounds, to over-regulate the legal area only for gifts over a certain value or that applicable to political parties. A set of rules reduction is determined based on the amount that are too rigid and complicated could put of the gift in a percentage of the parties’ total unnecessary obstacles in the way for the income, etc. parties to increase their self-financing ability, However, the Ministry cannot see that a create evasion possibilities, and make public model which entails one form or another of a right of inspection difficult. reduction in state subsidies will reduce the parties’ ties to larger, private donors. On the contrary, it can be asserted that such About the relationship between public arrangement will contribute to increasing the and private contributions parties’ dependence on private donors if receiving gifts is punished by a requirement for In the mandate, the Ministry requested the repayment of or reduction in state subsidies.12 Committee to report on alternative methods of The model will also contribute to weakening financing for political parties. The Ministry the parties’ will to increase the degree of self- perceives the Committee’s proposal to be that financing – which viewed separately will gifts from private donors, including the increase the dependency on state subsidies. proposal on income deduction, shall be in The administrative costs for the state for a co- addition to the public subsidy system. As the operation model are expected to be Ministry sees it, there is no intention of making considerable – inter alia because of the any arrangement for “co-ordination” of public necessity for an efficient control apparatus. and private contributions to political parties – The Ministry does not recommend such model. for example, according to the model of Another alternative could be a model national insurance and service pension where state subsidies were granted as a schemes. During the consultative rounds, the 11 Ministry has been requested to evaluate a In borderline cases where the value of private system whereby considerable contributions gifts exceeds public subsidies, the whole of the public subsidies will be withdrawn. from the individual organisation entail 12 reductions in public subsidies. The Ministry The party will therefore be more dependent on the private gift after the gift has been received and sees that a model for co-ordination between repayment to the public authorities has been private contributions and public subsidies to undertaken – in that the gift relatively viewed – political parties could be based on that the “weighs” more in the parties’ income basis than parties that have received private donations before the reduction – this will be the case in during a year, receive an equivalent or particular if a krone-for-krone deduction is given where the party in total is equal before and after.

percentage of what the party during one year The Ministry refers to the Data Inspectorate’s manages to obtain in the form of private enquiry regarding a further assessment of the contributions or other earnings – for example necessity of such prohibition. The Inspectorate at a rate of 50%13. This will contribute to also poses questions regarding how the concept stimulate the parties to improve their self- of anonymity shall be defined financing capabilities. However, it will In regard to the Committee’s viewpoints, increase the danger of the parties getting into a this type of gift very seldom occurs. The dependency relationship with larger, private Ministry would therefore believe that the donors and/or that the parties are involved in necessity for such prohibition taking into commercial activities which must be regarded account Norwegian conditions is not as unfortunate or unsuitable from a democratic particularly great – based on the current rules. point of view. By this, the state subsidy system However, the Ministry does not exclude will have the character of a bonus arrangement the fact that anonymous gifts can be an where large gift streams from the private sector alternative for some donors who do not wish to or own commercial activities become the be identified through the inspection system in reward criteria in preference to the parties’ the new Party Act or who are not interested in contributions to solving core tasks for any tax advantages by “openly” supporting democracy. political parties. Out of regard for the Such model will also entail budgetary democratic system, the Ministry, like the challenges. The necessity for subsidies will be Committee, is of the opinion that that it is variable and difficult to estimate (the estimate important that the parties know the identity of will have to be based on income accounts their sponsors. Further – that this consideration relatively far back in time) and this will not be must have greater weight attached to it than the compatible with the requirements in the consideration for the donor’s requirement for, Finance Regulation for realistic budgeting. The or right to, remain anonymous. The Ministry Ministry does not recommend that such model also sees that a proposal for prohibition against be introduced. anonymous gifts would prevent evasion of the The Ministry assumes in the following that inspection system which the Act ordinarily private contributions are regarded as an anticipates. Reference is also made to the addition to the state subsidy system (which European Council’s recommendation in Article was discussed in the previous Chapter), and 3 in the Recommendation on prevention of that no co-ordination of income is undertaken. secret gifts. The Ministry’s proposal entails that all Proposal in connection with the gifts where the donor is anonymous to the recommendations by the European party, shall fall to the Treasury. By Council “anonymous to the party” is meant here cases The Committee presents several proposals for where there are no indications of who the provisions in the new Party Act which are donor may be. In the cases where it will be assumed to correspond with the possible for the party to trace the donor i.e. by recommendations by the European Council. a bank account number, the gift will not be These are a prohibition against contributions regarded as anonymous. If the gift is under the from legal entities under the control of public legal limit for reporting, the party will in such authorities, a prohibition against gifts from cases be entitled to keep it and report it as foreign donors and a prohibition against gifts income. On the other hand, if the gift is over from anonymous donors. the legal free limit, the party will have the opportunity to contact the donor – who can Gifts from anonymous donors – “anonymous either be willing to be identified to the public gifts” through the reporting system, take the gift back, or let it fall to the Treasury.

Gifts to political parties from legal entities 13 The party receives NOK 50 in state subsidies for supplying goods or services to the public each NOK 100 in private contributions or by own administration. earnings. Reference is made to this model which The Ministry has evaluated the remarks that the Committee points out is practised in other countries. have been submitted in the matter very

carefully on this point, too, but supports the that there is transparency surrounding the Committee in that no prohibition should be donations. The Ministry assumes that introduced against contributions to political transparency in this context must both reflect parties from legal entities who deliver goods or the amount involved and the donor’s identity. services to the public administration. The Regarding gifts from foreign donors, the European Council’s recommendation in Article amount will probably be easily identified. Who 5 b) reads thus: in reality is behind this type of gift or the “The states should implement measures to motives could be very difficult to identify or limit, prohibit or in another manner strictly discover in the individual case. The Ministry is regulate gifts from legal entities who supply of the opinion that if gifts from foreign donors goods or services to any public are allowed, it will be impossible to identify administration”. the donors in the individual case with the In other words, the European Council goes requirements for identification which are far in order to limit this type of gift stream by regarded as necessary to fulfil the purpose of recommending a prohibition or (at the least) this Act. Also, in doubtful cases there will be a strict regulatory measures. The Ministry shares necessity for a control apparatus to verify the the Committee’s opinion that there is a information, which will break with the system delimitation problem here both with regard to otherwise used in this Act and which will be extent (suppliers of end products, costly. subcontractors, parent companies and On this basis, the Ministry supports the subsidiaries, associate companies, etc.), and a Committee’s proposal on prohibiting gifts time aspect. The Ministry assumes that the from foreign donors. The proposal is otherwise existing legislation will probably cover most of in accordance with the European Council’s the cases where gifts from this type of supplier recommendation in Article 7. must be regarded as bribes or in another way By “foreigner” the Ministry means persons can provide the basis for misuse of public who do not hold Norwegian citizenship. authority. Reference is made here inter alia to However, the prohibition does not prevent the Act relating to public procurement with donors who meet the criteria for the right to appurtenant Regulations. The Ministry is in vote at general elections and/or municipal or agreement with the Committee that one should county elections in accordance with Sections wait and see the occurrences and development 2-1 and 2-2 of the Election Act, giving support before considering a prohibition or further to political parties. Concerning legal entities, regulatory measures. The Ministry points out the foreign criteria is connected to companies that the extent of gifts from this type of or businesses which are registered abroad. supplier will appear in the income reporting by the parties – to the degree they exceed the proposed threshold values, cf. next Chapter. Agreements in connection with individual donations Gifts from foreign donors The Ministry refers to litra e) in the The Ministry refers to the statement by the Parliamentary Request No. 178 that the Ministry of Justice that the Committee’s amendment to the Act should entail that the proposal seems to be too restrictive, inter alia Act makes requirements that a declaration is with regard to the Norwegian state subsidies to enclosed with the parties’ annual accounts that political movements in other countries and there are no oral or written agreements in with reference to the related provision in existence between donors and political parties Section 97 a of the Penal Code. The Ministry or their elected representatives at any level and of Justice also refers to the discussions of this that there is no agreement which can be problem in Official Norwegian Report 1999:27 perceived as reciprocity or expectations of “Freedom of speech should be allowed, cf. reciprocity. quotations in the footnote above. The Ministry sees that there can be doubt The Ministry sees the considerations and with regard to how invasive the Committee facts to which the Ministry of Justice refers in considers such provision should be. its statement. A basic principle in the Agreements between donors and political argumentation for allowing gifts from foreign parties can quickly awaken associations of donors, beyond what is allowed at present, is corruption and misuse of authority. On the

other hand, there can also be agreements in compensation, agreements can be entered into combination with donations or gifts which which regulate the parties’ reciprocity to the must be regarded to be of a legal business donor or another contractual party. With such nature. Examples of this could be the case of a narrow delimitation, agreements of the latter housing rental contract where the lessor – as a category will not be subject to the reporting gift to a party organisation, sets the rental duty and right of inspection. amount under the market price, but where there The Ministry is therefore in favour of is still a requirement for a contract which information being declared in income reporting regulates the duration of the rental contract, of all agreements the party organisation has due dates for payment, terminations, etc. The entered into with any donors – both business passage “or expectations of reciprocity” can and other agreements. The Ministry sees that in also give rise to interpretation doubts. If it is practice this can be done by crossing off a the parties’ expectations that is meant here, the column – or possible in combination with a passage “ or experienced as binding to separate specification column in the annual reciprocate” would probably be more precise. reports. Further, the parties are obligated to With the formulations in the Parliamentary allow public inspection of such agreements Request No. 178, litra e), it is reasonable to upon request. Reference is made to Section 21 believe that what is meant is the expectations in the Bill. of the donor – which can hardly be regarded as relevant in this connection and for which the Income deduction for donations to party in no way can be assumed to give political parties declarations. The Ministry is of the opinion that a proposal The Ministry regards it as relevant to to open for income deduction for donations to balance the considerations regarding the political parties can contribute to strengthen parties’ rights in regard to private autonomy the parties’ self-financing ability. Income and right to contract, and on the other hand deduction could also contribute to that gifts to political orderliness and the general public’s political parties are spread among several need for knowledge of the ties between the donors and thus reduce the possibility of parties and donors which can have an influence dependence on some of the donors. The on the formulation of politics and voters’ Ministry therefore supports the proposal by the support. The Ministry is not in favour of the majority of the Committee on this point. Party Act intervening in ordinary contract law The proposal for income deduction for circumstances, to which the parties must be gifts to political parties by amendment of assumed to be subject. The Ministry is of the Section 6-50 of the Tax Act, does not directly opinion that the considerations that the affect the proposal for a new Party Act. The Committee has probably had in mind, have Government will revert to the proposal for already been sufficiently covered by legislation income deduction for gifts to political parties – including in the Penal Code and in connection with Proposition to the Storting Administration Act. No. 1 (2005-2006). The Ministry is of the opinion that there is a legitimate need for the general public to gain knowledge of agreements a political party enters into with one or more of its donors. Initially one could imagine that the right of inspection should be limited to agreements which concretely concern or deal with the donors’ support to the party – i.e. agreements where the amount is clearly presented, and that other agreements which the party may have entered into with the donor should not be included in the disclosure obligation or right of inspection. The Department is of the opinion that this will be too narrow a delimitation of the Act. In addition to agreements regarding circumstances which deal with financial

7 Publication of the accounts of political parties

7.1 Current law right of inspection and publicity regarding the ______parties’ finances. In Article 11 it is The present requirement for publication recommended that the states require political of income parties to keep correct books and accounts on a Pursuant to Section 1 of the Act of 22 May consolidated basis, i.e. to also include units 1998 No. 30, regarding publication of political directly or indirectly connected to a political parties’ income, all parties that are registered party. States should require that a political in accordance with Chapter 5 of the Election party’s accounts should give what gifts the Act and that have presented lists at the last party has received with a description of the general election, are obligated to submit annual nature and value of each gift (Article 12 a). accounts of the central organisation’s income. Regarding gifts over a certain value the donors The accounts shall contain information should be named in the accounts (Article 12 b). regarding the following types of income: 1. State subsidies to the party 2. Membership fees 7.3 The Committee’s proposal 3. Donations from private persons, lotteries (Parliamentary Request No. 178 of collections, etc. 13.12.2002) 4. Income from interest 5. Donations from institutions, organisations, The Ministry refers to the Bill contained in associations and societies, as well as from Recommendation to the Odelsting No. 28 foundations and securities (2002-2003) of 26.11.2002 from the Standing Committee on Family, Cultural and Information must also be provided regarding Administrative Affairs, which is the basis for whether the party’s central organisation has the Parliamentary Request No. 178 in the received donations which exceed NOK 20 000 matter. The Bill is quoted in Chapter 2 above. from the same named donor. In that case, the In the mandate the Ministry has requested the amount and name of the donor be declared. Committee to discuss the Bill. The accounts shall also state the total amount of anonymous donations and whether the amount of each individual anonymous amount 7.4 Proposal by the Democracy and whether the individual anonymous Financing Committee donation exceed NOK 20 000. The income accounts shall be presented for the period 1 Right of inspection as an instrument January to 31 December. The annual accounts The Committee assumes that as a main shall be forwarded to Parliament at the latest principle, Norwegian legislation shall still be six months after the end of the accounting open regarding the parties’ income - in line year. The reports are in principle available to with Norwegian and Scandinavian tradition. the general public. The Act does not provide Reference is made to paragraph 6.2 of the the statutory basis for sanctions of the parties Committee’s recommendation. that do not comply with the rules. In the Transparency can contribute to ensuring preparatory works it is assumed that the danger the parties’ independence and autonomy in of negative reporting in the media will be relation to any donors. With the right of sufficient for the parties to comply with the inspection and publicity surrounding income, rules. the parties will have to evaluate how far the financing decisions it makes will have a positive or negative effect on the election 7.2 Recommendation by the European results. That private donations are channelled Council into politics in a satisfactory manner will increase public confidence in the system. The recommendation by the European Council Thereby, it will be more legitimate for the (2003/4) recommends that the states ensure parties to also finance their activities through

private donations, which the Committee thinks Unregistered groups or lists is an important goal. The Committee is not in favour that the system The Committee is not in favour of the of income reporting shall be in force for local parties being subjected to a statutory obligation groups or lists. Many considerations can speak to keep complete accounts and to report their for the right of inspection of how local lists / expenses cf. paragraph 6.9 of the groups finance their activities, including the recommendation. In the opinion of the desire for transparency regarding everyone in Committee the extent of the right of inspection the political decision-making process. The must be adapted to that which is relevant and Committee is of the opinion that principle of value to public knowledge. Therefore, considerations indicate that fewer requirements practical and administrative consideration must should be made for groups that have chosen to be paid to the parties that are subject to the act independently. In addition, the Committee requirement. The Committee is in favour of points out that such arrangement will be increased publicity in that there shall be the difficult to practise, because unregistered lists right of inspection of the parties’ accounts, at are often of a time-limited duration and have the parties, if accounts exist. varying degrees of stable organisational The Committee attaches further weight to apparatus behind them through the election that the object of reporting and transparency period. The Committee’s proposal must be must be so precisely defined that no doubt can seen in connection with the proposal that arise as to what is included in the rules and unregistered groups or lists shall not be entitled what is not. Any conflicting issues and to state subsidies. disputes regarding whether the rules are The Committee is in favour of setting up a complied with or not, could lead to weakened system so that unregistered groups or lists can confidence. The Committee is in favour of the voluntarily report their income in the same party, when reporting income, declaring that it manner as the parties, cf. proposal for a has entered into business and/or political reporting system in paragraph 6.10 of the agreements with any of the donors. recommendation. In other respects, the Committee points out that the consideration of avoiding corruption Other entities linked to the party and other improper circumstances are also One consequence of the reporting duty being covered through the provisions contained in linked to the right to subsidies, is that other the Municipality Act and Administration Act more or less party-linked entities do not have a regarding competence and invalidity – and in reporting duty, even though they can be in the last instance the rules contained in the possession of relatively large financial Criminal Code regarding corruption and acts of sums. The Committee is of the opinion that influence. there are no grounds to require such The Committee has evaluated who should entities to submit an income report. If be included in the reporting duty. funds are transferred to the party, they will Levels in the party regardless appear in the party’s income The Committee is in agreement with the report. Committee that the scope of the Act should be extended to include the parties’ organisational Elected representatives levels at the county and municipal levels, cf. The Committee has also evaluated whether the the proposal in the Parliamentary Request No. elected representatives should be obligated to 178 above. The Committee is in favour of submit an income report of any gifts they linking the reporting duty to the right to receive in the capacity of being an elected subsidies – i.e. that all levels of the party representative. Members of Parliament have having the right to subsidies also have a duty established a voluntary arrangement where the to submit income accounts. According to the members are given an opportunity to flag ties, proposal, this duty will also include the parties’ offices held, gifts they have received, etc. The youth organisations – which could also prevent Committee sees that an alternative could be to circumvention of the rules in that gifts to the consider including provisions in the parties are channelled through the youth Municipality Act which require the organisations. municipalities to set up systems which can

