06193.14-20

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

14

Clause 59
64
Page 63, line 22, leave out “member of the House of Commons” and insert “holder

of a relevant elective office unless he is not a member of a registered party and is

either—

(a)
a member of the Scottish Parliament, or

(b)
a member of a local authority in Scotland.”
65
Page 63, line 25, leave out “member of the House of Commons” and insert “holder

of the relevant elective office”
66
Page 63, line 30, leave out “member of the House of Commons” and insert “holder

of a relevant elective office”
67
Page 63, line 31, leave out “House of Commons” and insert “relevant body”
68
Page 63, line 32, leave out “member” and insert “holder of the office”
69
Page 63, line 38, at end insert—

“   (3)
In sub-paragraph (1)(a) a relevant body is—

(a)
if the holder of a relevant elective office is a member of a body

mentioned in paragraphs (a) to (f) of paragraph 1(8), that body;

(b)
if the holder of a relevant elective office is the Mayor of London,

the London Assembly;

(c)
if the holder of a relevant elective office is an elected mayor

within the meaning of Part 2 of the Local Government Act 2000,

the local authority of which he is the mayor.””
70
Page 63, line 40, leave out “members of the House of Commons” and insert “the

holders of a relevant elective office”
71
Page 64, line 2, leave out “members” and insert “holders of relevant elective office”
72
Page 64, line 2, at end insert—

“(5)
In subsection (4) references to the holder of a relevant elective office must

be construed in accordance with Schedule 7 to the 2000 Act.”
After Clause 60
73
Insert the following new Clause—

“Regulation of loans etc

(1)
After Part 4 of the 2000 Act insert—

“Part 4A

Regulation of loans and related transactions

71F
Regulated transactions

(1)
In this Part, a reference to a regulated transaction must be construed

in accordance with this section.

(2)
An agreement between a registered party and another person by

which the other person makes a loan of money to the party is a

regulated transaction.

15

(3)
An agreement between a registered party and another person by

which the other person provides a credit facility to the party is a

regulated transaction.

(4)
Where—

(a)
a registered party and another person (A) enter into a

regulated transaction of a description mentioned in

subsection (2) or (3) or a transaction under which any

property, services or facilities are provided for the use or

benefit of the party (including the services of any person),

and

(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 party under the transaction

mentioned in paragraph (a),


the arrangement is a regulated transaction.

(5)
An agreement or arrangement is also a regulated transaction if—

(a)
the terms of the agreement or arrangement as first entered

into do not constitute a regulated transaction by virtue of

subsection (2), (3) or (4), but

(b)
the terms are subsequently varied in such a way that the

agreement or arrangement becomes a regulated transaction.

(6)
References in subsections (2) and (3) to a registered party include

references to an officer, member, trustee or agent of the party if he

makes the agreement as such.

(7)
References in subsection (4) to a registered party include references

to an officer, member, trustee or agent of the party if the property,

services or facilities are provided to him, or the sum is owed by him,

as such.

(8)
Except so far as the contrary intention appears, references to a

registered party in the context of—

(a)
the making of a loan to a registered party,

(b)
the provision of a credit facility to a registered party, or

(c)
a sum being owed by a registered party,


must, in the case of a party with accounting units, be construed as

references to the central organisation of the party or any of its

accounting units.

(9)
A reference to a connected transaction is a reference to the

transaction mentioned in subsection (4)(b).

(10)
In this section a reference to anything being done by or in relation

to a party or a person includes a reference to its being done directly

or indirectly through a third person.

(11)
A credit facility is an agreement whereby a registered party 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 registered party) as is

specified in or determined in accordance with the agreement.

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

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(a)
to the extent that in accordance with any enactment a

payment made in pursuance of the agreement or

arrangement falls to be included in a return as to election

expenses in respect of a candidate or candidates at a

particular election, or

(b)
if its value is not more than £200.

(13)
The Secretary of State may, by order, specify circumstances or any

description of circumstances in which an agreement or

arrangement falling within any of subsections (2) to (5) is not a

regulated transaction.

71G
Valuation of regulated transaction

(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)
The 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 under

the security provided.

