European Union Referendum Bill (HC Bill 6)

European Union Referendum BillPage 20

Enforcement

28 (1) Section 145(1)(a) and (6A) of the 2000 Act (general functions of Electoral
Commission with respect to compliance) apply in relation to the
requirements imposed by this Schedule as they apply in relation to the
5requirements referred to in section 145(1)(a).

(2) Sections 151 and 154 of the 2000 Act (summary proceedings, and duty of
court to report conviction to Electoral Commission) apply in relation to an
offence under this Schedule as they apply in relation to an offence under that
Act.

(3) 10In Schedule 19B to the 2000 Act (investigatory powers of Electoral
Commission), the references in paragraphs 3 to 5 to an offence under that
Act include an offence under this Schedule.

(4) Schedule 19C to the 2000 Act (civil sanctions), and any order under Part 5 of
that Schedule, have effect as if the offences under paragraph 23(9) of this
15Schedule were offences prescribed in an order under that Part.

Section 3

SCHEDULE 2 Control of loans etc to permitted participants

Control of loans etc to permitted participants

1 For the purposes of the referendum, the 2000 Act has effect as if after
20Schedule 15 (in Part 7 of that Act) there were inserted—

Schedule 1 Control of loans etc to certain permitted participants

Part 1 Introductory
25Introductory

1 (1) This Schedule has effect for controlling regulated transactions
entered into by permitted participants that either are not
registered parties or are minor parties.

(2) Accordingly, in the following provisions of this Schedule
30references to permitted participants do not include a permitted
participant which is a registered party other than a minor party.

(3) In this Schedule—

  • “connected transaction” has the meaning given by paragraph
    2(9);

  • 35“credit facility” has the meaning given by paragraph 2(11);

  • “non-qualifying person” means a person who is not a
    qualifying person;

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  • “qualifying person” has the meaning given by paragraph
    4(2);

  • “regulated transaction” has the meaning given by paragraph
    2.

5Regulated transactions

2 (1) An agreement between a permitted participant and another
person by which the other person makes a loan of money to the
permitted participant is a regulated transaction if the use
condition is satisfied.

(2) 10An agreement between a permitted participant and another
person by which the other person provides a credit facility to the
permitted participant is a regulated transaction if the use
condition is satisfied.

(3) Where—

(a) 15a permitted participant and another person (“A”) enter
into a regulated transaction of a description mentioned in
sub-paragraph (1) or (2), or a transaction under which any
property, services or facilities are provided for the use or
benefit of the permitted participant (including the services
20of any person),

(b) A also enters into an arrangement whereby another person
(“B”) gives any form of security (whether real or personal)
for a sum owed to A by the permitted participant under the
transaction mentioned in paragraph (a), and

(c) 25the use condition is satisfied,

the arrangement mentioned in paragraph (b) is a regulated
transaction.

(4) An agreement or arrangement is also a regulated transaction if—

(a) the terms of the agreement or arrangement as first entered
30into do not constitute a regulated transaction by virtue of
sub-paragraph (1), (2) or (3), but

(b) the terms are subsequently varied in such a way that the
agreement or arrangement becomes a regulated
transaction.

(5) 35“The use condition” is that the permitted participant intends at the
time of entering into a transaction mentioned in sub-paragraph
(1), (2) or (3)(a) to use any money or benefit obtained in
consequence of the transaction for meeting referendum expenses
incurred by or on behalf of the permitted participant.

(6) 40For the purposes of sub-paragraph (5), it is immaterial that only
part of the money or benefit is intended to be used for meeting
referendum expenses incurred by or on behalf of the permitted
participant.

(7) References in sub-paragraphs (1) and (2) to a permitted participant
45include references to an officer, member, trustee or agent of the
permitted participant if that person makes the agreement as such.

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(8) References in sub-paragraph (3) to a permitted participant include
references to an officer, member, trustee or agent of the permitted
participant if the property, services or facilities are provided to
that person as such, or the sum is owed by that person as such.