contribute to transparency regarding the assets, equity and liabilities. The information elected representatives ties, along the same contained in the Notes shall, in accordance lines as the model adopted by Parliament for with Chapter 7 in the Accounting Act, contain members of Parliament. further specifications of individual items in the annual accounts. Basis for the parties’ reporting At present, the Accounting Act does not obligation contain any provisions which govern the aims The Committee is of the opinion that an contained in the Act relating to publication of important assumption for the rules regarding political parties’ income. The Accounting Act transparency to be able to function, is that is not formulated with the aim of disclosing systems are established that safeguard public sources of income for the accountable entities. right of inspection in an efficient manner. If the Accounting Act should be applied to The Committee has considered whether the safeguard a right of inspection of the political Accounting Act (Act of 17 July 1998 No. 56) parties’ income, the Committee is of the can be a suitable alternative to the present opinion that requirements must be established arrangement with a separate Act, but has for a separate Note apparatus (in the new Party concluded that this is not the case. (Reference Act or Accounting Act). is made to the Committee’s discussion in The requirements of the Accounting Act paragraph 6.9.2 in the recommendation). for specification of expenses (goods The Accounting Act establishes that all consumption, personnel and operating associations with assets worth over NOK 20 expenses, depreciation and interest) together million or more than 20 employees, have a with the Balance Sheet will be able to provide statutory obligation to maintain accounting information regarding the extent of the party’s records, cf. Section 1-2, item 10, of the financing and financial strength. However, it Accounting Act. At present it is only the will not provide any information on the party’s central organisation of the largest political political activity (including ties, possible parties that are affected by this, and which misuse of power), i.e. information of particular thereby are obligated to maintain accounting relevance or usefulness to the voters. To the records according to the Accounting Act. If the degree the reporting obligation for political Accounting Act is to be used as the basis for parties shall also include expenses, it could be transparency regarding the parties’ finances, it of interest to evaluate a separate Note will be necessary to require all levels of the apparatus also for expenses (cf. also the political parties to maintain accounting Committee’s discussion quoted below). records, independent of the value of assets and In the Regulation the non-financial number of employees. associations with a reporting duty, which fall The statutory obligation to maintain under the definition of small businesses, are accounting records in accordance with the exempt from the obligation to submit annual Accounting Act entails an annual obligation to accounts to the Register of Company prepare annual accounts and directors’ report Accounts. They shall instead be maintained by in accordance with the provisions contained in the company having the reporting obligation. the Accounting Act, cf. Section 3-1. The According to Section 8-1 of the Accounting annual accounts shall contain a Profit and Loss Act everyone has the right to familiarise Account, Balance Sheet and Notes, cf. Section themselves with the contents of the accounts of 3-21 Chapter 6 of the Accounting Act sets the company having the legal obligation to requirements for the content of the annual maintain accounts. By defining the parties as accounts. Of relevance to the ordinary small businesses in the eyes of the Accounting activities of the political parties are the Act, all local parties and county parties will be requirements that the annual accounts shall legally bound to maintain accounts, but not present information regarding the amount of obligated to submit them. income and expenses. According to Section 6- Pursuant to the Committee’s proposal, 2, the Balance Sheet shall have a layout plan of reporting of the accounts shall be a condition for an entitlement to state subsidies. If the

1 Accounting Act is used as a basis, the accounts Since most of the parties will be regarded as small must be sent to the municipality/county or businesses, cf. Section 1-6, there will be no obligation to prepare a Cash Flow Statement. alternatively The Brønnøysund Register Centre

for this requirement to be met. This would been focused on the parties’ income – because cause practical and legal problems. The it is the connection between the sources of municipalities and counties must check with income and the exercise of power which can The Brønnøysund Register Centre as to primarily give indications of unacceptable or whether the accounts have been submitted. illegal activities. The UN Convention on Entities that submit accounts to The Corruption (see further in paragraph 5.4 of the Brønnøysund Register Centre must be Committee’s recommendation) Article 7 No. 3 established as separate legal entities registered focuses on transparency regarding political in the Central Coordinating Register for Legal parties’ income. Entities – subject to requirements regarding The Committee discusses whether the updating of the information contained in the reporting duty in addition to income, should Register. There are no Norwegian rules for the also include expenses. Such duty is in evidence organisation of political parties. The parties are in some democracies, and then often with the very differently organised, including with basis in rules containing restrictions on the regard to what levels are separate legal entities. parties’ expenses – for example on maximum The obligation to maintain accounts according amounts in connection with election to the Accounting Act will entail that the campaigns or restrictions in the use of state parties are made subject to new, formal subsidies. requirements for organisation and in addition The Committee points out that the general sanctions in the form of fines for late development is moving towards a greater submission. degree of transparency. Based on the fact that The Committee is of the opinion that the the parties receive partly considerable state obligation to keep accounts according to the subsidies, it could be said that citizens should Accounting Act cannot be justified in have the right of inspection of how the parties democratic regard, and sees it as problematical administrate their funds. to intervene in the parties’ internal organisation The Committee is of the opinion that the through statutory requirements. For the local extent of the reporting obligation imposed on organisations in particular, the costs of keeping the parties must be carefully evaluated in accounts could quickly exceed the state regard to what the public has a need to inspect. subsidies. Reporting according to the As a starting point for the discussion the Accounting Act will entail a disproportionately Committee points out that many parties have extensive obligation for the local organisations. stipulated in their regulations the obligation to The advantage of a separate act for the keep accounts. However, this alone cannot parties is inter alia that there is more freedom justify a statutory obligation to submit with regard to tailoring what shall be reported accounts. by the party organisations. By mapping the The Committee has considered whether need for information, reporting of superfluous there are grounds to require the parties to set information will be avoided such as the case up a Profit and Loss Account and Balance can be through standardised systems intended Sheet, to include an overview of assets, for other purposes – as, for example, the liabilities and expenses – in addition to the Accounting Act. explanation of income, cf. paragraph 6.9.3 in On this basis the Committee is not in the Committee’s recommendation. The favour of political parties being subjected to Committee has discussed various models for the obligation to maintain accounts to a greater account plans, inter alia based on the voters’ degree than is applicable at present, but that requirements, as well as account plans which the parties’ separate reporting duty shall can be used in various research connections. continue to be governed by a separate Act. The Committee finds it difficult to take a decision as what type of information shall be On reporting of expenses in particular required and what degree of detail shall be The Committee points out that the current Act used. A superior overview with rough regarding publication of the income of the categories gives little detailed and hardly political parties orders the central organisations particularly relevant information to the voters. to report their income and income sources – One plan which is detailed enough to be not expenses. Right of inspection as a tool in interesting to the voters, can show the fight against corruption has traditionally circumstances which invite the intervention by

the authorities without a clear democratic is neither a requirement nor is it natural to justification. A dilemma can arise whereby establish any control or complaints systems in exaggerated requirements for information connection with the parties’ accounting. come into conflict with the principle regarding the parties’ autonomy. The Committee is of the opinion that an Further on what income shall be important, fundamental objection against a reported requirement for publication of expenses is that Monetary and non-monetary contributions this breaks with the tradition that the State does The Committee points out that practice not control, or in any way provide guidance for according to the present rules is that only the parties’ use of state subsidies. The regard monetary contributions are included in income for the parties’ independent position in relation accounting. In Parliamentary Request No. 178 to the State has been the most important it is proposed that also other forms of argument against such intervention. In contribution shall be entered as income. For Parliament’s assumptions for appropriations example, this can be free or very reasonably for party support it is also emphasised that no priced services from a printing company or a conditions shall be set, neither shall the state conference hotel, loans of vehicles, artistes perform controls of the use of the state who perform free of charge at election subsidies. Even though expense reporting will campaign arrangements, and a lot of other not be synonymous with the state providing things. guidance on the use of the party subsidies, Non-monetary contributions can have just such reporting in practice will invite controls. as great financial value as monetary The Committee finds it problematical to contributions. The Committee is therefore in justify a separate reporting obligation for agreement that there is no reason to continue expenses since such reporting can hardly be the dissimilar treatment in the present rules of regarded as having any significance for various forms of contribution, since this can circumstances related to the fight against easily lead to evasion of the principle that there corruption. Even though the state could have a shall be transparency regarding financial general interest in inspection, the principle of support. The rules must nevertheless be the parties’ independent position weighs formulated in a manner that makes them easy heaviest. On this basis the Committee is in to practice for the many small and large party favour of continuing the principle that the organisations which will be covered by them. reporting obligation for political parties shall The Committee is in favour that limitations are only be for income. set both with regard to the type and value of non-monetary contributions. The Committee points out that there is a The obligation to allow inspection of the reporting obligation for monetary and non- accounts as they stand monetary contributions according to both The Committee states that many parties at Danish and Finnish rules. This is also the present keep accounts in accordance with their recommendation by the European Council.2 In bye-laws – it is assumed that this concerns Denmark, emphasis has been laid in most of the parties. The Committee is in favour delimitation on whether non-monetary of all parties or party organisations that are contributions consist of payment which is entitled to state subsidies in accordance with usually made in money. For example, the Party Act being under an obligation to contributions or payments made by a donor allow inspection of their accounts as they who is normally paid for this type of stand. The Committee assumes that the right of performance as a link in earning activity (or inspection should concern the accounting contribution in another manner can be said to documentation which is presented to the replace an amount of money), could be association’s highest authority (annual general considered as a donation in the eyes of the law. meeting etc.). According to the proposal the The donation must in that case be included in Act will not impose any obligations on the the accounts at a value equivalent to what the party with regard to keeping accounts, but only party should otherwise have had to pay for the to allow inspection of the accounts such as they stand. The Committee assumes that there 2 Rec(2003)4 Art. 2

contribution. Personal efforts by members and NOK 20 000 at the county level, and NOK acquaintances that are carried out voluntarily 10 000 at the municipal level (cf. paragraph and unpaid – as for example traditional 6.10.2 in the Committee’s recommendation voluntary group work – are on the contrary not and the following paragraph). regarded as contributions. The same applies to loan of premises and objects as long as it is not Identification of donors – limit for a part of the lender’s occupational activity.3 In payment its rules, Finland has made an express The Committee points out that the Act relating delimitation of this type of contribution by to publication of political parties’ income exempting “customary voluntary work and requires that the donor shall be identified in the customary services free of charge” from the income accounting if they have made a 4 reporting obligation. donation of NOK 20 000 or above. The limit The Committee is of the opinion that this was set according to the model in the Danish should be a starting point for an equivalent Act and has not been adjusted since the Act Norwegian rule. In the Bill on what income is came into force and effect in 1998. In the reportable (Section 19 (3) in the Committee’s Parliamentary Request No. 178 it is assumed recommendation), the Committee has therefore that this limit will be upheld and also applied exempted donations from private persons to donations to parties at the local and regional which consist of ordinary voluntary group level. work which does not require particular The Committee is of the opinion that the qualifications. An exemption is also included following argumentation can be asserted for loan of objects and premises by private against publication of names of donors: persons if those concerned do not usually loan - there is no requirement for publication in these out against payment. For example, the event of gifts to other types of according to this, artistes who perform free of associations charge, employees having a full or partial - a gift is an expression of political position connected to party-political work must sympathy and is a personal relationship on be entered into the parties’ accounts for the lines of a voting slip. It must be income. accepted that gifts are given or donations The Committee points out that the are made without it being publicly known Committee in the Parliamentary Request No. - gifts to political parties can create 178 proposes that an explanation shall be given conflicts, i.e. in relation to employers or of non-monetary donations which exceed the business connections, which are avoided if limit in value for when donors shall be no publicity is given identified in the income accounts. The - it must be possible to give for altruism and Committee is in agreement that this is an not draw attention to his or her own person appropriate delimitation. The same - the joy of giving can diminish and the considerations apply to both monetary and parties’ financial situation can be more non-monetary donations. Accounting should difficult if names of donors are published. not give rise to doubt and difficult balancing. The point of a transparent regime is to reveal To this the Committee remarks that the parties in which direction ties can exist or arise are not well comparable with other between party and donor. According to the associations. The parties are in a special Committee’s proposal the limit for when the position in that they are a part of the power reporting obligation arises should be extended apparatus and the democratic decision chain. to NOK 30 000 on the national level and set at Corruption in the political system is therefore very serious. In Chapter 5 in its recommendation the Committee has concluded 3 2000-01-L 171 (as set forth): Proposal for that the European Convention on Human amendment of an Act relating to private donations Rights (ECHR) gives no protection for to political parties and publication of political anonymous gifts to political parties.5 The parties’ accounts. (Punishment for incorrect larger the gift, the less it will have the nature of information in party accounts). 4 Cf. Act relating to reporting of representatives’ being a private matter. election financing 12.5.2000/414 Section 3 No. 4, subsection two. 5 ECHR, Article 8

The following arguments can be asserted collective evaluation the Committee has for publication of the names of donors: concluded that the limit of the amount should - voters otherwise miss out on valuable be set at NOK 20 000 at county level and NOK information on what interests support the 10 000 on the municipal level. party When one or more contributions from the - secrecy provides a breeding ground for same donor amounts to NOK 30 000 or above, speculation and suspicion of any at the national level, NOK 20 000 or above at corruption the county level and NOK 10 000 at the - secrecy paves the way for corruption municipal level during the accounting period, the Committee proposes that the donor shall be The Committee assumes that the names of identified and the amount donated declared. donors of gifts over a certain value shall be Formally viewed, the rule does not prevent the published. The Committee’s proposal for limits same donor, without being identified, making is based on weighing up of the consideration other gifts to several different entities in the that gifts to political parties shall be legitimate organisation which collectively exceed the and desirable, and the consideration that the limit of the amount. That is not the intention donor shall be able to remain anonymous to the behind the Committee’s proposal. However, public. The Committee sees it in connection the Committee is of the opinion that the with the fact that there is a necessity to raise parties’ centrally cannot be required to the limit for gifts to the parties’ central undertake co-ordination of the income organisations on the background of the wages calculation with the aim of revealing such and prices increase which has taken place since evasions. the Act was passed. In the Committee’s The Committee assumes that it is opinion, the present amount of NOK 20 000 is appropriate that private donors are identified insufficient to support the consideration that by name and municipality of residence. Legal the donor shall be protected from the general entities such as businesses, organisations, etc. public. An upwards adjustment of the limit will are proposed identified both by name and also contribute to increasing the parties’ postal address. capability of obtaining funds from other The Committee is in favour of the limits sources than the state and thereby contribute to contained in the Act being updated in strengthen the parties’ autonomy. On the other accordance with wages and prices increases – hand, consideration must be paid to the according to a proposal by the Board which the public’s right of inspection. Committee proposes established for On this basis, the Committee is in favour administration of reporting etc. cf. Chapter 8 of raising the limit to NOK 30 000 for gifts below. donated to the parties’ central organisations (national level). The amount limit applies to Categorising of incomes the total of gifts from the same donor during In the Parliamentary Request No. 178 certain the income year. Reference is also made to the specifications are proposed in the categories of further justification for this proposal in incomes and donors which shall be declared. paragraph 6.10.2 in the recommendation. The Committee is in agreement with these The Committee is of the opinion that proposals, but is of the opinion that the somewhat different evaluations must be used requirements for specification of the sources of as a basis for where the limit must be drawn – income should be made more stringent. according to whether the gift is made to the The Committee is in favour of the income party at a national, county or municipal level. being divided into three main categories. The Practical considerations can speak for a first category is public subsidies. Here the common limit for all amounts. With a limit of party shall declare the state subsidies – NOK 30 000, however, many local and including any municipal or county party regional parties will not need to identify support as well as other public financial donors, even if they – on a local political scale support, i.e. state subsidies in the form of – can be behind considerable contributions. earmarked subsidies. The second category is The effect of extending the scope of the Act to income from own activities. This includes also include the regional and local levels will income from membership fees, lotteries, in this regard also have a limited effect. After a collection actions etc. capital income, income

from business activities and other income. The Reporting in connection with elections third category is income from others. This The Committee points out that the proposed category is divided into contributions from reporting system (para. 6.10.5) in the private persons and commercial enterprises recommendation will mean that there will be a respectively. Industrial organisations are set up time lapse from the time income is received as a separate item, while other organisations, until it reported and publicised. According to associations and groups, institutions, the proposal, publication of the parties’ reports foundations and funds form one common item. will be for the previous year’s income for the Finally, there is a column for other. The last parties. Thereby, voters will not know about category is internal transfers. Here, according contributions made during the period before an to the proposal, the party shall declare income election, before the following year. The which has been transferred from other party Committee points out that the UK and the US levels. have arrangements which impose a separate obligation on the parties to report and update Formal requirements (signature, income data before elections. auditor, deadlines, etc.) The Committee has therefore evaluated The Committee proposes to retain the whether parties should have an obligation provision in the current Act that a declaration imposed for separate reporting before elections shall be made that the party has not had any and how such arrangements could be other income than that stated. Further, the anticipated to function. declaration by the parties central organisation The Committee assumes that it will be shall be signed by the party leader and be larger contributions (which the party level in approved by an auditor. In order to avoid relation to the rules otherwise are obligated to exaggerated bureaucracy and costs involved report) which are of particular interest before with extending the scope of the Act, the an election. Reference is made to the limit of Committee proposes that no auditor approval amounts for reporting which the Committee shall be required for reports at the municipal has also proposed (cf. above in this Chapter), and county level. Those who apply for and are for the various party levels. To begin with, entitled to receipt for payment of party support therefore, an arrangement could be made for (as a rule this is the local party leader), separate reporting of such contributions before according to the proposal also sign the income an election – for example during the period report. In addition, there are requirements for from 1 January to 15 August in the election signature by another member of the Board. year. All parties entitled to subsidies in all As now, reporting shall include all income municipalities and counties should be included for the period 1 January to 31 December and in the arrangement – including the parties’ be submitted by 1 July the following year. The central organisation and subsidy-entitled youth parties’ central bodies and youth organisations organisations. The Committee nevertheless at a national level shall report directly to the assumes that this will concern a relatively central register, while local reporting shall take small number of party levels on a national place to the municipality and county basis. Reporting can take place in accordance respectively. The municipality and county shall with the routines which are otherwise proposed forward the income reports to Statistics for the arrangement. Norway (SSB), as this is the body the The Committee also points out that even Committee proposes shall be responsible for though the general obligation regarding preparing and publicising income accounts. reporting is not before 1 July in the following SSB publishes the accounts as soon as year, this does not prevent the parties possible. The Committee is of the opinion that publicising the names of donors earlier – such system is in line with the European which can be advantageous for the party. Council’s recommendation that the accounts The Committee sees that there is much that shall be reported and publicised at least once can point to an arrangement for reporting of per year.6 Reference is also made to Chapter 8 gifts in connection with an election. On the below regarding models for administration of other hand, the Committee is of the opinion the arrangement. that such system can entail that donations and donors receive disproportionately much 6 Rec(2003)4 Article 13 attention at the expense of what the election