(4)
For the purposes of subsections (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 time

being owed in respect of the loan or credit facility, whether or not

any such interest has been so added.

71H
Authorised participants

(1)
A registered party must not—

(a)
be a party to a regulated transaction to which any of the

other parties is not an authorised participant;

(b)
derive a benefit in consequence of a connected transaction if

any of the parties to that transaction is not an authorised

participant.

(2)
This section does not apply to a regulated transaction if it was

entered into before the commencement of section (Regulation of

loans etc) of the Electoral Administration Act 2006.

(3)
In this Part, an authorised participant is a person who is a

permissible donor within the meaning of section 54(2).

(4)
The Secretary of State may, by order, specify circumstances or any

description of circumstances in which a person who is not a

permissible donor is to be treated as an authorised participant.

71I
Regulated transaction involving unauthorised participant

(1)
This section applies if a registered party is a party to a regulated

transaction in which another participant is not an authorised

participant.

(2)
The transaction is void.

(3)
Despite subsection (2)—

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(a)
any money received by the registered party by virtue of the

transaction must be repaid by the treasurer of the party to

the person from whom it was received, along with interest

at such rate as is determined in accordance with an order

made by the Secretary of State;

(b)
that person is entitled to recover the money, along with such

interest.

(4)
If—

(a)
the money is not (for whatever reason) repaid as mentioned

in subsection (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

transaction to the position they would have been in if the

transaction had not been entered into.

(5)
An order under subsection (4) may in particular—

(a)
where the transaction is a loan or credit facility, require that

any amount owed by the registered party be repaid (and

that no further sums be advanced under it);

(b)
where 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

registered party—

(a)
at the time the registered party enters into the transaction, is

an authorised participant, but

(b)
subsequently, for whatever reason, ceases to be an

authorised participant,


the transaction is void and subsections (3) to (5) apply with effect

from the time when the other party ceased to be an authorised

participant.

(7)
This section does not apply to a regulated transaction if it was

entered into before the commencement of section (Regulation of

loans etc) of the Electoral Administration Act 2006.

71J
Guarantees and securities: unauthorised participants

(1)
This section applies if—

(a)
a registered party and another person (A) enter into a

transaction of a description mentioned in section 71F(4)(a),

(b)
A is party to a regulated transaction of a description

mentioned in section 71F(4)(b) (“the connected transaction”)

with another person (B), and

(c)
B is not an authorised participant.

(2)
Section 71I(2) to (5) applies to the transaction mentioned in

subsection (1)(a).

(3)
The connected transaction is void.

(4)
Subsection (5) applies if (but only if) A is unable to recover from the

party the whole of the money mentioned in section 71I(3)(a) (as

18

applied by subsection (2) above), along with such interest as is there

mentioned.

(5)
Despite subsection (3), A is entitled to recover from B any part of

that money (and such interest) that is not recovered from the party.

(6)
Subsection (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 an authorised

participant, but

(b)
subsequently, for whatever reason, ceases to be an

authorised participant,


subsections (2) to (6) apply with effect from the time when B ceased

to be an authorised participant.

(8)
This section does not apply to a regulated transaction if it was

entered into before the commencement of section (Regulation of

loans etc) of the Electoral Administration Act 2006.

(9)
If the transaction mentioned in section 71F(4)(a) is not a regulated

transaction of a description mentioned in section 71F(2) or (3),

references in this section and section 71I(2) to (5) (as applied by

subsection (2) above) to the repayment or recovery of money must

be construed as references to (as the case may be)—

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

transaction,

(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)
the market value (at that time) of any facilities or services

provided under the transaction.

71K
Transfer to unauthorised participant invalid

If an authorised participant purports to transfer his interest in a

regulated transaction to a person who is not an authorised

participant the purported transfer is of no effect.

71L
Offences relating to regulated transactions

(1)
A registered party commits an offence if—

(a)
it enters into a regulated transaction of a description

mentioned in section 71F(2) or (3) in which another

participant is not an authorised participant, and

(b)
an officer of the party knew or ought reasonably to have

known of the matters mentioned in paragraph (a).