(9) 5A reference in this Schedule to a connected transaction is a
reference to the arrangement mentioned in sub-paragraph (3)(b).

(10) In this paragraph a reference to anything being done by or in
relation to a permitted participant or a person includes a reference
to its being done directly or indirectly through a third person.

(11) 10A “credit facility” is an agreement whereby a permitted
participant is enabled to receive from time to time from another
party to the agreement a loan of money not exceeding such
amount (taking account of any repayments made by the permitted
participant) as is specified in or determined in accordance with the
15agreement.

(12) An agreement or arrangement is not a regulated transaction—

(a) to the extent that a payment made in pursuance of the
agreement or arrangement falls, by virtue of paragraph 9
of Schedule 15, to be included in a return under section 120
20(or would do so but for section 120A), or

(b) if its value is not more than £500.

Valuation of regulated transaction

3 (1) The value of a regulated transaction which is a loan is the value of
the total amount to be lent under the loan agreement.

(2) 25The value of a regulated transaction which is a credit facility is the
maximum amount which may be borrowed under the agreement
for the facility.

(3) The value of a regulated transaction which is an arrangement by
which any form of security is given is the contingent liability
30under the security provided.

(4) For the purposes of sub-paragraphs (1) and (2), no account is to be
taken of the effect of any provision contained in a loan agreement
or an agreement for a credit facility at the time it is entered into
which enables outstanding interest to be added to any sum for the
35time being owed in respect of the loan or credit facility, whether or
not any such interest has been so added.

Part 2 Controls on regulated transactions
Regulated transactions with non-qualifying persons

4 (1) 40A permitted participant must not—

(a) be a party to a regulated transaction to which a person who
is not a qualifying person is also a party;

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(b) derive a benefit in consequence of a connected transaction
if any of the parties to that transaction is not a qualifying
person.

(2) In this Schedule, “qualifying person” means—

(a) 5a permissible donor falling within section 54(2) (but see
sub-paragraph (3));

(b) a Gibraltar elector;

(c) any body falling within any of paragraphs (b) to (g) of
section 54(2A);

(d) 10a body incorporated by Royal Charter which does not fall
within section 54(2);

(e) a charitable incorporated organisation within the meaning
of Part 11 of the Charities Act 2011 or Part 11 of the
Charities Act (Northern Ireland) 2008;

(f) 15a Scottish charitable incorporated organisation within the
meaning of Chapter 7 of Part 1 of the Charities and Trustee
Investment (Scotland) Act 2005 (asp 10)2005 (asp 10);

(g) a partnership constituted under the law of Scotland which
carries on business in the United Kingdom.

(3) 20In relation to transactions entered into by a permitted participant
other than a designated organisation, the reference in sub-
paragraph (2) to a permissible donor falling within section 54(2)
does not include a registered party.

(4) In this paragraph “designated organisation” has the meaning
25given by section 110(5).

Effect of transaction with non-qualifying person

5 (1) This paragraph applies if a permitted participant is a party to a
regulated transaction to which a non-qualifying person is also a
party.

(2) 30The transaction is void.

(3) Despite sub-paragraph (2)

(a) any money received by the permitted participant by virtue
of the transaction must be repaid by the responsible person
to the person from whom it was received, along with
35interest at the rate referred to in section 71I(3)(a);

(b) the person from whom it was received is entitled to
recover the money, along with such interest.

(4) If—

(a) the money is not (for whatever reason) repaid as
40mentioned in sub-paragraph (3)(a), or

(b) the person entitled to recover the money refuses or fails to
do so,

the Commission may apply to the court to make such order as it
thinks fit to restore (so far as is possible) the parties to the
45transaction to the position they would have been in if the
transaction had not been entered into.

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(5) An order under sub-paragraph (4) may in particular—

(a) where the transaction is a loan or credit facility, require
that any amount owed by the permitted participant be
repaid (and that no further sums be advanced under it);

(b) 5where any form of security is given for a sum owed under
the transaction, require that security to be discharged.