should be about – namely the parties’ The Committee points out that the present Act programmes and content of the politics. An provides no statutory basis for reactions or objection to this can be that information sanctions of parties that do not comply with the regarding from whom the party receives gifts obligation to report their income. Neither does can also be relevant for voter decisions. lack of compliance have any consequences for The Committee sees that an alternative to payment of party support. obligatory reporting can be a voluntary The Committee is in favour of making the reporting arrangement for the parties desiring requirements more stringent in that reporting transparency and legitimacy surrounding income in the future shall be a condition for contributions received. The Committee payment of party support. According to the assumes that the parties can gain much from proposal, municipalities and counties shall not transparency regarding donations they receive carry out any practical controls of the content during the period before the election. of the reports at party level, but ensure that the The majority of the Committee is in favour requirements laid down in the Act for reporting of no arrangement being made for separate are met. The Committee proposes that reporting of private donations during the subsidies shall be withheld and not paid before period before an election. The reason for this is satisfactory reports have been submitted. If the that such arrangement can attract attention party is of the opinion that state subsidies are which could deter individuals from making unfairly withheld, the decision can be appealed financial contributions. The parties will also be to the Board which according to the proposal free to inform the public voluntarily about shall oversee the arrangement (reference is donations they receive before an election. made to further discussion of this in paragraph Reference is also made to the minority’s 6.12 in the recommendation and Chapter 8 remarks in paragraph 6.10 of the below). recommendation. The Committee has evaluated whether other types of reactions shall be introduced in Relationship to the Personal Data Act addition. The Committee points out that in The Committee points out that Section 2 No. 8 Denmark in 2000 a penal provision was of the Personal Data Act lays down that included in the Act which establishes that information about anyone’s political opinions incorrect or incomplete accounts from the is sensitive personal information. Pursuant to parties’ central organisation can be punished Section 9 No. 1, b, registration of sensitive by fines or imprisonment for up to four information cannot take place without a months. Criminal liability applies to both the statutory basis for doing so. Pursuant to the parties’ management personnel and the parties’ remarks to Section 2, No. 8 in Proposition to central organisations. Regarding the parties’ the Odelsting No. 92 (1998-1999) On the Act local organisations, there is a requirement that relating to handling personal information the accounts are reported before they become (Personal Data Act) the expression “political” entitled to state subsidies – and beyond this also includes opinions and viewpoints beyond there is no access to punish. Finland has no just belonging to a political party. In the sanctions. Up to now, Sweden has not had a opinion of the Committee it is obvious to statutory obligation for the parties to report assume that registration of who has made gifts their income. Here the introduction of an to political parties will fall under this arrangement is being considered where provision. The Data Inspectorate supports such reported income will be a condition to being interpretation of the Act in a letter to the paid state subsidies, cf. SOU (Official Swedish Committee dated 22 September 2004. Report) 204:22 Right of inspection by the The Committee assumes that collection, general public of parties’ and election registration and publication of this type of candidates’ income – where it is also information requires a separate statutory basis mentioned that the introduction of formal and proposes that this is included in the Party sanctions towards the political parties will Act. In all other respects, the Personal Data require a change in the Constitution. Act will apply. The Committee points out that an extension of the scope of the Act will entail that a large number of entities will have a new Violations – sanctions obligation imposed. The Committee does not

ignore the fact that a penal provision could be reporting obligation to also include the party perceived as a disproportionate measure which organisations at the municipal and county level will awaken reactions. In addition it will as well as the youth organisations that are require administrative resources to monitor and entitled to receive public subsidies. follow up violations. On the basis of the fact Rød Valgallianse (RV) states the following that the local organisations vary, it can in in a letter of 31.1.2005: addition be difficult to decide who shall be held liable. “RV has a positive standpoint to more The Committee points out that the requirements for transparency being set as proposed system is based on confidence and regards private donations to the political that it must be expected that the parties follow parties centrally, locally and to the youth up the system loyally. The Committee assumes organisations. With the new rules that have that a condition that reporting must be been proposed for reporting it will be a accomplished before subsidies are paid - and little more difficult for financially strong in addition the negative attention the party groups to pressure Norwegian parties to must expect if irregularities are discovered, take a certain standpoint.” will lead to the parties keeping within the ramifications of the law. South Trøndelag County is of the opinion that greater transparency surrounding the financing of the parties is decisive for confidence in our political system. 7.5 The view of the consultative bodies ______“The proposals in the report will give the population sight of where the parties get Right of inspection as a tool their income from, and thereby contribute CNBI is of the opinion that it is of great to the necessary transparency and protect significance for confidence in the political against unfortunate connections between system and in the parties, that there must be a the parties and other actors.” great degree of transparency regarding financial contributions to the parties. CNBI Grong Municipality is of the opinion that the therefore wholeheartedly supports the main Committee’s proposal provides possibilities for principle in the recommendation that there sufficient inspection and control over the must be full transparency regarding the parties’ financing of the parties and accounting control. income and emphasises the significance of the The parties’ local organisations are largely run existence of clear rules for reporting of non- by volunteers. The arrangements which appear monetary income and the obligation to declare unnecessarily labour-intensive should be agreements that have been entered into. avoided. An equivalent statement is made by NFTU supports the main principle the Centre Party’s central organisation. regarding the right of inspection of the parties’ Surnadal Municipality states that in line income and emphasises that it is important for with the Committee’s proposal, inspection of democracy that there is transparency with the use of the parties’ funds is important – both regard to the parties’ financial circumstances. locally, regionally and nationally. Oslo The parties are one of democracy’s most Municipality supports the Committee’s important cornerstones and NFTU is of the recommendation that the reporting obligation opinion that it is correct and important to have for the political parties’ income shall also be clear rules and guidelines for how the state’s extended to include the parties’ local responsibility for financing is accomplished organisations, county organisations, and youth and regulated. organisations when they receive state The Conservatives support the subsidies: Committee’s proposal regarding right of “The Municipality finds grounds, however, inspection of the parties’ income and to point out that increased right of emphasise that the reporting obligation shall inspection of the local parties’ financial only apply to income. The party is of the circumstances raises challenges in relation opinion that it would be natural, such as is to competence, which the Committee does proposed by the Committee, to extend the not seem to have addressed.”

Hamar Municipality is in agreement with the The Norwegian Association of Authorised principles concerning the parties’ accounting Accountants (NARF) states the following in a and reporting obligation. An important letter of 1.2.2005: assumption for the rules on transparency to work, is that systems are established which “In NARF’s opinion there is a range of ensure the public’s right of inspection in an general considerations that speak for efficient manner. greater transparency surrounding the Trondheim Municipality is of the opinion parties’ finances than is the case at present. that extended reporting is a positive measure. As the Committee itself writes it is in that The Municipalities are more uncertain with case an assumption that systems are regard to whether an extended reporting established which ensure public right of obligation will provide the voters with the inspection in an efficient manner, relevant information and result in confidence according to which different solutions are in the politicians and political institutions. The evaluated to make arrangements for this. In Municipality nevertheless regards the that connection we are of the opinion that transparency surrounding gifts and public ideally an arrangement should also be accounts as so central that the Committee’s made for a stricter general approach to the proposal is supported. Accounting Act’s general rules for the parties / party organisations which at present are not included in them, or – in Who the Act should apply to the event of continued special legislation – extended to include a reporting obligation The Pensioner Party is in agreement that there for expenses also. Having said that, we do, should be full transparency regarding the however, understand the objections / parties’ income and that a reporting obligation arguments which are outlined against this is introduced, and states in a letter of in the report. Based on a total evaluation it 20.1.2005: is therefore our opinion that the proposed solution, with the reporting obligation for “On this basis we are of the opinion that income according to special legislation, is also independent lists receiving public satisfactory for the purposes, and provided subsidies on the same lines as registered that the mentioned obligation is extended parties, shall have an obligation to report.” to also apply to the parties’ local organisations, county organisations and Hamar Municipality is of the opinion that youth organisation when they receive state transparency is important at all levels of the subsidies. For this standpoint it is also an parties’ organisations. The Municipality takes important additional element that a right of a positive standpoint to the extension of the inspection of the accounts of the parties reporting obligation to also include the parties’ entitled to subsidies is also proposed, as local, county and youth organisations. these accounts exist and are presented to Hamar City and Rural List is of the their highest agency.” opinion that independent groups and lists which meet the requirements for presenting Other consultative bodies have not commented lists at the Municipal Council and County on the relationship to the Accounting Act. Council should be treated identically where it concerns public financial support. If they meet On reporting of expenses in particular the criteria for state subsidies, the reporting Stord Municipality is of the opinion that it obligation should also include them. must be a condition for state subsidies for RV is of the opinion that a debate should political activities that accounts are kept that be held on whether elected representatives and include all income and expenses. The accounts employees’ representatives of the parties must be publicly available and be kept in a should be subject to a reporting obligation for manner which allows persons with normal gifts over a certain value. accounting knowledge to be able to understand the contents. The parties’ accounts should be available to public entities and the general Basis for the parties’ reporting obligation public (which in practice means the media) for

at least four years. An equivalent statement has spouse of a party member, who is a been made by Bomlø Municipality. qualified electrician, inspects the electrical installations of the party premises in Obligation to allow inspection of the connection with voluntary group work? accounts as they exist And what about the party member In a letter of 2.2.2005, the Ministry of Justice him/herself? Will they be considered commented on the Committee’s private persons in the eyes of the law?” recommendation as follows:

“The Committee proposes that the parties, Identification of donors - amount limits if they keep accounts in one form or The Conservatives and Hamar City and Rural another, shall be obligated to allow anyone List support the Committee’s proposal for to inspect them, cf. Section 23 of the rates. recommendation. We are in some doubt as Surnadal Municipality states in a letter of to whether such a rule is appropriate. As 26.2.2005: long as the parties in general are not subject to the rules contained in the “We are of the opinion that the proposal Accounting Act, there are grounds to regarding varying amount limits for believe that between the parties there can anonymous contributions – estimated be substantial differences in the quality NOK 30 000 to the central organisations, and extent of any existing accounts. NOK 20 000 to the County organisations Further, this will make it difficult for and NOK 10 000 to the local organisations outsiders to compare the different sets of is too high. The principle must be as much accounts. If the parties fear that inspection transparency as possible. In the event of could provide grounds for unfounded anonymous donors the limit should be criticism etc., it can entail that the party NOK 15 000 for all levels.” regards itself as better served by not keeping accounts, alternatively to keep less The Centre Party’s central organisation is detailed accounts etc. In that case it will be of the opinion that the proposals for the an unintentional consequence of an amount limits for anonymous contributions – inspection right as proposed.” NOK 30 000 to the central organisations, NOK 20 000 to the County organisations and NOK 10 000 to the local organisations – are high. Further regarding what income shall be One alternative will be that the limit of NOK reported – monetary and non-monetary 10 000 applies to all levels. An equivalent contributions statement was made by Grong Municipality. Oppland County is in agreement that non- Hamar City and Rural Lists supports the monetary gifts should be reported, as the principle regarding transparency, but feels that Committee proposes. Such gifts can entail the resources which must be used for reporting speculation it is important to avoid. can be demanding, particularly if one goes in The Conservatives are of the opinion that for limits that are too low. An alternative is also non-monetary contributions must fall that the parties themselves introduce under the reporting obligation, but that this transparency and enter such information must not affect the traditional voluntary group continuously on their home pages. work and services which are normally paid for The Ministry of Justice states the in money. following: NFTU is also in favour of non-monetary support being reported. “The Committee is in favour of private The Data Inspectorate is of the opinion that persons being identified by name and it is unclear which persons and which services municipality of residence. This is a stricter shall be included in the rules. The Inspectorate requirement that under the present Act. asks: Nevertheless, we raise the question of “ Does one do something illegal if the whether this is always sufficient, particularly in larger municipalities.”

The Data Inspectorate recommends that The Pensioner Party finds no grounds to the amount limit proposed in Section 20 of the deviate from the principle of a reporting Committee’s recommendation should rather obligation for private contributions before an have a reference to the Basic Amount, for election. The Party is of the opinion that an example. A change in the amount limit which exception from this obligation will undermine depends on one amendment process seems to the whole of the arrangement and is clearly not be unnecessarily resource-demanding. in line with the intention of increased transparency in this area. NALRA also supports the minority’s Reporting in connection with elections proposal and is of the opinion that the parties Many of the consultative bodies have made shall be subject to an extended and continuous comments to the recommendation on this reporting obligation in an election year. point. RV states: Oslo Municipality states the following in a letter of 28.1.2005: “RV is of the opinion that there should be a separate reporting obligation in “Oslo Municipality notes that the majority connection with an election year. As a rule of the Committee is not in favour of extra it is in connection with an election that reporting of the parties’ financing in an most private contributions and other election year. This means that when the support are received by the parties’ voters go to the polls, it is the financing of election campaigns, which are important to the parties for the previous year they have have noted. It is important to have information about. It is an important transparency surrounding these principle that voters know who has contributions before the election as far as provided the parties with financial support, possible so that voters are able to make an especially to the respective parties’ informed party choice, and so that the election campaigns, before they give their possibilities for corruption and vote. The Committee’s majority points out undemocratic political influence through that with extra reporting in connection financial power shall be less.” with an election, one can risk switching the focus from the election campaign to who The Centre Party is of the opinion that it finances the parties and away from the would be advantageous if the parties were political issues. This argument can also be ordered to publicise the current year’s income used in the opposite direction, namely the before 1 September in the election year, such speculation about who has supported the as is proposed by the minority. Grong various parties’ election campaigns tops Municipality is of the same opinion. the agenda in the election campaign. Oslo Trondheim Municipality wishes separate Municipality therefore supports the reporting in the election year and wants criteria Committee’s minority who think that the for this included in the Act. parties shall have an extended reporting The Conservatives support the obligation in an election year.” Committee’s proposal that it is not necessary to introduce an arrangement with separate Elverum Municipality also supports the reporting of private donations before the minority’s recommendation and states in a election, and states: letter of 27.1.2005: “In this connection, the Conservatives “Recently, work has been carried out point out that the Conservatives at their towards greater transparency concerning the own expense parallel with the Committee’s financial contributions to the political parties. presentation of their recommendation An exception will lead to a step backwards in notified that the Conservatives regardless relation to the desire for transparency. It is will introduce the practice of continuous difficult to understand why the election publication of contributions over the contributions shall be excepted from the desire amount limits laid down in the Act.” regarding greater transparency.”