(2)
A person commits an offence if—

(a)
he is the treasurer of a registered party,

(b)
the party enters into a regulated transaction of a description

mentioned in section 71F(2) or (3) in which another

participant is not an authorised participant, and

(c)
he knew or ought reasonably to have known of the matters

mentioned in paragraph (b).

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(3)
A registered party commits an offence if—

(a)
it enters into a regulated transaction of a description

mentioned in section 71F(2) or (3) in which another

participant is not an authorised participant,

(b)
no officer of the party knew or ought reasonably to have

known that the other participant is not an authorised

participant, and

(c)
as soon as practicable after knowledge of the matters

mentioned in paragraph (a) comes to the treasurer of the

party he fails to take all reasonable steps to repay any

money which the party has received by virtue of the

transaction.

(4)
A person who is the treasurer of a registered party commits an

offence if—

(a)
the party enters into a regulated transaction of a description

mentioned in section 71F(2) or (3) in which another

participant is not an authorised participant,

(b)
subsection (2)(c) does not apply to him, and

(c)
as soon as practicable after knowledge of the matters

mentioned in paragraph (a) comes to him he fails to take all

reasonable steps to repay any money which the party has

received by virtue of the transaction.

(5)
A registered party commits an offence if—

(a)
it benefits from or falls to benefit in consequence of a

connected transaction to which any of the parties is not an

authorised participant, and

(b)
an officer of the party knew or ought reasonably to have

known of the matters mentioned in paragraph (a).

(6)
A person commits an offence if—

(a)
he is the treasurer of a registered party,

(b)
the party benefits from or falls to benefit in consequence of

a connected transaction to which any of the parties is not an

authorised participant, and

(c)
he knew or ought reasonably to have known of the matters

mentioned in paragraph (b).

(7)
A registered party commits an offence if—

(a)
it is a party to a transaction of a description mentioned in

section 71F(4)(a),

(b)
it benefits from or falls to benefit in consequence of a

connected transaction to which any of the parties is not an

authorised participant,

(c)
no officer of the party knew or ought reasonably to have

known of the matters mentioned in paragraphs (a) and (b),

and

(d)
as soon as practicable after knowledge of the matters

mentioned in paragraphs (a) and (b) comes to the treasurer

of the party he fails to take all reasonable steps to pay to any

person who has provided the party with any benefit in

consequence of the connected transaction the value of the

benefit.

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(8)
A person who is the treasurer of a registered party commits an

offence if—

(a)
the party is a party to a transaction of a description

mentioned in section 71F(4)(a),

(b)
the party benefits from or falls to benefit in consequence of

a connected transaction to which any of the parties is not an

authorised participant,

(c)
subsection (6)(c) does not apply to him, and

(d)
as soon as practicable after knowledge of the matters

mentioned in paragraphs (a) and (b) comes to him he fails to

take all reasonable steps to pay to any person who has

provided the party with any benefit in consequence of the

connected transaction the value of the benefit.

(9)
A person commits an offence if he—

(a)
knowingly 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 registered party in a regulated transaction with a person other

than an authorised participant.

(10)
It is a defence for a person charged with an offence under

subsection (2) to prove that he took all reasonable steps to prevent

the registered party entering the transaction.

(11)
It is a defence for a person charged with an offence under

subsection (6) to prove that he took all reasonable steps to prevent

the registered party benefiting in consequence of the connected

transaction.

(12)
A reference to a registered party entering into a regulated

transaction includes a reference to any circumstances in which the

terms of a regulated transaction are varied so as to increase the

amount of money to which the party is entitled in consequence of

the transaction.

(13)
A reference to a registered party entering into a transaction in

which another participant is not an authorised participant includes

a reference to any circumstances in which another party to the

transaction who is an authorised participant ceases (for whatever

reason) to be an authorised participant.

(14)
This section does not apply to a transaction which is entered into

before the commencement of section (Regulation of loans etc) of the

Electoral Administration Act 2006.

71M
Quarterly reports of regulated transactions

(1)
The treasurer of a registered party must, in the case of each year,

prepare a report under this subsection in respect of each of the

following periods—

(a)
January to March;

(b)
April to June;

(c)
July to September;

(d)
October to December.