(6) In the case of a regulated transaction where a party other than a
permitted participant—

(a) at the time the permitted participant enters into the
10transaction, is a qualifying person, but

(b) subsequently, for whatever reason, ceases to be a
qualifying person,

the transaction is void and sub-paragraphs (3) to (5) apply with
effect from the time when the other party ceased to be a qualifying
15person.

Guarantees and securities involving non-qualifying persons

6 (1) This paragraph applies if—

(a) a permitted participant and another person (“A”) enter
into a transaction of a description mentioned in
20paragraph 2(3)(a),

(b) A is party to a regulated transaction of a description
mentioned in paragraph 2(3)(b) (“the connected
transaction”) with another person (“B”), and

(c) B is not a qualifying person.

(2) 25Paragraph 5(2) to (5) applies to the transaction mentioned in sub-
paragraph (1)(a).

(3) The connected transaction is void.

(4) Sub-paragraph (5) applies if (but only if) A is unable to recover
from the permitted participant the whole of the money mentioned
30in paragraph 5(3)(a) (as applied by sub-paragraph (2) above),
along with such interest as is there mentioned.

(5) Despite sub-paragraph (3), A is entitled to recover from B any part
of that money (and such interest) that is not recovered from the
permitted participant.

(6) 35Sub-paragraph (5) does not entitle A to recover more than the
contingent liability under the security provided by virtue of the
connected transaction.

(7) In the case of a connected transaction where B—

(a) at the time A enters into the transaction, is a qualifying
40person, but

(b) subsequently, for whatever reason, ceases to be a
qualifying person,

sub-paragraphs (2) to (6) apply with effect from the time when B
ceased to be a qualifying person.

(8) 45If the transaction mentioned in paragraph 2(3)(a) is not a regulated
transaction of a description mentioned in paragraph 2(1) or (2),

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references in this paragraph and paragraph 5(2) to (5) (as applied
by sub-paragraph (2) above) to the repayment or recovery of
money are to be construed as references to (as the case may be)—

(a) the return or recovery of any property provided under the
5transaction,

(b) to the extent that such property is incapable of being
returned or recovered or its market value has diminished
since the time the transaction was entered into, the
repayment or recovery of the market value at that time, or

(c) 10the repayment or recovery of the market value (at that
time) of any facilities or services provided under the
transaction.

Transfer to non-qualifying person

7 If a qualifying person purports to transfer the person’s interest in
15a regulated transaction to a non-qualifying person, the purported
transfer is of no effect.

Part 3 Offences
Offences of knowingly entering into certain transactions

8 (1) 20An individual who is a permitted participant commits an offence
if—

(a) the individual enters into a regulated transaction of a
description mentioned in paragraph 2(1) or (2) to which a
non-qualifying person is also a party, and

(b) 25the individual knew or ought reasonably to have known of
the matters mentioned in paragraph (a).

(2) A permitted participant that is not an individual commits an
offence if—

(a) it enters into a regulated transaction of a description
30mentioned in paragraph 2(1) or (2) to which a non-
qualifying person is also a party, and

(b) an officer of the permitted participant knew or ought
reasonably to have known of the matters mentioned in
paragraph (a).

(3) 35A person who is the responsible person in relation to a permitted
participant that is not an individual commits an offence if—

(a) the permitted participant enters into a regulated
transaction of a description mentioned in paragraph 2(1)
or (2) to which a non-qualifying person is also a party, and

(b) 40the responsible person knew or ought reasonably to have
known of the matters mentioned in paragraph (a).

(4) It is a defence for a person charged with an offence under sub-
paragraph (3) to prove that the person took all reasonable steps to
prevent the permitted participant from entering into the
45transaction.