Relationship to the Personal Data to Section 2, No. 8 of the Personal Data Act Act. If such information is publicised The Data Inspectorate states the following electronically, on the Internet or in another in a letter of 27.1.2005: manner, such as is presumed in Section 22 of the Proposition, the provision – inter “It is proposed that a central register be alia on the background of the case law established of the parties’ income and from the EU Court – should give a precise sources of income, and that they shall statutory basis for electronic presentation.” be publicised in an appropriate manner. Stord Municipality is of the opinion that The Data Inspectorate reminds that the Personal Data Act should not prevent the manner in which the information is information regarding private party financing publicised is central in relation to the being publicly available. Bomlø Municipality degree of exposure private donors will is of the same opinion. have. Presentation on home pages on RV states: the Internet is substantially different “RV emphasises that the desired from a publicly available overview transparency surrounding monetary gifts where those who wish it must which can influence the party or politicians specifically request it. must not lead to general mapping of an The Data Inspectorate therefore individual person’s political viewpoint or proposes that the Act is appended a sympathies. It is important that a free and passage stating that information from secret election is upheld, and thereby that the register can be released in response an individual person’s membership in one to specific enquiries. This must apply or other party is not the object for public in particular if the legislator is in registration, independent of whether the favour of private persons’ person is rich or poor. It is gifts which can contributions being publicised with overrule parties or politicians which shall identity. be registered and be publicly available, It is otherwise correct as the not people’s political sympathies. RV finds Committee points out (report pages grounds to mention this since state 100-101) that establishment by law of mapping of individual persons political a donor register will be sufficient sympathies has been so normal in grounds to treat sensitive personal Norway.” information cf. Section 9 of the Personal Data Act. The Personal Data Violations – sanctions Act, however, contains a range of other Trondheim Municipality is critical regarding provisions that are intended to protect enforcement of reporting data too strictly and the individual person’s privacy. That states the following in a letter of 1.2.2005: information regarding political opinions of the legislator is categorised “If the purpose of a new Act is inter alia to as sensitive personal information also put the parties in a position to solve their entails that particular care shall be core tasks, they must receive support for exercised in the treatment of such simple enforcement of reporting. It must information. The Inspectorate has not be left to the individual municipality to difficulty in seeing that this decide whether reporting fulfils the consideration can be harmonised with requirements of the Act.” the proposal for publication which appears in the provisions”. The Centre Party in Østfold regards as reasonable that requirements are made for The Ministry of Justice states: reporting from the previous year before a new payment is undertaken. “As the Committee states on p. 73, the Enebakk Municipality regards it as natural obvious assumption is that information that reporting is accomplished before payment regarding donors to political parties of subsidies is undertaken. will be regarded as sensitive according

Vestre Toten Left is of the opinion that proposal for amendment equivalent to the accounting reporting should be accomplished Parliamentary Request No. 178 should come before payment. into force from and including the accounting RV is initially positive towards a strict year 2003. enforcement of the general arrangement for The Ministry is of the opinion that public reporting of income, but there must inspection of the parties’ income will be nevertheless be an opportunity to apply for a preventive in relation to preventing corruption postponement for special reasons. RV is of the and other undermining of our system of opinion that it will be appropriate to advance government by financial transactions between the deadline for reporting of the parties’ private and political parties. In the Proposition income to 1 July (with forwarding of the Ministry therefore is in favour of extending KOSTRA figures by the municipalities by 15 the reporting obligation in relation to the June instead of 15 July) because of holidays in requirements in the existing Act. July and the danger of delays.

Who the Act should apply to 7.6 Evaluations by the Ministry The Committee proposes that the obligation to ______allow inspection is linked to the entitlement to receive state subsidies, i.e. so that the Act will Inspection as a tool apply to all political parties registered in The Ministry points out that increased accordance with Chapter 5 of the Election Act. inspection, in addition to the financing According to the proposal unregistered groups question, is the most important foundation or lists will not be entitled to receive state consideration in the work with this legislation. subsidies and will therefore not be included in The wish for increased inspection of political the Act. However, it is proposed that the parties’ and elected representatives’ financial reporting system includes the opportunity to circumstances has over time become voluntarily report them. widespread internationally, which in a Further, the Committee proposes that the European context is expressed inter alia law shall apply to all organisational levels of through the European Council’s the party – at the national level (as at present), Recommendation 2003/4 on common rules county and municipal levels, including the against corruption in the financing of political parties’ youth organisations at the two first- parties and election campaigns, cf. Appendix I mentioned levels. This is in accordance with in the Committee’s recommendation. In the the Committee’s Bill, litra a). In Article 6, the statement by the Council of Ministers dated 8 European Council goes somewhat further than April 2003 the Council says inter alia that the this by recommending that rules (including Council is convinced that corruption poses a inspection rules, cf. Article 11) regarding gifts serious threat to the constitutional state, to political parties in concrete cases should democracy and human rights and to equality also apply to entities which are directly or and social justice, and that it prevents financial indirectly connected to a political party or in development, threatens the stability of another manner controlled by a political party. democratic institutions and undermines The Committee also points out that one society’s moral foundations. consequence of the proposal to link the In Norway there has also recently been a obligation to allow inspection to the public debate regarding financing and entitlement to subsidies, will entail that other, inspection, inter alia in connection with more or less party-connected entities are not municipal council and county council elections subject to the reporting obligation – even in 2003 where publication of the parties’ though these can be in possession of relatively donors in particular was the theme. Reference substantial financial sums. is also made to Norwegian politicians’ interest The Ministry points out that the present in this in the form of Parliamentary Requests Act regarding publication of political parties’ which are the basis for this legislative work income applies to all parties that are registered and recent proposal Doc. No. 8:6 (2003-2004) according to the Election Act and which have from Member of Parliament Trond Giske presented lists at the last general election. regarding expediting this process in that a There is no connection between the central

organisations’ statutory obligation to present parties to allow inspection of its financial annual accounts of income and the situation circumstances is founded in the Accounting that the central party organisations are entitled Act. In this connection, reference is made to to support through Chapter 1530, item 70 in that the largest parties, i.e. parties with assets accordance with the guidelines P-650 of amounting to over NOK 20 million or which 24.5.1993 I) a. The Coastal Party, for example, have more than 20 employees, are already will be subject to the Act, but at present does subject to the Act , cf. Section 1-2 No. 10. The not receive subsidies through item 70. Committee concludes that the Accounting Act It is difficult for the Ministry to see from a in its present form is not suitable to provide a purely legal standpoint that there should be statutory basis for an accounting obligation for anything in the way for continuing to separate the whole of the proposed range of the obligation to publicise from the entitlement organisational levels of political parties or to to receive state subsidies. As the Ministry sees regulate follow-up and control by the it, there is therefore initially nothing to prevent authorities. the inspection rules in the Act also applying to The Ministry sees that changes must be other entities which, according to the proposal, made in the present Accounting Act so that it will not receive party support. shall be an appropriate legal authority for the The Ministry is of the opinion, however, system which is proposed established for that the obligation to allow inspection should political parties. However, the Ministry is of be strictly justified based on the need for the opinion that it is not a case of adjustments inspection by the public. It is the consideration or changes which can be relatively easily that private persons must not have unnecessary accomplished without this complicating the obligations imposed on them that is primary, Act to any degree for those who are otherwise but also the consideration for limiting the flow subject to it, or other users of the Act. From a and public administration of information which purely legislative point of view, this can be is already available or can be obtained in done by a separate section for political parties. another manner, or in which society in general The Committee points out that reporting of has a marginal interest points in the direction accounts to the Brønnøysund Register Centre that the obligation should not be made too in accordance with the model proposed by the extensive. As will be seen below, the Ministry Committee, will entail practical and legal assumes that the obligation to allow public problems. The Ministry is partly in agreement inspection should be limited to apply to the with this. In connection with the administrative political parties’ income. With the definition model and the reporting system which the and specification of the income categories Ministry proposes for the arrangement cf. which are prepared for, the inter-company Chapter 8 below, the Brønnøysund Register transactions and money flows from Centre could perhaps be an appropriate body to organisational entities which are connected to which the parties could report. However, the the party, will be seen from the income Ministry has not discussed this alternative in overview, cf. also the Committee’s proposal. depth in its proposal for a reporting model, but As is the Committee, the Ministry is in assumes that reporting shall be undertaken to favour of extending the requirement for Statistics Norway (SN). inspection / allowing an inspection to also The Ministry points out that the purpose of include registered political parties’ inspection in accordance with the Accounting organisations at the county level and at the Act and the considerations which lie behind municipal level. The proposal also includes the the need for increased right of inspection of youth organisations at the national level and at political parties’ financial circumstances, are county level. Others will not be subject to the different. Further, equitable considerations provisions of the Act, but preparations will be speak for gathering all statutory provisions made for voluntary reporting to be undertaken concerning political parties in one Act. The by political lists. Ministry proposes therefore that all statutory provisions which are relevant for the purpose The application of the Accounting Act to of this Bill, are collected in the new Party Act. political parties In that connection, no changes are proposed to The Committee has discussed whether it is the current Accounting Act. Reference is also appropriate that the obligation of political made to the comments by the consultative

body the Norwegian Association of Authorised the Act, in addition to the reporting obligation Accountants, quoted above, with which this contained in Section 19, are obligated upon proposal is regarded to be in line. request to allow inspection of the accounts which have been prepared for the previous Scope of the reporting obligation year.8 The Committee has discussed whether the The Ministry points out that Section 19 in reporting obligation shall be extended to also the Committee’s Bill entails an obligation for include the parties’ expenses, but does not all party levels subject to the Act to keep propose this. income accounts Reporting shall contain a The Ministry supports the Committee’s complete overview of all income the reporting viewpoints. In the Bill, a central assumption is entity has had during the period. One that the state shall not perform controls of or in consequence of this proposal is that municipal any other manner regulate the expenses of the and county party levels (including youth political parties. However, even though the organisations) will have an obligation to keep state shall not perform controls of the expenses accounts, which they are not subject to at of the political parties, it does not prevent the present. The proposal is assumed to be mainly public from having a well-founded need for in accordance Parliamentary Request No. 178. inspection of the expenses.7 The risk of The Ministry points out that the purpose of corruption and bribes will first and foremost be the Act is to allow inspection – not only of the connected to the parties’ income. Even though parties, but also of the various parties’ the European Council in its recommendation to organisational levels. The intention all along the states speaks of “accounts” and in Articles has been that the accounting obligation which 9 and 10 has put forward recommendations the parties that have submitted lists for the last regarding limits for election campaign general election are subject to at present, shall expenses and registers for all direct or indirect be extended to also apply to municipal and election campaign expenses, the main theme in county party organisations. This is to achieve the Recommendation is “gifts”. Neither the identical rules for all three levels, cf. Ministry nor the Committee propose that limits Recommendation to the Odelsting, No. 28 be introduced for election campaign expenses. (2002-2003). Information about the parties’ expenses in The Ministry sees that one consequence of general is not anticipated to contribute to this is that it will be difficult to fulfil the fulfilling, or be relevant for, the purpose of the purpose of the Act without the various levels new Act and it is therefore proposed not to be within the parties having an obligation included in the reporting obligation. imposed to keep income accounts which satisfy the requirements in Section 19 and which entails that all income shall be declared Income accounting and obligation to from the first krone. An homogenous template allow inspection of the accounts as they for keeping income accounts will make them exist comparable between the party levels, which The Ministry points out that the Committee has will be a great advantage to the public and the discussed registered political parties’ state. If there is to be any reality to the obligation to allow inspection of the accounts reporting obligation, the Ministry has difficulty as they exist, without there being any statutory in viewing it otherwise than that it must be obligation to keep accounts. In its justification based on an equivalent obligation to keep the Committee refers to the fact that most of suitable income accounts. The Ministry the parties today are assumed to keep accounts therefore supports the Committee’s proposal. It in accordance with their bye-laws, cf. 6.9.4 of is emphasised that the Party Act sets no other the recommendation. requirements for the parties regarding keeping The Ministry views this discussion in accounts than this. connection with the Committee’s proposal for The Ministry sees that the Committee’s Section 23 that all party levels that fall under proposal will entail an increased administrative burden for party levels which now fall under

7 For some voters, the parties’ disposal of its own funds could be an indication of how society’s 8 Reference is made to the remarks to Section 23 on funds will be used if the party gets into power. page 159 of the recommendation

the Act. The Ministry is of the opinion that them that upon request they shall allow there can therefore be a need for a simplified inspection of internal accounts such as they system for the smallest party organisations. On exist. this basis the Ministry proposes that party The Ministry proposes, in conformity with organisations which have had a total of under the Committee, that the Party Act shall not NOK 10 000 during one year, are not obligated contain requirements for auditor approval of to submit income accounts in accordance with the income accounts, but that they shall be Section 19 for that year. In the party signed by the head of the local organisation organisations’ calculation of total income (and possibly by the Treasurer) together with a during one year, public subsidies can be kept declaration that the party organisation has not separate and apart. In such cases it is sufficient had other income during the year other than that the party organisation submits a that reported. The same requirement applies in declaration regarding this to the public connection with declarations linked to the reporting register. It is emphasised that the exception clause in Section 18, third party organisation is obligated to submit such subsection. declaration within the statutory deadline. The exception clause does not prevent a party Further on what income shall be organisation with a total income of under NOK reported 10 000, voluntarily submitting income The Ministry has no comments to the accounts. Committee’s proposal with regard to reporting The Ministry is of the opinion that such of monetary and non-monetary contributions. exception clause will not undermine the The proposals are evaluated in accordance with intention of the Act regarding increased the Committee’s Bill, litra b) and the European inspection to counteract corruption or set aside Council’s recommendations in Article 2 in the suspicion of corruption. The requirement for a Recommendation. The proposal opens for self-declaration contributes to preventing voluntary work/group work still can be possibilities of evasion and give the authorities performed without reporting the value of it in an indication of the total income level of the the income accounts. Trade or professional party organisation. In addition to reducing the work which is performed by authorised administrative burden for the smallest personnel, who have it as their income basis, organisations, the proposal will not least will fall in under the definition of non- simplify public administration of the reporting monetary contributions. obligation. Reference is also made to Section Several of the consultative bodies have 18, subsection three of the Bill. also pointed out that it is important that non- The Committee’s proposal for Section 23 monetary contributions are included in the imposes an obligation to allow inspection of report. In its consultative statement, the Data the accounts that have been prepared for the Inspectorate looks for a more precise previous year. As the Ministry views the delimitation of this type of contribution than proposal, this right of inspection will also that appearing in Section 19 of the include accounts of the parties’ expenses to the Committee’s Bill. degree the party organisation keeps such The Ministry points out that the accounts in accordance with the bye-laws. The consequences of this proposal will be i.e. that a Ministry has put forward arguments above that pensioned plumber can carry out plumbing accounts of expenses can hardly be regarded as work free of charge for the party without the relevant to the purpose of the Act – which can value of it being reported. The same will in speak for the obligation regarding presentation principle be the case for an authorised auditor imposed on the parties by Section 23 in the who works as a carpenter at the moment – and Bill, should not include more than the income who does not have auditing competence as a accounts which shall be reported according to part of his income. This person can perform Section 19 and which alternatively can be “free” auditing work for the party, but not obtained upon direct enquiry to the reporting carpentry work – without this having to be register (Statistics Norway). The Ministry has declared in the party’s report. nevertheless chosen to further the Committee’s By private persons is also meant party proposal and is therefore in favour of the party members, regardless of what office they might organisations having an obligation imposed on hold in the party. Based on the Data

Inspectorate’s questions, the electrical services precisely the value of the alternative use of rendered by a party member or his or her time which shall be reported in this case – spouse/common law spouse/registered partner if it exceeds the “free” statutory limits. or others who have this is a profession, are not Equivalently, reduced payment or discount regarded as voluntary group work in the eyes on such services shall be declared in the of the Party Act and are therefore included in income report if the discount exceeds the the reporting requirement. If, on the other hand, the party member is employed full-time same limits. One question which is raised by the party and at the moment does not have in this connection is whether in setting the any other earned income, this person’s services value of services, (fictitious) value added will be regarded as voluntary group work tax shall be included so that the value of the which is not required to be declared in the service will be comparable to a greater degree party’s income accounts. with what the party would otherwise have to The Ministry sees that income basis / no pay for it on the market. The Ministry cannot income basis can be a somewhat artificial see that the Committee has discussed this criteria with regard to which services shall be question in-depth. The Ministry sees that it included in the voluntary group work concept. may be more correct to take VAT into If a rule regarding reporting of non-monetary consideration, but nevertheless proposes that contributions is introduced, so that the no requirement shall be made to use VAT contributions shall not only include objects, considerations as a basis for the setting of the but also services, and for which in its turn an value of a service rendered. exception is granted for certain services for The Ministry has also sustained the which it is in the interests of society that Committee’s proposal that reporting of non- private persons shall continue to provide free monetary contributions under the statutory free of charge to political parties, a delimitation limits shall not be required, cf. Section 19, must be undertaken in one way or another. The subsection four. Ministry has concluded that the income basis Contributions in the form of objects shall in this connection can be an appropriate be declared in the form of an estimate of the division. market value of the object. A donor who So as not to complicate the rule too makes a party organisation a gift of a used car, much, the Ministry does not intend to shall report this together with the value of the make a further delimitation of the income car if it exceeds the free statutory limits basis concept in the form of different applicable to the party organisation in question. The same applies to object d’art or percentage rates for part-time work.9 The securities to the same value. Reporting is not purpose of using the income basis criteria required for objects which are not assumed to as a basis, is to make a practical set of have any market value worth mentioning, for rules, inter alia so that setting a value on example, obsolete computer equipment, used the service performed shall be fairly furniture, objects which bear the mark of being correct. An authorised electrician who at “jumble” or objects which would be difficult to the time works as an electrician is assumed sell in a market or where it is impossible to fix to be in a better position than others to see the value. what the service is worth on the market. In this connection, the Ministry would also Alternatively, one can view it such that the point out that it would not be possible to set up person performing a free service for the control arrangements or mechanisms to ensure that such reporting is undertaken correctly, and party could instead have used his or her that all relevant values are included. working time to perform an equivalent job Compliance with the rule must also be based for another customer for payment. It is on a faith relationship between the parties and society in general.