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Offences of failing to act on finding that transaction was not permitted

9 (1) An individual who is a permitted participant commits an offence
if—

(a) the individual has entered into a regulated transaction of a
5description mentioned in paragraph 2(1) or (2) to which a
non-qualifying person is also a party,

(b) the individual neither knew nor ought reasonably to have
known that the other party is a non-qualifying person,

(c) the individual comes to know of the matters mentioned in
10paragraph (a), and

(d) the individual does not take, as soon as practicable after
coming to know of those matters, all reasonable steps to
repay any money which he or she has received by virtue of
the transaction.

(2) 15A permitted participant that is not an individual commits an
offence if—

(a) it has entered into a regulated transaction of a description
mentioned in paragraph 2(1) or (2) to which a non-
qualifying person is also a party,

(b) 20no officer of the permitted participant knew or ought
reasonably to have known that the other party is a non-
qualifying person,

(c) the responsible person comes to know of the matters
mentioned in paragraph (a), and

(d) 25the responsible person does not take, as soon as practicable
after coming to know of those matters, all reasonable steps
to repay any money which the permitted participant has
received by virtue of the transaction.

(3) A person who is the responsible person in relation to a permitted
30participant that is not an individual commits an offence if—

(a) the permitted participant has entered into a regulated
transaction of a description mentioned in paragraph 2(1)
or (2) to which a non-qualifying person is also a party,

(b) paragraph 8(3)(b) does not apply to the responsible
35person,

(c) the responsible person comes to know of the matters
mentioned in paragraph (a), and

(d) the responsible person does not take, as soon as practicable
after coming to know of those matters, all reasonable steps
40to repay any money which the permitted participant has
received by virtue of the transaction.

Offences of benefiting from certain connected transactions

10 (1) An individual who is a permitted participant commits an offence
if—

(a) 45the individual benefits from, or falls to benefit in
consequence of, a connected transaction to which a non-
qualifying person is a party, and

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(b) the individual knew or ought reasonably to have known of
the matters mentioned in paragraph (a).

(2) A permitted participant that is not an individual commits an
offence if—

(a) 5it benefits from, or falls to benefit in consequence of, a
connected transaction to which a non-qualifying person is
a party, and

(b) an officer of the permitted participant knew or ought
reasonably to have known of the matters mentioned in
10paragraph (a).

(3) A person who is the responsible person in relation to a permitted
participant that is not an individual commits an offence if—

(a) the permitted participant benefits from, or falls to benefit
in consequence of, a connected transaction to which a non-
15qualifying person is a party, and

(b) the person knew or ought reasonably to have known of the
matters mentioned in paragraph (a).

(4) It is a defence for a person charged with an offence under sub-
paragraph (3) to prove that the person took all reasonable steps to
20prevent the permitted participant from benefiting in consequence
of the connected transaction.

Offences of failing to act on finding connected transaction was not permitted

11 (1) An individual who is a permitted participant commits an offence
if—

(a) 25the individual is a party to a transaction of a description
mentioned in paragraph 2(3)(a),

(b) the individual benefits from, or falls to benefit in
consequence of, a connected transaction to which a non-
qualifying person is a party,

(c) 30the individual neither knew nor ought reasonably to have
known of the matters mentioned in paragraphs (a) and (b),

(d) the individual comes to know of those matters, and

(e) the individual does not take, as soon as practicable after
coming to know of those matters, all reasonable steps to
35pay to any person who has provided the individual with
any benefit in consequence of the connected transaction
the value of the benefit.

(2) A permitted participant that is not an individual commits an
offence if—

(a) 40it is a party to a transaction of a description mentioned in
paragraph 2(3)(a),

(b) it benefits from, or falls to benefit in consequence of, a
connected transaction to which a non-qualifying person is
a party,

(c) 45no officer of the permitted participant knew or ought
reasonably to have known of the matters mentioned in
paragraphs (a) and (b),

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(d) the responsible person comes to know of those matters,
and

(e) the responsible person does not take, as soon as practicable
after coming to know of those matters, all reasonable steps
5to pay to any person who has provided the permitted
participant with any benefit in consequence of the
connected transaction the value of the benefit.