9 I.e. so that services performed for the party Amount limits and consolidation of organisation can be regarded as voluntary group income accounts work donations if the nature of the work does not exceed 50% or 25% of the total income basis etc. The Ministry points out that several of the consultative bodies have proposed lower

amounts than those contained in the who has made the gift. Such a situation could Committee’s proposal. After further clearly be perceived as unpleasant for the consideration, the Ministry has nevertheless person who on the wrong basis is linked to this decided to sustain the Committee’s proposal type of gift. The Ministry sees that this for amount limits and supports the evaluations consideration can point in the direction that made with regard to differentiated amounts at other personal information, such as age or the national, county and municipal level. It is postal address should also be declared. The emphasised that the limits indicate when the Ministry has nevertheless chosen to sustain the donor’s identity shall be declared. In this way Committee’s proposal which limits the rates can be regarded as the statutory limits information to name and municipality of for the “free” amounts, in that donors behind residence. This is inter alia to reduce the gifts which are under these amounts are not donor’s exposure. required to be declared in the annual reporting The Committee is not in favour that the of accounts. However, all gifts and donations party at the central level consolidates the shall be included in the income accounts – accounts from the other organisations on a including those that are within the statutory national basis. The Committee states on page free limits. However, an exception is made for 97 of the recommendation: non-monetary gifts, cf. Section 19, subsection four. “Seen from a formal aspect, the rule does The donor’s name and municipality of not prevent the same donor, without being residence, or postal address for legal entities, identified, giving gifts to several different shall appear in the income statement when the entities in the organisation, which donor is behind gifts to the respective party collectively exceed the amount limit. This organisation with one or more contributions is not the intention of the Act. The having a value of NOK 30 000 or more at the Committee is of the opinion, however, that national level, NOK 20 000 or more at the the parties at the central level cannot be county level, and NOK 10 000 or more at the required to undertake co-ordination of the municipal level. For donations to the youth income reports with the aim of revealing organisations, the same levels apply as for the this type of evasion.” parent organisation at the same level, with the exception of any donations to municipal youth The Ministry notes that the Committee organisations which are not included in the sees that the proposal will open for certain reporting obligation. possibilities of evasion without putting these in In its consultative statement the Ministry more specific terms. The rules entail, for of Justice has raised questions as to whether example, that a person who donates NOK name and municipality of residence is 19 999.50 both to the party’s county sufficient, particularly in larger municipalities. organisation and to the county youth The Ministry sees that this can be a point. organisation, will not be required by law to Limited personal information can lead to declare his or her name. 11 In the extreme, the names of donors are published “unlawfully”, consequence of the Committee’s proposed for example where to different donors with the model will be that it will be possible for one same name from the same municipality are and the same donor to give over NOK 5 behind gifts which individually are within the statutory free amounts, are perceived by the 11 The consequence of the proposal can be seen party as one donor. However, it is assumed that more clearly from the following hypothetical the party organisation has further information situation: Take a party which in addition to a on those who are behind the gifts to the parties central youth organisation, has a county 10 beyond name and municipality of residence, organisation with a youth organisation in all 19 so that this type of error does not occur. counties and in addition local organisations in all Another, more current problem will be of the country’s 434 municipalities. Assume that where a person comes into the media limelight a donor wishes to support the party without being for having donated gifts to a political party willing to have his or her name publicised when in reality it is the person’s namesake through income accounts, i.e. the donation is kept just under the statutory limit. By dividing up the donation in this way, it will be possible to give 10 With the exception of any anonymous gifts over NOK 5 million annually to the party.

million annually without being named – by accounts shall be consolidated by the party spreading the donation over the whole party. centrally. It will therefore be up to the However, there is much that indicates that this individual party if consolidation is to be is a hypothetical case which for several reasons undertaken of the accounts. will not take place in reality. The donor will The Ministry has no remarks to the hardly have the prospects to achieve concrete Committee’s proposal for categorising of the advantages in a certain political body when the income and has sustained this in the Bill. No contribution is spread in this way, and comments have been received to the proposal therefore that such contribution, in spite of the from consultative bodies. total amount, must from a social viewpoint be regarded as less doubtful. In line with this line Reporting before an election of thinking it can also be asserted that a donor Many of the consultative bodies have been with such financial potential who wishes to against the majority in the Committee’s have influence in the party, will achieve more proposal that there shall not be a requirement by supporting the central organisation directly for extra reporting before an election, and few and rather accept the unpleasantness have positively supported the proposal. publication might entail. This seen inter alia The Ministry emphasises that the proposal on the background of that the Act does not gives minimum requirements for transparency. propose upper limits for contributions. It will be up to the individual party or party However, the Ministry sees that the organisation to practise a larger degree of Committee’s assumption that the party transparency, i.e. by “flagging” any donations centrally shall not be required to undertake received before an election. consolidation of the accounts for the whole of On this basis, the Ministry has chosen to the party organisation, opens for certain sustain the proposal presented by the possibilities of evasion of the rules concerning Committee’s majority. No preparation is made the public’s right of inspection. An obligation for the reporting system to take into account to consolidate accounts through the party voluntary reporting before an election. Such system, however, could come into conflict with information can be given by the parties via the principles for internal management home pages, newspaper advertisements, etc. circumstances in the party organisations. Alternatively, one could imagine that a Auditor approval, signature, deadlines public body, Statistics Norway for example, The Ministry has no comments to the could be assigned the task of consolidating the Committee’s proposal for formal requirements, accounts. However, this would not be practical including signature, auditor approval and for several reasons. Firstly, Statistics Norway deadlines. RV has stated that the deadline must undertake a review and consolidation of should be advanced one month because of all registered political parties’ (including party holidays. The Ministry is of the opinion that 1 organisations’) accounts as well as any June can be a tight deadline for the parties and voluntarily submitted by unregistered groups has therefore decided to retain the deadline in and lists. All donors, regardless of the amount the current Act which is at the latest six of the donation, must be named by the party to months after the end of the accounting year. Statistics Norway which in its turn will have The proposal is in line with the Committee’s the task of publicising donors of contributions proposal in all other respects. which in total exceed the statutory limits. In addition to administrative considerations, the Relationship to Personal Data Act Ministry is of the opinion that this solution is The Ministry points out that the Ministry of not appropriate because it assumes that all Justice and Data Inspectorate have especially donors must be included in Statistics Norway made comments regarding this. The essence register from the first krone. The consideration of both sets of comments seems to be that for the donor’s need to be anonymous can information about names of donors is to be therefore hardly be protected by such a model. regarded as sensitive information requiring an In addition, the model entails extensive explicit statutory basis for any electronic administration costs for the state. release as proposed. The Committee has also The Ministry proposes therefore that the touched on this in its discussions. The Data Act does not include a requirement that the Inspectorate goes further in its statement by

referring to various considerations in the Statistics Norway must handle the individual Personal Data Act, in spite of any clear inspection request. For the general public this statutory basis in the Party Act, indicate that could also be perceived as a bureaucratic such sensitive personal information should threshold which in its turn can weaken the only be released upon specific enquiry. interest in and significance for the inspection The Ministry is in agreement with that a regime. clear statutory basis must be included in the The Ministry sees a need to evaluate Party Act for electronic publication of donors. further whether there should be a time limit set The Ministry also views it such that it is on how long the information about the relevant to further evaluate whether individual donor shall remain open on the considerations of privacy indicate that specific Internet. The Ministry is of the opinion that enquiries should be an assumption/ such time period should be fairly well in requirement for publication of the parties’ accordance with an election period, and not set reports. On this point, the Act balances two too much shorter. It is assumed that voters different considerations, namely, the before an election can easily obtain consideration for personal privacy and on the information on who has supported the parties other hand the consideration for the public’s during the current period. need to inspect the parties’ income accounts The Ministry proposes that further and who supports them, based on the goal of determination of the time period shall be laid preventing corruption and bribes and protect / down in a Regulation. increase confidence in the democratic system. The free amounts which are proposed in the Violation – sanctions Act have been given precisely because of the The Ministry points out that submission of consideration that donors who wish to remain income accounts shall be a condition for anonymous to the state shall continue to make receiving the annual party subsidies. This is to donations to political parties within further tighten up the present arrangement. The defined limits. When the sum of the gift Committee proposes that the subsidies be exceeds a certain value, the consideration for withheld until “satisfactory reports have been the right of inspection comes in with the result submitted”. A complaints system is proposed that the name of the donor shall also be given. for such decision. The Committee also points Donors wishing to make gifts exceeding the out in the report that such sanction free limits are assumed to be aware of the arrangement are in place internationally and consequences this will have with regard to are also under consideration for being publication and are assumed to have introduced in Sweden. The Committee has undertaken the necessary consideration before discussed whether stricter sanctions should be the decision was taken. According to the introduced, but does not propose this. impression the Ministry has obtained from the The Ministry is sceptical as regards such statements made by the consultative bodies, arrangement which is perceived as being a these limits are in any case not set too low. The significant re-organisation of the current Ministry is therefore of the opinion that practice. A condition regarding “satisfactory” consideration for the individual donor’s right reporting of accounts entails that the state sets to remain anonymous to the state is already conditions for the state party subsidy protected enough in the Committee’s proposal. arrangement and that there will be an The Ministry in its Bill has therefore assumed opportunity for the exercise of discretion by that the parties’ reports shall be put out openly the authorities. This breaks with the original on a website administered by Statistics intention behind the subsidy arrangement, cf. Norway. discussion in Chapter 5 above. What can be The Ministry cannot envision cases where regarded as satisfactory accounts in relation to personal information could clearly be misused statutory requirements, cannot be fixed on an if information regarding donors and the objective basis or by objective criteria in the amount of gifts, in line with the Committee’s same manner as “has submitted income report” proposal, are entered openly on an Internet or “has not submitted income report by the page etc. A model where publication shall only deadline”. Reports can contain various defects take place upon a specific enquiry will entail – some significant and others less significant. considerably more public administration in that It will be impossible to include a precise

delimitation in the rules when subsidies in requirement for reporting of income accounts cases of doubt shall be paid or withheld. at a certain deadline. The Ministry is therefore Administratively, this will demand large in favour of a rule that omission to submit resources in the form of thorough review and income accounts or lack of declaration that the evaluation of the first instance, handling of any income is under the lower limit, can have complaints, etc. With the deadlines used for consequences for payment of state subsidies. complaints, i.e. in the Administration Act, such Omission to submit an income report i.e. for processes could take a long time. The Ministry two consecutive years can give an indication knows from experience that time margins both that the party organisation no longer exists, for large and small parties can be tight to avoid which in accordance with the present rules liquidity problems, particularly around the gives grounds for withholding party subsidies. change of the year. The fact that the state is Party organisations which systematically or behind a steadily increasing share of the consciously omit to comply with the legal financing of political parties makes the parties requirements, will be in danger of losing their even more vulnerable concerning delays by the subsidies. In such cases, the Ministry could state. The Ministry is of the opinion that such give a recommendation to the Party Act Board element should be attached weight in the which according to the proposal will have the evaluation of how invasive or strict a condition authority to make this type of decision. The regarding reporting before payment of Board will also be able to make such decision subsidies must be. The Ministry is of the on its own grounds and initiatives if it finds opinion that quality control of accounts should that the rules contained in the Act are not be left to the public, including competitive complied with. parties or the media, which the transparency The Ministry makes no preparation for any regime is primarily for. type of reminder or written communications in The Ministry is not in favour of objective the form of warnings in connection with absent criteria regarding whether a party organisation submissions or declarations. Nevertheless this has submitted income accounts or not within does not prevent the party from itself giving the set deadline, shall unconditionally provide notification of the reason that the report has not grounds for withholding subsidies. The been submitted according to law or is deficient Ministry points out that the parties and party and when these circumstances shall be organisations are organised very differently corrected. The Ministry also assumes that inter alia concerning the size and competition between the parties can have a administrative apparatus. Accounts that are positive influence on compliance with the Act submitted late can have different causes when it is extended to apply to all party beyond the concrete cases which the Act is organisations which are entitled to subsidies. primarily intended to cover, namely, conscious withholding or omission to keep accounts by the party organisations. Long-term illness or other personal circumstances can have great consequences for the operation of smaller party organisations, which can mean that the organisation can fall behind with its tasks. If the accounts are to pass through several stages, either in the party organisation or in a public system, this could also be the cause of delays. The Ministry will have to make a decision in the various cases as to whether an omission reason is to be regarded as legitimate or not, which in its turn will entail exercise of discretion and possible discriminating treatment. The Ministry emphasises however that there shall continue to be reality in the

8 Models for administration in connection with financing of political parties and democratically elected groups and publication of accounts

8.1 Present arrangement – “postbox” for the Committee. All written Committee for allocation of state enquiries to the Ministry concerning subsidies to the political parties interpretation of the rules from the parties or ______others subject to the Act, as well as from public bodies that are involved in the Reference is made to the description of the administration of the subsidy arrangement, are state subsidy system for political parties in forwarded to the Committee for consideration. Chap. 1530 in the Ministry of Government The Committee costs the state a total of NOK Administration and Reform’s budget, in 8000 per year in the form of Committee Chapter 5 above. honoraria, which is due inter alia to the fact that the case load is limited. Committee for allocation of state subsidies to the political parties The Ministry’s role The Ministry of Government Administration Establishment of an independent committee and Reform has issued guidelines P-650 for the with the authority to undertake allocation and arrangement. Like – and in accordance with – decide matters of discretion was one of the same superior principles and assumptions Parliament’s assumptions when the party as for the remainder of the Ministry’s subsidy system was introduced in the 1970s, programme areas and budget chapters, the cf. Proposition to the Storting No. 108 (1969- Ministry proposes the amount of 70). Even though it is not explicitly stated in appropriations in Chap 1530 Subsidies to the the preparatory works, it is reasonable to see political parties for the coming year in the this in context with a desire that the Fiscal Budget, cf. Proposition to the Storting government in power at the time should not be No. 1 for the Ministry of Government able to control or manage the state subsidies to Administration and Reform. their own party organisation or to their Every year the Ministry makes political opponents’ party organisations. recommendations to the Committee for the The Committee for distribution of state allocation of appropriations decided by subsidies to the political parties is appointed Parliament through Chap. 1530 items 70 and for a period of four years. As mentioned above, 76. In addition to the decided appropriations, the Committee is given the authority to the election statistics from the last previous interpret the rules for the arrangement (P-650 election prepared by Statistics Norway are the og 24.5.1993), i.e. discretionary questions, and basis for the Ministry’s proposal. The Ministry decide complaints with binding effect. In undertakes payment to the central addition, the Committee distributes subsidies organisations and the central youth through item 70 Subsidies to the parties’ organisations. In accordance with the financial central youth organisations. Beyond the stated rules for the state, the subsidies to the tasks, the present guidelines contain few individual party organisation are divided into provisions which can be said to regulate the quarterly payments. Payment is undertaken in Committee’s activities, including how it should the beginning of each quarter. be composed. It is regarded to be within the Concerning allocation of Parliament’s rules that the Committee can be appointed annual appropriations to the municipal and from one period to another. This has also been county party organisations and groups, i.e. done, most recently for the present period. At items 71-74, the Ministry calculates the present, the Committee consists of a Supreme respective amounts in a separate Circular. The Court Attorney (Chairperson), an industrial Circular is forwarded to all County Governors, court judge and a representative for Statistics counties and municipalities and is also Norway (SN). The Ministry of Government displayed on the Ministry’s website – ODIN. Administration and Reform functions as a

In addition to the amount appropriated, filed by the individual municipality, county Statistics Norway’s election statistics are used and in Parliament and that inspection is as a basis for calculation of the amounts. granted upon individual requests. This will The Ministry does not undertake any mean that the reports will be made publicly follow-up or control of the accounting available – not necessarily that they will be obligation which the parties’ central publicised. The Committee is of the opinion organisations are under at present according to that the parties’ reports should be publicised in the Act relating to publication of political such a manner that the public can inspect them parties’ income. In accordance with Section 5, without having to direct individual requests to the accounts shall be forwarded to Parliament, the municipality/county. but neither Parliament nor the Ministry have a The Committee points out that single-entry follow-up responsibility imposed on them. accounts in local organisations will not provide Neither is such control or follow-up of the an insight into internal transactions in the party accounts relevant in connection with the group during the accounting year, i.e. transfers administration of the present subsidy system. between different party organisations. The public should be given access to a total The role of other public administrative overview of the individual party’s sources of bodies income and financial situation on a national The County Governors, municipalities and basis. The Committee is of the opinion that this counties are also involved in the administration should be an ambition as long as it can be of the party subsidy system. The municipalities realised without major costs and bureaucracy. allocate the annual subsidy amounts in item 71 The Committee proposes that Statistics Subsidies to municipal parties and item 72 Norway is given the responsibility for receipt, Subsidies to municipal council groups on the collocation and publication of the income basis of the rates stated in the Ministry’s accounts. The parties’ central body and youth circular. The counties do the same for items 73 organisations on a national level, according to Subsidies to the county parties and item 74 the proposal, shall report directly to Statistics Subsidies to the county council groups. Norway, while the county and municipal party The municipalities and counties pay the levels shall report to the county and subsidies through the respective items. The municipality, respectively, which shall check invoices shall be certified by the municipal and and communicate the reports to Statistics 1 county auditors respectively, and forwarded to Norway through the KOSTRA system. The the County Governor for reimbursement by the Committee points out that Statistics Norway is Treasury. A condition for reimbursement is a professionally independent institution which that the applications for reimbursement reach must be said to satisfy the requirements for the County Governor in such good time that legitimacy. Statistics Norway has both the amount can be entered into the present sufficient competence and a technical year’s appropriation accounts, cf. also apparatus to perform the tasks of collocating Appropriation Rules. To avoid there being too the parties’ income reports and check that such tight time margins for payment of the reporting has been carried out. At present, reimbursement claims, the Ministry has set a Statistics Norway receives large amounts of deadline for submission of 15 November. data from the municipalities and counties via the KOSTRA system. Statistics Norway has confirmed to the Committee that the 8.2 Proposal by the Democracy circumstances are in order for development of Financing Committee a system which can perform this type of task. ______According to the Committee’s proposal, Statistics Norway will be tasked with ensuring System for reporting that the parties’ central, county and municipal The Committee is of the opinion that it is organisations report their income annually in important that a system be established where information regarding parties’ income can easily be made available to the public. 1 KOSTRA (KOmmune STat RApporting) The Committee has evaluated a system (Municipal State Reporting) is a system for where the income reports are sent to and are electronic transfer of information from municipality to state.

accordance with statutory requirements. The Committee has considered whether the Statistics Norway’s control function should be Committee for allocation of subsidies to the limited to seeing whether the parties’ reporting political parties should be retained and if it can obligation is met or not. The parties’ reports undertake the task of responsibility for shall be collocated in a form which gives reporting in the proposed system. The reliable and comparable information. The Committee is not in favour of this “since the Committee proposes that the deadline for body, according to the Committee’s proposal, reporting to the municipality/county is set at 1 will be assigned more, and more varied tasks”. July. Statistics Norway shall publicise The Committee proposes that the newly information on its website as quickly as appointed board be given the following tasks: possible. - handle complaints and discretionary The Committee proposes that checking questions in connection with the that the reports satisfy statutory requirements municipalities’ / counties’ decision shall be performed by the municipalities and regarding allocation and any withholding counties. The municipalities and counties, of state subsidies (cf. 6.11 in the according to the proposal, shall not perform recommendation) any factual control of the content of the party - give advice regarding the appropriations organisations’ reports, but see that the statutory level for state subsidies to the political requirements for reporting are met. As regards parties (cf. 7.14.2. in the recommendation) the central organisations, the controls shall be - handle complaints regarding decisions on performed by a chartered accountant before the registration of party names (cf. 9.2 of the reports are sent to Statistics Norway. recommendation) - draw up an annual report on the parties’ Inspection and controls performed by an income reports with a summary of the independent council council’s work otherwise (cf. 6.12 in the The Committee points out that the European recommendation) Council recommends that the states ensure - give advice on what amount limits shall be independent controls of the financing of the applicable regarding when the donor shall political parties and election campaigns and be identified in the parties’ income reports that inspection of the accounts of the parties (cf. 6.10.2 in the recommendation) should be included in this.2 The Committee is of the opinion that if On the basis of the above, the Committee is of Statistics Norway is assigned the task of the opinion that a new body (board) should be receiving and collocating the income reports, it appointed to supervise the financing of the will create confidence that the rules will be political parties and be responsible for other followed, cf. paragraph above. tasks according to the Party Act (reporting and The Committee nevertheless assumes that handling of complaints). In order to give the it would be appropriate to appoint a separate, board the character of independence, the independent body or board which would be Committee proposes that it be appointed by the assigned the task of performing supervisory King in Council. The Committee presumes that controls of the system. It is proposed that the the council should be composed of five council shall submit an annual statement to the members and that the chairperson must have Ministry on the year’s reports on the basis of judge experience. Beyond this, the Committee Statistics Norway’s collocation of them. The has no concrete proposals for guidelines as to statement shall contain information on any how the board shall be composed, but assumes missing reports, any deficiencies with the that the members should be in possession of reports etc. The Committee is of the opinion broad and all-round political experience, which that the board, as part of the statement should can contribute to give the board democratic give a general evaluation of the situation and legitimacy. It is proposed that the members are the system, and possibly propose changes. appointed for a period of six years. In order to Reference is also made to the Committee’s achieve continuity, replacing all members at proposal in paragraph 6.12 of the the same time should be avoided. recommendation. The Committee is of the opinion that an annual report on the board’s work, including a 2 Rec(2003)4 Article 14. description of the cases the board has received

for consideration, will represent a democratic regard it as natural that SN assumes other innovation in Norway. types of control or secretariate tasks, cf. The Committee points out that the last paragraph in the Official Norwegian proposed board could be a natural basis if at Report Chap. 1.1.8 which indicates another any time in the future a permanent election role.” commission is to be set up in Norway. Several countries have election commissions which Hamar City and Rural List supports the perform a superior, democratic supervisory Committee’s proposal for reporting through role, i.e. Israel, France and the UK. In its the KOSTRA system to SN, and also supports Official Norwegian Report 2001:3, the the Committee’s recommendation that SN is Election Act Committee was in favour of given the responsibility for receipt, collocating setting up an election commission in Norway. and publication of income accounts and It was argued that an election commission reports. could inter alia have the role of a knowledge Bærum Municipality is of the opinion that bank, perform widespread information work several of the Committee’s proposals for the and function as a service body for the arrangement will be more expensive and population. It was also pointed out that it could extremely bureaucratic. be an advantage to have a more collective Enebakk Municipality is of the opinion administration of the elections and that a that a national reporting register is unnecessary commission could follow the technological and that a new council in this area should not development more closely. be set up. With the media attention such An election commission could also be given systems draw, the public interest should be the special responsibility for stimulating sufficiently protected in that the general public research on elections and democratic interests, will have access to the parties’/groups’ cf. para. 10.2.4 in the Election Act accounts or income overviews within a Committee’s recommendation. specified date each year. Stord Municipality does not advise a central register based on a pure cost and 8.3 The view of the consultative usefulness evaluation. The Municipality bodies supports the Committee’s proposal for an ______independent board, but emphasises that the members, in addition to broad and extensive System for reporting political experience, must also have general confidence across the party boundaries. The The Ministry of Finance states in a letter of equivalent statement has been made by Bomlø 8.2.2005 on the role of Statistics Norway: Municipality

Oslo Municipality is sceptical to that “The Ministry of Finance and Statistics reporting of the local parties’ income shall go Norway (SN) is in favour that Statistics through KOSTRA: Norway establishes reporting and

publication of information regarding party “The municipalities and counties seem in support, such as is described in the addition to be assigned tasks far beyond recommendation. i.e. with direct reporting the communication itself of the materials from the parties’ central organisations and which are reported, inter alia that it shall youth organisations at a national level, and be up to the municipality to evaluate reporting through the KOSTRA system for whether parties’ reports satisfy the county and municipal parties. A statutory requirements as well as being the reservation must be made that the cost decision-making authority concerning evaluation can be different when the decisions regarding payment or refusal of arrangement for reporting has been set in payment in the case of deficiencies or more concrete terms. unsatisfactory reporting by the parties. In FIN/SN is further in favour of SN the opinion of Oslo Municipality these are assuming the purely statistical tasks for a not tasks that are natural to assign to the new board for reporting and handling of municipalities. The County and Municipal claims, cf. Chap. 6.12. However, we do not party organisations should report directly

to SN in the same manner as the parties’ represents both the main lines in central organisations.” Norwegian politics and ensures representation of both small and large Oppland County Council touches on the parties in a reasonable manner. So that this same in its statement. shall succeed, the board should be Aust-Agder County Council emphasises extended to 7 members. The first time, 3 that municipalities and counties must be members should be appointed for 3 years, compensated fully for the extra work which and 3 members for 6 years, thereafter new they are assigned through the new reporting members are appointed for a 6-year period. provisions. The Chairman should be appointed for 6 Hordaland County Council is of the years.” opinion that the County’s control of reporting must be limited, and that good routines and The Conservatives support the proposal to guidelines must be drawn up for reporting and phase out the present Committee for allocation payment of subsidies. of state subsidies and replace it with a board Buskerud County Council is of the opinion appointed by the King in Council, and that the proposal for the new arrangement composed of five persons appointed for six seems to be more bureaucratic than at present years. The board should possibly be chaired by and is anticipated to create extra work both for a person who has judge competence. The the parties and for the county administration. remaining board members should be persons Akershus County proposes that SN draws with broad political experience. At the same up a standard spreadsheet for the parties’ time the Conservatives are interested in not reporting. The parties send the report creating unnecessary public bureaucracy electronically to SN with a copy to the country around enforcement and compliance with the administration, if the County shall still be various provisions of the Act, and that the responsible for payment of state subsidies to board’s control mandate is clearly and the parties. evidently delimited to only what is required by the necessities evidenced in the Act. Establishment of an independent board The Ministry of Justice states in a letter of Trondheim Municipality supports the 2.2.2005 regarding inspection and control by Committee’s proposal for the establishment of an independent body: an independent reporting board The Centre Party supports the Committee’s “The decision of the application for proposal for the establishment of a central allocation of subsidies according to the Bill board which is given the responsibility to put Chapter 3 will be an individual decision forward proposals on the level of the next according to the definition contained in Section year’s state party subsidies based on 2, first subsection, a), cf. b) of the Parliamentary criteria, as well as for reporting Administration Act. This as the starting point and handling of appeals connected to allocated should mean that the special provisions on party subsidies. SN can well be given individual decisions contained in the secretariate responsibility. The board must be Administration Act in Chapters IV to VI apply, given the responsibility for keeping itself well including the rules regarding appeals. We informed regarding party work both internally request that the relationship to the and externally. An equivalent statement has Administration Act’s rules concerning been submitted by Grong Municipality. individual decisions be clarified in the further The Progress Party in Østfold supports the work with the matter. Further, it is unclear Committee’s proposal that the board shall whether it is the intention that the appeal make a statement regarding next year’s authority’s decision cannot be brought before appropriations for the state party subsidies in the courts, cf. Bill Section 15, second connection with the submission of its annual subsection. The Ministry of Justice is critical report. towards such preclusion of controls by the The Pensioner Party states in a letter dated courts.” 20.1.2005: “In order to ensure democratic legitimacy, the board must be composed so that it

8.4 Evaluations by the Ministry counties and partly by the parties’ central ______organisation (central support), the Ministry sees two alternatives: The Ministry is in agreement with the 1. The individual party organisation is Committee that a model should be used for the required to report their income direct to system which makes inspection effective and SN. SN does not undertake consolidation simple for the public without it being of the accounts with regards to identifying necessary to direct enquiries to the individual donors who have supported several party party or party organisation. This is out of organisations during the year. consideration both for the public and the party 2. The individual party organisation is itself which with such system is expected to required to send its accounts to the party’s save some administration regarding enquiries central organisation which is assigned the for inspection. task of reviewing and consolidating the The Committee is in favour of the accounts accounts. The central organisations then from local and county organisations being sent forward the accounts in consolidated form, to the municipalities and counties before they, including their own, to SN. In this report after a review, are forwarded to Statistics is stated the names and addresses of donors Norway through the KOSTRA system. who have in total given the party gifts over The Ministry points out that several the statutory free limits. municipalities and counties in the consultative round have been negative to this proposal. In Chapter 7 above, the Ministry has argued Therefore, in this Bill the Ministry does not that SN for several reasons should not be intend increasing the municipalities’ required to consolidate the accounts from the administrative tasks with the state subsidies to various party organisations in order to identify the political parties. As mentioned in Chapter 5 donors who in total have given gifts to the above, the Ministry is in favour of the County party organisations over the statutory free Governors taking over the administrative tasks limits. Model 1, which does not entail which the municipalities and counties have at requirements for consolidation at any level, as present in connection with the state party previously pointed out, will purely subsidies system. theoretically open for evasion of the Act in The Ministry sees the Committee’s certain cases. proposal regarding submission via the Model 2 would come into conflict with municipalities initially as a necessary link in internal management principle in some parties. the Committee’s proposal that the The Ministry recommends that Model 1 is municipalities and counties on this basis shall used as a minimum requirement in the Act. be able to decide whether the subsidies to the According to the Ministry’s proposal, SN shall individual party shall be paid or withheld. As collocate the accounts and make them will be seen from the preceding chapter, available on a separate open website for the however, the Ministry advises against having system. On this website shall be stated which reporting of income accounts as an parties or party organisations have not unconditional premise for paying party submitted accounts or declarations within the subsidies. Beyond the Committee’s proposal statutory deadline. The Ministry does not on this point, the Ministry cannot see strong envision SN having any other role in this grounds for the municipalities and counties to system. have these tasks imposed – given that they shall still have a role in the administration of the subsidy system. New, independent board The Ministry sees that a model where SN The Committee has discussed inspection and is the public administrative link to collocating control by an independent board which is accounts and making comparable overviews, established for the new system. The can be appropriate, not least on the background Committee has discussed whether the present of what the Ministry of Finance and SN have Committee for distribution of state subsidies to themselves expressed in the matter. Beyond the political parties should be maintained and the Committee’s proposal that the reports shall can possibly carry out the task of being partly take place by the municipalities and responsible for reporting in the proposed

system. However, the Committee is not in Neither can the Ministry see that viewed favour of this “since the body, according to the individually there will be a necessity for a Committee’s proposal, will receive more, and separate Board to evaluate the amount limits in more varied tasks.” the new Party Act. Since nevertheless the The Ministry is in favour of the reporting Board is proposed set up, that could be one of system for income accounts for the political its tasks. parties and the system for publication of The Ministry sees that there will still be a accounts shall be as efficient as possible for all necessity for a Board to undertake the parties, including being based on IT necessary exercise of discretion and possibilities available at all times. The interpretations as well as consider appeals with organisation is presumed to be in line with the binding effect. proposal put forward by the Ministry of Further, the Board will be given the Government Administration and Reform’s authority to make decisions concerning proposal for reform policy for state withholding of subsidies after a administration in all other respects. The recommendation by the Ministry. However, Ministry desires that public resources which the Ministry sees that there will be a necessity are used for state party subsidies, shall benefit to extend the Board’s tasks in that the appeal the parties to the greatest possible degree. authority for the Election Act is proposed The Ministry assumes that there shall included in the new Party Act, which is continue to be an independent board - proposed handled and followed up by the hereinafter referred to as a Board - with independent Board. responsibility for the arrangement, and that the The Ministry is in doubt as to whether the Ministry (still) will be given a purely Committee’s proposal for a Board of five administrative function in relation this Board. persons with the proposed work tasks, is The Committee proposes that the Board shall practical. However, the Ministry is aware that be composed of a total of five persons, with the consideration of the Board members having the chairperson having judge competence.. political experience, as inter alia pointed out The Ministry cannot see that any estimate by several of the consultative bodies, can be with regard to the number of total man-labour relevant. A broad representation of different years for the new Board has been given. political interests can be difficult to achieve The Ministry points out that several of the with a small Board. The Ministry has therefore tasks the Board is thought to perform, cannot chosen to pursue the Committee’s proposal be regarded as critical to the state party subsidy regarding a new independent Board of five system functioning well - and better than at persons where the chairperson has judge present. The Ministry has presented arguments competence and the other members are sought above that withholding of state subsidies shall appointed among persons with broad political not be an ordinary sanction regarding the backgrounds. The Board shall be assigned the system. As mentioned in the previous chapter, tasks proposed by the Ministry in this Act or in it will be up to the Board to make decisions a separate Regulation. regarding withholding of subsidies in the cases The decision of allocation of support will where a recommendation for this comes from be made by an administrative body (Ministry the Ministry, or the Board itself concludes that and County Governors) with a right of appeal there are grounds for such withholding. to the Party Act Board. No preparations will be Concerning recommendations for the level made for any form of preclusion of control by of appropriations, such recommendations will the courts of the Board’s decisions. be of limited use when the Ministry prepares budget proposals for its sector area. In that connection priorities must be set over a far greater range of considerations than such Board will be competent to have any opinions on, including general macroeconomic considerations and profiling desires by the Government. In other respects it will still be Parliament that finally decides the annual appropriations through Chap. 1530.

11 Comments to the individual provisions ofthe Bill

Chapter 1 Introductory provisions The substantive content of the provision is identical with Section 5-1 of the current Re. Section 1 Purpose and scope of the Act Election Act.

The provision draws up the scope of the Act Re. Section 3 Conditions for registration of a and the various objectives that are sought to be party name in the Register of Political Parties served. The registration system for the The provision is identical to the provision in political parties paves the way for the elections Section 5-2 of the current Election Act. to be accomplished safely and democratically Amendments have been undertaken in and in line with the objectives clause in accordance with Recommendation to the Section 1-1 of the Election Act. Odelsting No. 60 (2004-2005) from the The ramifications of the Act regarding the Standing Committee on Scrutiny and parties’ financial circumstances are contained Constitutional Affairs. in the rules which regulate the parties’ access to accept private contributions. As a whole the Re. Section 4 Change of registered party name. rules contribute to the political parties Merging of parties under a new name receiving sufficient resources to perform The substantive content of the provision is important core tasks for democracy. identical with the provision in Section 5-3 of The Act ensures the public’s democratic the current Election Act. rights of inspection of who finances the different parties and who the party can be Re. Section 5 Deregistration. When a party expected to be connected to. A requirement for name becomes free. The provision is identical transparency is given for the purpose of with the provision in Section 5-4 of the current preventing relationships similar to corruption. Election Act. The second section contains the statutory basis for the King to issue a Regulation Re. Section 6 Information regarding who is on regarding the application of the law on the Executive Board of the party Svalbard and lay down special rules taking into The provision is identical with the provision in consideration the local circumstances. The Section 5-5 of the current Election Act. present arrangement for support to political Amendments have been undertaken in parties has not included Svalbard. accordance with Recommendation to the The third subsection lays down that Odelsting No. 60 (2004-2005). Chapters 3 and 4 apply to parties that are registered in accordance with Chapter 2 of this Re. Section 7 Publication of decision Act. In addition to the party’s central The provision is identical with the provision in organisation, this includes the party’s central Section 5-6 of the current Election Act. youth organisation, county organisation, county youth organisation and municipal Re. Section 8 Appeal organisation. The latter organisations are The provision corresponds to Section 5-7 of referred to in the text of the Act as “party the current Election Act with adjustments and organisations”. The groups in Parliament, editorial changes. The Appeal Board according County Councils and Municipal Councils are to the Election Act has been replaced with the not included in the Act. Party Act Board which is appointed with the statutory basis in Chapter 5. Further rules regarding the appeal channels which at present Chapter 2 Registration of political are contained in Section 11 of the Election parties Regulation, have been included in this provision.