(3) A person who is the responsible person in relation to a permitted
participant that is not an individual commits an offence if—

(a) 10the permitted participant is a party to a transaction of a
description mentioned in paragraph 2(3)(a),

(b) the permitted participant benefits from, or falls to benefit
in consequence of, a connected transaction to which a non-
qualifying person is a party,

(c) 15paragraph 10(3)(b) does not apply to the person,

(d) the responsible person comes to know of the matters
mentioned in paragraphs (a) and (b), and

(e) the responsible person does not take, as soon as practicable
after coming to know of those matters, all reasonable steps
20to pay to any person who has provided the permitted
participant with any benefit in consequence of the
connected transaction the value of the benefit.

Arrangements facilitating transactions with non-qualifying persons

12 A person commits an offence if the person—

(a) 25knowingly enters into, or

(b) knowingly does any act in furtherance of,

any arrangement which facilitates or is likely to facilitate, whether
by means of concealment or disguise or otherwise, the
participation by a permitted participant in a regulated transaction
30with a non-qualifying person.

Offences: interpretation

13 A reference in this Part of this Schedule to a permitted participant
entering into a regulated transaction includes a reference to any
circumstances in which the terms of a regulated transaction are
35varied so as to increase the amount of money to which the
permitted participant is entitled in consequence of the transaction.

Penalties

14 (1) A person guilty of an offence under paragraph 8(1) or (2), 9(1),
10(1) or (2) or 11(1) is liable—

(a) 40on conviction on indictment, to a fine;

(b) on summary conviction in England and Wales, to a fine;

(c) on summary conviction in Scotland or Northern Ireland, to
a fine not exceeding the statutory maximum;

(d) on summary conviction in Gibraltar, to a fine not
45exceeding level 5 on the Gibraltar standard scale.

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(2) A person guilty of an offence under paragraph 8(3), 9(2) or (3),
10(3), 11(2) or (3) or 12 is liable—

(a) on conviction on indictment, to imprisonment for a term
not exceeding 12 months or to a fine, or to both;

(b) 5on summary conviction in England and Wales, to
imprisonment for a term not exceeding 12 months or to a
fine, or to both;

(c) on summary conviction in Scotland, to imprisonment for a
term not exceeding 12 months or to a fine not exceeding the
10statutory maximum, or to both;

(d) on summary conviction in Northern Ireland, to
imprisonment for a term not exceeding 6 months or to a
fine not exceeding the statutory maximum, or to both;

(e) on summary conviction in Gibraltar, to imprisonment for
15a term not exceeding 12 months or to a fine not exceeding
level 5 on the Gibraltar standard scale, or to both.

(3) The reference in sub-paragraph (2)(b) to 12 months is to be read as
a reference to 6 months in relation to an offence committed before
the commencement of section 154(1) of the Criminal Justice Act
202003.

(4) In this paragraph “the Gibraltar standard scale” means the
standard scale set out in Part A of Schedule 9 to the Criminal
Procedure and Evidence Act.

Part 4 25Reporting of regulated transactions
Statement of regulated transactions

15 (1) The responsible person in relation to a permitted participant must
include in any return required to be prepared under section 120 a
statement of regulated transactions entered into by the permitted
30participant.

(2) The statement must comply with paragraphs 16 to 20.

(3) For the purposes of those paragraphs a regulated transaction is a
“recordable transaction”—

(a) if the value of the transaction is more than £7,500, or

(b) 35if the aggregate value of it and any other relevant benefit
or benefits is more than that amount.

In paragraph (b) “relevant benefit” means any relevant donation
(within the meaning of Schedule 15) or regulated transaction
made by, or entered into with, the person with whom the
40regulated transaction was entered into.

Information about qualifying persons

16 (1) The statement must record, in relation to each recordable
transaction to which a qualifying person was a party—

(a) the information about the qualifying person which is, in
45connection with transactions entered into by registered