Re. Section 2 Registration authority. Effects of Re. Section 9 Regulation registration The provision corresponds to Section 5-8 of the current Election Act. Since it has been

proposed to include the rules of the Election The third and fourth subsections establish Regulation regarding appeal (Section 11 of the the assumptions which are the basis for Regulation) in Section 8 of the Party Act, the Parliament’s appropriations decisions and statutory basis for the Regulation is limited to which are expressed several places in current concern the registration system and the guidelines regarding the subsidy system for registration authority’s activity. Reference is the political parties. The assumptions concern also made to the statutory basis in Section 27 subsidies at all levels. Those receiving state of the Regulation. subsidies dispose freely over it and shall not be held responsible for the use. Chapter 3 Financing of political parties’ organisations and democratic groups Re. Section 11 Public subsidies to political parties’ organisations and youth organisations Re. Section 10 Superior principles for public at the national level subsidies The provision regulates the state subsidies The first subsection establishes that subsidies which are paid to the parties’ central to the political parties’ organisations and the organisations and central youth organisations amount of them are dependent on the (organisations at the national level). At present, appropriations decision taken by Parliament. the rules are contained in the guidelines for the The provision pursues the current arrangement arrangement, P-650, Roman numeral I. The as it is described in the current guidelines, P- provision that the application shall be made to 650 of 24.5.1993. In addition to the the Ministry is also in line with the intention of appropriations amount, the official election the present system. According to Section 1, statistics for the last preceding election will be subsection three, only registered political used as a basis for the calculations. The parties will (still) be entitled to receive state Ministry allocates the subsidies, as at present, subsidies. The requirement for popular support according to objective, verifiable criteria. at the last general election is set at 2.5% of the The second subsection establishes that the votes on a national basis or representation in activities of the democratic groups in Parliament to be awarded basic subsidies. The Parliament, in the county councils and in the vote subsidies are awarded from the first vote, municipal councils are financed by, independent of support. The requirement that respectively, Parliament, the county councils the party must have presented lists in at least and municipal councils themselves. This is a half of the counties is removed. The system change in relation to the present system as far with basic subsidies is new. According to the as the municipalities and counties are current system the whole of the subsidy is concerned. The present earmarked subsidy distributed according to the parties’ number of system is proposed included in the block votes. The system with subsidies to the parties’ subsidies. The democratic body decides the central youth organisations is continued. The extent of the support itself. Allocation to the subsidies shall still be calculated in relation to parties in municipalities and county councils the parent party’s popular support. Subsidies must take place in relation to their popular are paid from the first vote. Subsidies to the support at the election. The subsidies can then youth organisations consist only of vote be allocated in relation to the number of subsidies, not basic subsidies. As previously, representatives, as for the representative the application applies to support for the whole subsidies at present, or in relation to the of the period. number of votes. The second subsection does not state anything about municipal/county Re. Section 12 State subsidies to political support to the local party organisations in the parties’ organisations and youth organisations municipality/county and the allocation of it. It in the counties is allowed to grant such subsidies. It is The provision regulates state subsidies which important that no party organisation benefits are paid to registered parties’ organisations at unreasonably well or not well from a state the county level. At present the rules are subsidy system. That public support to political contained in the guidelines P-650, Roman parties must be allocated fairly is regarded as a numerals II 3 and III. The provision continues result of general legal principles. the requirement that a county organisation must have been established in order to be able

to receive subsidies. The system of basic subsidies both as a county party and municipal subsidies is new. There has not previously party if they satisfy the requirements. This is in been a requirement for a certain popular line with established practice. support for award of subsidies. That a part of As previously, the application applies to the subsidy, basic subsidy, is contingent upon subsidies for the whole of the period. popular support / achieved representation is The rules regarding allocation of the thus new. It is emphasised that the party subsidies between the parties on the common organisations in Oslo Municipality, which is a list is continued. It is a requirement that all the municipality with municipal and county tasks, participants are registered political parties. The are entitled to subsidies both as a county party requirements that the party must have a and municipal party if they satisfy the municipal organisation also apply. Only one requirements. This is in line with established basic subsidy is paid, if the requirements for practice. popular support are met. How the subsidies are As previously, the application for subsidies to be divided between the parties on the list applies to support for the whole of the period. must be stated in the application. It is a new requirement that the youth It is new that the county governor shall organisation itself applies for subsidies and undertake payment of the state subsidies receives them paid directly. Subsidies are paid through Chap. 1530 Item 71 Subsidies to from the first vote the parent party obtains at municipal parties. the last county council election. The rules regarding allocation of subsidies Re. Section 14 The Ministry’s access to between parties and common lists are withhold state subsidies continued. It is a requirement that all The provision is new and provides the Ministry participants are registered political parties. The with a statutory basis to make a requirement requirements that the party must have a county that the party or party organisation has organisation applies correspondingly. Only one complied with the reporting rules in the Act basic subsidy is paid, if the requirement for before state subsidies are paid. The provision popular support/representation is met. How the provides the Ministry with the authority to subsidies are to be divided between the parties withhold state subsidies to the parties that omit on the list must be stated in the application. to comply with the provisions of the Act It is new that the county governor shall regarding reporting or declarations in undertake payment of the state subsidies accordance with Section 18, subsection three through Chap. 1530 Subsidies to county party within the given deadlines, or if there any organisations, and a new item for the county doubt as to whether the party organisation is youth organisations. still in existence. Lack of reporting of annual accounts can inter alia give grounds for such Re. Section 13 State subsidies to political doubt. In order to ensure objectivity, the parties’ organisations in the municipalities Ministry in such cases will submit a The provision regulates the state subsidies to recommendation for a decision for withholding the registered parties’ organisations at the to the Party Act Board, cf. Chapter 5 of the municipal level. At present the rules are Act. The Ministry’s recommendation has a contained in P-650 Roman numeral II 1. The suspensive effect, and no interest is paid to the provision continues the requirement that a party if the recommendation is not approved municipal organisation must have been by the Board. established in order to receive subsidies. There It will be up to the party or party has not previously been a requirement for a organisation itself to clarify the circumstances certain popular support for award of subsidies. surrounding its existence to the authorities, i.e. Such requirement will still not apply for vote to the County Governor and the Ministry support which is paid from the first vote. (dependent on which level the party That a part of the subsidies, the basic subsidy, organisation receives subsidies from) and also is conditional upon a certain popular support / to ensure that the Act’s reporting requirements achieved representation, is new. It is are complied with. emphasised that the party organisations in Oslo Municipality, which is a municipality with Re. Section 15 Appeal against a decision both municipal and county tasks, are entitled to regarding state subsidies

The provisions regarding access to appeal contributions in addition to state subsidies. against a decision on award of state subsidies The first subsection establishes the main rule, to the party organisations are collected in one namely that it is allowed to give contributions provision. They appear in the present to political parties. The right applies to guidelines, P-650, Roman numeral II no. 1, everyone, i.e. both legal and natural persons. litra F for the municipal organisations and No. The prohibition against accepting 3 litra F for the county organisations. An anonymous gifts in the second subsection is appeal against a decision made by the County new, and assumes a principle that the party Governor or the Ministry shall be submitted to must know who supports it financially. So that the Party Act Board for consideration, cf. a gift shall be regarded as anonymous, the Chapter 5 of the Act. donor’s identity must be completely unknown Concerning subsidies to the groups in the to the party. Gifts from anonymous donors fall Municipal Councils and County Councils, to the Treasury, regardless of amount. Donors according to the proposal they will be awarded who can be traced relatively easily, are not and paid by the municipality/county. regarded as anonymous. Gifts from non- Therefore, it is regarded as the most anonymous donors fall to the party and shall be appropriate that the groups who think reported according to the rules contained in unreasonable discrimination has taken place in Section 19. Reference is also made to the the determination and who wish to appeal shall discussion under “Remarks by the Ministry” in do it in the form of a lawful appeal in Chapter 6 above. accordance with Section 59. The County Ordinary contributions given by way of Governor will have the authority to rescind the lotteries, collecting boxes, silver collections at decision if it is invalid. membership meetings etc. are not regarded as anonymous contributions. Re. Section 16 Regulation The prohibition in the third subsection, This is a new provision. Several Acts operate litra a) against receiving contributions from with amount limits with the aim of avoiding legal entities under the control of the state or collection and payment of very small amounts. other public authorities are included according For example, Section 24 No.2 of the Payment to model in the European Council’s of Tax Act establishes that repayment of tax Recommendation 2003/4 Article 5c. The shall not take place for amounts under NOK provision does not state precisely what legal 20. Tax arrears under NOK 100 are not entities are included. Since the purpose is to collected, cf. Section 23, No. 1. In the prevent behaviour similar to corruption and comments by the consultative bodies of 7 July flow of public funds to individual parties 2003 on a new Tax Collection Act, the outside the general subsidy system, it is Ministry of Finance proposed that the exact assumed that there are no grounds to attach amount limits shall be removed from the Act any particularly restrictive interpretation to the and rather included in a Regulation to make for provision. flexibility and the possibility of adjusting the Foreign donors in the third subsection, litra amounts over time as the value of money is b) can be both natural and legal persons. The reduced. It is assumed that the minimum limit purpose is to prevent behaviour similar to for payment of voting subsidies is set relatively corruption and illegal activity through gifts – low (including to 0, cf. the wishes of the where it is difficult to determine the identity or Pensioner Party. The minimum limit should be motives of the donor(s) behind the gifts. evaluated in relation to administrative costs for Regarding private persons who are not paying the subsidies. Norwegian citizens, the requirement for voting rights in accordance with Section 2-1 and 2-2 Chapter 4 Support from others, of the Election Act entails that voting age must reporting of the parties’ income and have been attained. A legal entity is regarded sources of income. Publication. as foreign if the enterprise or company is registered abroad. Re. Section 17 Access to accept gifts In the last subsection it is emphasised that This is a new provision and it sets it is not significant if the contribution is made ramifications for the parties’ access to accept in the form of monetary or non-monetary contributions.

Re. Section 18 Reporting obligation and allocation of funds between the levels. The reporting period parties have varying practice with regard to The provision extends the reporting obligation party membership and collection and to apply to the parties’ organisations at all administration of income from membership levels, cf. also the remarks to Section 1 third fees. In some parties, funds are transferred to subsection above. The accounting year follows the parties’ various levels according to a fixed the calendar year. distribution key. In such cases, re-allocated In the third subsection there is an income from membership fees shall be entered exception from the obligation to keep and as a transfer from other party organisations. report income accounts according to Section Since the central register is to set up a 19 for party organisations that have had a total consolidated overview of the parties’ income, income of under NOK 10 000 during the year. the income which comes in the form of All state subsidies can be held separate and transfers from other party organisations must apart from “total income”. It is emphasised that be deducted, so that income is not entered in the event the limit of NOK 10 000 is twice. exceeded, all income shall be included in the The third subsection establishes that accounts – including all public subsidies contributions also include contributions which (except group and representative subsidies), cf. are given in another form than cash, i.e. in the also Section 19. form of services, loan of objects, rebates etc. An exception is made for ordinary voluntary Re. Section 19 Reportable income group work and other efforts by members and The first subsection establishes that all types of volunteers. The exception does not include income shall be reported. Under each of the services which the donor is normally paid for, main categories there is therefore set up a i.e. which is a part of the donor’s income basis. column for “Other”. The second subsection The fourth subsection entails a restriction contains a specification of the different types of the main rule that also non-monetary of income that shall be reported. services shall be reported. It is established The first main group is state subsidies. there that contributions which do not exceed Ordinary state subsidies according to the Party the threshold value for identification of donors Act, cf. litra a, are entered here. Municipal and in Section 20, do not need to be valued and county support which the municipality or reported. county allocates to the party organisations on a Voluntary reporting can be done by party voluntary basis, shall be entered under letter b. organisations which fall under the exception This does not concern support to the parties’ provision in Section 18, third subsection of the groups in the democratic bodies. These groups Act. If voluntary reporting is chosen as an are not obligated to submit an income report alternative to declaration, this must be declared according to this Act. Other support, for separately in the report. Section 19 shall be example, support a party has received upon complied with. application for special projects, can be entered Political lists do not fall under the Act. The under letter c. system nevertheless allows that such lists can Income from own activities is the next undertake reporting according to Section 19. If main group, set up in typical categories. voluntary reporting shall be able to be Concerning collection actions etc. it must be compared with the accounts from registered assumed that individual contributions of political parties, the requirements of the Act greater value shall be entered as contributions shall be complied with as far as possible. from others. Contributions from others include all types Re. Section 20 Identification of donations and of financial contributions, both from natural donors persons and legal entities, which are not state The rule contained in the first subsection subsidies or income from own activities. establishes an obligation for parties at the Typical categories are set up with a column for national level to identify the donors of gifts to other. a value of NOK 30 000 or more. According to Finally, there is a category which consists current law this obligation is applicable to gifts of transfers from other organisations in the having a value of NOK 20 000 or more. It is party. Many parties have a system for re- proposed that the limit is raised to NOK

30 000 for gifts to the central organisations. submitted to this register within the deadline The amount limits for parties at the regional stated in Section 18, subsection two. level is proposed set at NOK 20 000 and at the It is assumed that the information reported municipal level to NOK 10 000. The amount shall be made available on SN’s Internet limit applies to the total of the donations website. It shall be possible to search for throughout the year, i.e. the period from 1 information both regarding individual January to 31 December. organisations on the municipal and county It is regarded as sufficient for level and about the parties on an aggregate identification that the donor is stated by name level. It is otherwise not regarded as and municipality of residence, as established in appropriate to make further statutory the second subsection. The presentation must requirements as to how the information shall be so clear that it is evident which donor has be handled and presented. donated which amount. The register of donors will contain sensitive personal information such as this is defined in Section 2 of the Personal Re. Section 21 Declarations, signatures and Information Act. This means that a separate auditor approval statutory basis is required for setting up the The first and third subsections continue present register and publication of the information, cf. law. The second subsection introduces a new Sections 8 and 9 of the Personal Information requirement. The party or the party Act. It is assumed that the proposal for organisation shall here indicate whether any Sections 20 and 22 will form a sufficient agreements of any kind have been entered into statutory basis. The Personal Information Act with any of the donors who have made will be applicable in all other respects. financial contributions to the party and who The third subsection provides a statutory fall under the definition of income according to basis to issue Regulations for how reporting Section 19. A declaration must also be made of shall be done more concretely in practice. the donors with whom agreements have been entered into. It is an assumption that the Re. Section 23 Inspection of the parties’ agreements are in writing, so that it will be accounts possible to practise the rule regarding Those wishing to inspect only have a right of inspection. It is assumed that anyone will have inspection of the income accounts such as they the right of inspection of any agreements that exist in accordance with internal guidelines. have been declared, if a request is made for it. The practical arrangements for inspection will It is emphasised that the declaration only be a matter between the party/party concerns agreements entered into with donors organisation and those requesting inspection. who have supported the party financially, and No arrangements have been made for control where the contribution(s) are defined as or appeal systems. “income” in accordance with Section 19 of this Act. The third subsection regulates the Chapter 5 Board for allocation of municipal and county party organisations. subsidies, appeals, etc. Auditor approval here is regarded as a disproportionate requirement, particularly with Re. Section 24 Board for allocation of regard to the fact that many organisations are subsidies and appeals very small. If the person entitled to receive The provision establishes that a separate Party party subsidies signs together with another Act Board shall be appointed with a member of the Board, this is regarded as being supervisory role linked to various sufficient. administrative tasks according to the Party Act. The Board takes over the tasks of the Appeal Re. Section 22 Publication Board in Chapter 5 of the Election Act and the The provision establishes that a central central impartial committee according to the reporting register shall be set up in accordance guidelines P-650 of 23.5.1993 on the subsidy with this Act. The parties’ (and party system for political parties, Roman numeral I, organisations’) annual income reports are F.

The Board shall consider appeals against Re. Section 28 Force and effect and the allocation of subsidies and appeals transitional rules regarding circumstances in connection with The Ministry assumes that implementation will registration which at present falls under the take place so that the Act may come into Appeals Board according to the Election Act. partial force and effect from 1.7.2005. In the It shall also make decisions regarding implementation of the new Act the parties will withholding of subsidies to the parties or party be required to report income they receive after organisations who have not met the 1.1.2005. This will initially mean that donors requirements of the Act within the set making gifts above the statutory free limits deadlines, either on its own initiative or on the will be named with retroactive effect. It is recommendation of the Ministry. The Board assumed that the parties will give those who shall present an annual report on its activities wish to do so, the opportunity to reclaim their to the Ministry. gifts. An Act in this area has also previously been passed with retroactive effect. The Re. Section 25 Composition of the Board present Act (22 May 1998 No. 30) came into In order to ensure that the Board has a neutral force and effect for the whole of 1998 by and independent status, it shall be appointed by Royal Decree of the same date. The other parts the King in Council. To ensure continuity, of the Act shall come into force and effect members shall be appointed for a six-year from 1.1.2006, Chapter 5 of the Election Act is period. Replacing all members at the same repealed on the same date. time should be avoided. It is important that the old Act on The chairperson of the Board shall have publication of political parties’ income is not judge competence. The Act does not lay down repealed when the new one comes into force what type of competence the other members and effect, but continues in force right up until shall be in possession of. It is assumed, as far income accounts shall be submitted for the first as is possible, that some of the members are time in accordance with the new Act. That is to appointed among persons with broad and say that central party organisations shall be varied political experience, who can contribute obligated to report income for 2004 in to providing the Board with democratic accordance with the old Act. It is proposed that legitimacy. the King is given authority to decide the date of repeal of the old Act. Re. Section 26 The Board’s annual report The Ministry assumes that there can be a In the annual report the Board shall describe its necessity for transitional rules and has included activity and the cases it has had for a statutory basis for the Ministry to issue them. consideration during the year, cf. Section 24. It is assumed that in the annual report the Board, in addition to the mandatory content, makes The Ministry of Government Administration additions and comments it finds relevant. and Reform

Re. Section 27 Regulation recommends: It is assumed that a need will arise for further regulation of the activity the Party Act Board That Your Majesty grants Royal Assent to, shall be assigned, beyond what follows directly and signs a proposal for a Bill to Parliament from this Act. The second sentence provides for an Act on certain circumstances concerning the statutory basis to regulate both whether the political parties (Party Act). there shall be a right of appeal regarding these questions, and who shall be the appeal authority. It is assumed that the Ministry shall ______evaluate the necessity and content of the regulations further.

Chapter 6 Force and effect and transitional rules

We, HARALD, King of Norway

G r a n t R o y a l A s s e n t t o:

A request that Parliament pass an Act on certain circumstances concerning the political parties (the Party Act) in accordance with the attached Bill.

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Proposal for an Act on certain circumstances concerning the political parties (Party Act)

Chapter 1 Introductory provisions been registered in the Register for Legal Entities, the information registered there is Section 1 Purpose and scope of the Act used as the basis for the Register of political (1) The purpose of the Act is: parties. - to lay down rules for elections to (3) Registration in the Register of Political P Parliament, County Councils and arties entails that the party receives the sole Municipal Councils in accordance with right to present election lists under the the Act of 28 June 2002 No. 57 registered name. (Election Act) through a public registration arrangement for the Section 3 Conditions for registration of party political parties, names in the Register of political parties - to establish limits for the parties’ (1) So that the party name shall be able to be financial circumstances which registered in the Register of Political Parties, it contribute to ensure a financial basis must not be able to be confused with the name for them through state subsidies and of otherwise contribute to increase the a) another party registered in the Register parties’ self-financing capability and of Political Parties, or independence and b) a Sami political entity registered with - to ensure the public’s right of the Sami Parliament inspection and to counteract corruption When special grounds are present, the and undesirable ties by transparency registration authorities can also refuse to regarding the financing of the political register a party name parties’ activities. (2) The party shall submit the following (2) The King may issue regulations regarding documentation together with the application the application of the Act on Svalbard and can (a) memorandum of association lay down special rules under consideration of (b) information regarding the persons who the circumstances there. have been elected members of the (3) Chapters 3 and 4 apply to parties that are party’s executive board, and who has registered in accordance with Chapter 2. the authority to represent the party centrally in matters relating to this Act. Chapter 2 Registration of political (c) bye-laws laying down which body in parties the party elects the party’s executive Section 2 Registration authority. Effects of board, and registration (d) a declaration from at least 5 000 (1) A political party that meets the persons with voting rights at a general requirements in Section 3 can apply for election, that they wish the party name registration of the party name in the Register of to be registered. Those making the Political Parties, which is kept by the declaration must have attained voting Brønnøysund Register Centre. age by the end of the calendar year in (2) Before the party can be registered in the which the application is submitted. If Register of political parties it must be the application is submitted less than registered in the Register of Business one year before an election, it is Enterprises and assigned an enterprise number, sufficient that voting age is attained by cf. Section 5 in the Central Co-ordinating the end of the election year. The Register for Legal Entities. When the party has declaration shall contain the name, date of birth, and address of the person

giving it. The declaration shall be (2) By 2 January of the election year, the signed and dated by hand by the parties shall submit updated information or person giving it. No declaration shall confirmation of the information that is be more than one year older than the registered in the Register of Political Parties, application. about who are members of the party’s (3) The application must have been recorded executive board with effect for the election. with the registration authorities by 2 January of The registration authority shall in good time the election year, in order for the registration to before the deadline inform the parties of the be in effect at the election. information that is registered in the Register of Political Parties. Section 4 Change of registered party name. Merging of parties under a new name Section 7 Publication of decisions (1) A registered political party can apply to The registration authority shall publicise have the registered party name changed. The decisions regarding registration of new party provisions in Section 3 also apply. As a names or removal of names from the Register replacement for the memorandum of of Political Parties. association, the minutes of a meeting where the decision was taken to change the name of the Section 8 Appeal party shall be enclosed. If the party received at (1) The registration authority’s decisions least 500 votes in one county or at least 5 000 according to this chapter can be appealed to the votes in the whole of the country at the last Party Act Board, cf. Chapter 5. The deadline general election, the conditions in Section 3, for lodging an appeal is three weeks. The second subsection, litra d, do not apply. appeal is made to the registrar and shall be in (2) If two or more registered parties merge writing and justified. The Board shall notify and seek registration under a new name, it is the registrar of decisions in appeals. The regarded as an application for change of name. Board’s decision in appeals shall be publicised. As a replacement for the memorandum of (2) The Party Act Board’s decision can be association, the minutes of a meeting where the brought before the courts for decision. Legal decision was taken to change the name of the proceedings must in that case be instituted party shall be enclosed. If one of the parties within 2 weeks from the time the notification received at least 500 votes in one county or at of the Board’s decision with information on least 5 000 votes in the whole of the country at the deadline for instituting legal proceedings the last general election, the conditions in was received by the party in question. A legal Section 3, second subsection, litra d, do not decision regarding party registration is only apply. effective for a coming election if it is legally binding at the latest 31 March in the election Section 5 Deregistration. When a party name year. Until any legally binding court decision is freed is available, the Board’s decision will be valid (1) The effect of registration ceases and the in relation to the Register of Political Parties. party name is freed when the party has not presented a list in any election district for two Section 9 Regulation consecutive general elections. The party name The Ministry can by regulation give shall then be struck off the Register of Political supplementary provisions regarding Parties. registration and on the registration authorities’ (2) The same applies four years after the party activities. has been dissolved or has changed its name. Chapter 3 Financing of political parties’ Section 6 Information regarding who is elected organisations and democratic groups to the party’s executive board (1) In the event of change of previously Section 10 Superior principles for state registered information, registered parties shall subsidies inform the Brønnøysund Register Centre (1) State subsidies to political parties’ about who are members of the party’s organisations at the national, regional and executive board. municipal level are granted in the amounts that are decided by Parliament.

(2) Parliament finances the democratic groups paid as an equal amount to parties that at the in Parliament. The county councils finance the last county council election obtained at least democratic groups in the county councils. The 4% of the votes in the county or that had at municipalities finance the democratic groups least one representative elected to the county in the municipal councils. The subsidies to the council. Of the total subsidies, 9/10 are paid as democratic groups in the county councils and vote subsidies and 1/10 is paid as basic municipal councils shall be granted subsidies. proportionately according to their voter (3) The county youth organisation of a party support in the election. that is entitled to vote subsidies, can apply for (3) There shall be no conditions attached to state subsidies. The subsidies are paid as an subsidies from the state, municipality or equal amount per vote the party received at the county that can come into conflict with the last county council election. political parties’ independence and autonomy. (4) The application is submitted to the County (4) The authorities shall not exercise control Governor. The application for subsidies the of the parties’ or groups’ use of the subsidies. first year after an election is regarded as being for the whole election period as long as t he Section 11 State subsidies to political parties’ applicant does not notify otherwise during the organisations and youth organisations at the period. The support is paid by the County national level Governor to the parties’ county organisations (1) Political parties can apply to the Ministry and youth organisations. for state subsidies for the party’s organisation (5) Common lists, consisting of parties all of at the national level. The subsidies are paid as which meet the requirements contained in vote subsidy and basic subsidy. Chapter 2, can apply for vote subsidies and (2) Vote support is paid as an equal amount basic subsidies. The support is calculated in for each vote obtained at the last general accordance with the second subsection. The election. Basic subsidies are paid with an equal parties’ compromise proposal for allocation is krone amount to parties that at the last general the basis for payments. If the parties on the election received at least 2.5% of the votes on common list are themselves not in agreement a national basis or that had at least one regarding allocation, the subsidies shall be representative elected to Parliament. Of the allocated in a discretionary manner, based on total subsidies, 9/10 are paid as vote support the number of votes for the parties on a and 1/10 as basic subsidies. national basis or according to the number of (3) The central youth organisation of a votes at a previous election. political party that is entitled to vote subsidy, can apply to the Ministry for state subsidies. Section 13 State subsidies to political parties’ The support is paid as an equal amount per organisations in the municipalities vote the party obtained at the last general (1) A municipal organisation of a party can election. apply for subsidies. Subsidies are paid as vote (4) The application for subsidies the first year subsidies and basic subsidies. The party after an election is regarded as being for the organisations in Oslo can apply for support whole election period as long as the applicant both as a municipal organisation and as a does not notify otherwise during the period. county organisation, cf. Section 12. (2) Vote support is paid as an equal amount Section 12 State subsidies to political parties’ per vote received in the municipality at the last organisations and youth organisations in the municipal council election. Basic subsidies are counties paid as an equal amount to parties that at the (1) A county organisation of a party can apply last municipal council election received at least for subsidies. Subsidies are paid as vote 4% of the votes in the municipality or that had subsidy and basic subsidy. The party at least one representative elected to the organisations in Oslo can apply for subsidies municipal council. Of the total subsidies 9/10 both as a county organisation and as a are paid as vote support and 1/10 as basic municipal organisation, cf. Section 13. subsidies. (2) Vote subsidy is paid as an equal amount (3) The application shall be submitted to the per vote obtained in the county at the last County Governor. Applications for subsidies county council election. Basic subsidies are the first year after an election are regarded as

being for the whole election period as long as a) legal entities under the control of the applicant does not notify otherwise during the state or other public authority, the period. The subsidies are paid by the (b) foreign donors, i.e. private persons County Governor to the parties’ municipal who are not Norwegian citizens or organisations. who do not meet the requirements (4) Common lists, consisting of parties all of for voting rights at municipal which meet the requirements contained in council and county council Chapter 2, can apply for vote subsidies and elections, cf. Section 2-2 of the basic subsidies. The support is calculated in Election Act, or legal entities that accordance with the second subsection. The are registered abroad. parties’ compromise proposal for allocation is (4) By donations in this provision is meant any the basis for payments. If the parties on the form of support that the party is obligated to common list are themselves not in agreement report in accordance with Section 19. regarding allocation, the subsidies shall be allocated in a discretionary manner, based on Section 18 Reporting obligation and reporting the number of votes for the parties on a period national basis or according to the number of (1) All political parties, including votes at a previous election. organisational levels of parties that fall under this Act, shall submit annual reports of their Section 14 The Ministry’s access to withhold income. state subsidies (2) Reporting shall include income for the The Ministry can set as a condition for period 1 January to 31 December and shall be payment of state subsidies to a party or party submitted at the latest six months after the end organisation that it has undertaken reporting in of the accounting year. accordance with the rules in Chapter 4. (3) Parties or party organisations that during the year have had a total income of under NOK 10 000 after deduction of state subsidies are Section 15 Appeal against a decision on state exempt from the obligation to give a subsidies declaration that the income for the year has A decision regarding allocation of state been under that amount. subsidies can be appealed to the Party Act (4) Reporting of income accounts in Board, cf. Chapter 5, within three weeks after accordance with Section 19, or declarations in it was made. The Board’s decision can be accordance with the third subsection in this brought before the courts for decision. section shall be submitted to the central register for the system. Section 16 Regulation The Ministry can issue Regulations that Section 19 Income that is to be reported vote subsidies shall not be paid under a certain (1) The report shall contain a complete amount. overview of the income that the parties or party organisations have received during the period. (2) Income shall be categorised in the Chapter 4 Support from others. following manner: Reporting of parties’ income and State subsidies: sources of income. Publication (a) State subsidies according to Chapter 3 (b) Municipal/county party subsidies Section 17 Access to receive gifts (c) Other public support (1) Everyone is allowed to give donations to Income from own activities: political parties within the limits set out in this d) Income from membership fees provision. e) Income from lotteries, collection (2) Political parties cannot accept donations if actions etc, the donor is not known to the party f) Capital income (anonymous donations). Such donations fall to g) Income from business activities the Treasury. h) Other income (3) Political parties are not allowed to accept Donations from others: gifts from: i) Private persons

j) Commercial enterprises The party or the party organisation is obligated k) Industrial organisations upon request to allow inspection of agreements l) Other organisations, associations and entered into with donors. groups, institutions, foundations and (3) Reports by the party’s central organisation funds shall be signed by the party Chairman and be m) Others approved by an auditor. Internal transfers: (4) Reporting, including a declaration n) Transfers from other party according to Section 18, subsection three by organisations the parties or party organisation at the (3) By donations is meant money municipal and county level, shall be signed by contributions and the value of goods, services the person applying for or receipting for party and other equivalent contributions which have subsidies in accordance with Chapter 3 and been received free of charge or at a reduced one other Board member. Approval by an price. Contributions by private persons who auditor is not necessary. perform ordinary voluntary group work which does not require particular qualifications, or Section 22 Publication which is not a part of the donor’s income basis, (1) A central register for reports shall be set up are not regarded as donations. The same in accordance with this Act. applies to loan of premises and objects by (2) The central register shall collocate private persons who do not have them as part information about the parties’ income and of their income basis. sources of income and make this publicly (4) Other contributions than monetary shall be available in an appropriate manner, i.e. through valued at sales value and reported as income. the use of electronic aids. The register shall Such contributions that are under the set forward an overview to the Party Act Board amount limits in Section 20, first subsection, and the Ministry, of parties or party can nevertheless be excepted. organisations that have not complied with the reporting requirement by the deadline. Section 20 Identification of donations and (3) Further rules on the method of reporting donors and the organisation of the central register are (1) If a donor during the period has given one set out in a Regulation issued by the Ministry. or more donations to the party’s central organisation, and which represent a total of Section 23 Inspection of the parties’ accounts NOK 30 000 or more, the value of the The parties or party organisations which donations and name of the donor shall be fall under this Act, are obligated upon request declared separately. The same applies to to allow inspection of the accounts which have donations to the party organisations at county been prepared for the last year. level, which represent a total of NOK 20 000 or more, and for donations to party Chapter 5 Appeals Board, etc. organisations at the municipal level, which represent a total of NOK 10 000 or more. Section 24 Board for allocation of subsidies Donations to the parties’ youth organisations and appeals are subject to the same rules as for donations to (1) The Party Act Board is an independent the parent party at the equivalent level. administrative body subordinate to the King (2) Private persons shall be identified by name and the Ministry. The King and the Ministry and municipality of residence. Other donors cannot issue instructions for, or reverse the shall be identified by name and postal address. Party Act Board’s exercise of authority in individual cases in accordance with the Act. Section 21 Declarations, signature and auditor (2) The Party Act Board shall: approval a) interpret the applicable rules (1) The report shall contain a declaration that b) make decisions regarding withholding the party or party organisation has not had of subsidies other income than that stated. c) decide appeals against decisions (2) If any political or business agreements regarding registration, cf. Section 8 have been entered into with any donor, a d) decide appeals against decisions declaration of this shall be made in the report. regarding allocation of state subsidies,

cf. Section 15.

Section 25 Composition of the Board The members of the Board shall be appointed by the King in Council for a period of six years. The Board shall have at least five members. The chairperson shall have judge competence.

Section 26 The Board’s annual report The Board shall submit an annual report on its activities. The report shall be submitted to the Ministry by 1 October.

Section 27 Regulation The Ministry can issue further provisions regarding the Board’s activities in a Regulation. The Ministry can also issue a Regulation regarding the right of appeal against the Board’s decisions in cases regarding inspection of documents in accordance with the Administration Act and Open Files Act, and case costs according to Section 36 of the Administration Act.

Chapter 6 Force and effect and transitional rules Section 28 Force and effect and transitional rules (1) The Act comes into force and effect on the date decided by the King. On the same date, Chapter 5 of the Act of 28 June 2002 No. 57 relating to election to Parliament, county councils and municipal councils (Election Act) is repealed. (2) The King decides when the Act of 22 May 1998 No. 30 relating to publication of political parties’ income shall be repealed. (3) The Ministry can issue further transitional rules.

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