Clause 16: Transitional provision

50.     Clause 16 is a transitional provision which is needed because certain provisions of the Criminal Justice Act 2003 increasing the power of magistrates’ courts to impose imprisonment (in England and Wales) are not yet in force.

Schedule 1: Investigatory powers of the Commission: Schedule to be inserted into the 2000 Act

51.     Schedule 1 of the Bill contains new Schedule 19A to the 2000 Act. This gives the Electoral Commission increased investigatory powers.

52.     Paragraph 1 of the new Schedule restates with some changes powers that the Electoral Commission have in relation to registered parties and others and which are contained in the current section 146 of the 2000 Act. Sub-paragraph (1) lists the individuals and organisations to which the investigatory powers set out in paragraph 1 can be applied. Broadly, these individuals and organisations are those considered to be the primary focus of the Commission’s function of monitoring compliance as, together, they are the individuals and organisations on whom obligations under the 2000 Act are principally imposed.

53.     Sub-paragraphs (2) and (3) allow the Commission, after issuing a “disclosure notice”, to require an individual, or an officer of an organisation, to produce or provide documents or an explanation in relation to income or expenditure where the information in question is reasonably required by the Commission to carry out their functions. Sub-paragraph (4) obliges the person to comply with a requirement set out in a disclosure notice within a reasonable time. It is a criminal offence not to do so without reasonable excuse, under paragraph 12 of the Schedule. Sub-paragraph (5) enables a person authorised by the Commission to enter premises at any reasonable time and inspect relevant documentation, to enable the Commission to carry out their functions.

54.     The substantive difference between the powers contained in paragraph 1 and those contained in its precursor in the original section 146 is that in the latter the power to enter premises was restricted so that it could be used only in relation to registered parties, permitted participants and candidates at elections (excluding local and Scottish electoral candidates). The power is not so limited in paragraph 1 and can be used in respect of any of the individuals or entities listed in sub-paragraph (1).

55.     Paragraph 2 provides the Commission with a new power in cases where they form a reasonable suspicion that an offence under the 2000 Act has been committed or that a contravention of any restriction or requirement of the Act has taken place. Where the Commission hold such a suspicion they may, under sub-paragraph (2), issue a notice to a person requiring that person to produce or provide any documents or explanation reasonably required for an investigation by them of the suspected offence or contravention. Sub-paragraph (3) obliges the person to comply with the disclosure notice within a reasonable time. It is a criminal offence not to do so without reasonable excuse, under paragraph 12 of the same Schedule. This power is wider than that set out in paragraph 1 because it is not restricted to documentation or information relating to income or expenditure nor is it restricted to a list of specified individuals or bodies.

56.     Sub-paragraph (4) allows an investigator authorised by the Commission to require a person to come and answer in person any questions that the investigator reasonably considers relevant to the investigation. The powers created by paragraph 2 can be used in relation to a person who is also covered by paragraph 1, albeit for a different purpose (i.e. that of investigating purported wrongdoing), and may be used against any other person who holds, or is thought to hold, information reasonably required for an investigation by the Commission. It follows that use of the power is not limited to the individual or body suspected by the Commission of having committed an offence or contravention.

57.     Paragraph 3 allows a justice of the peace (or a sheriff in Scotland) to issue a warrant, following the giving of information on oath by the Commission, if satisfied that there are reasonable grounds for believing that there has been an offence under, or contravention of, the 2000 Act and that there are certain documents on any premises. These may be documents that a person has failed to produce in response to a disclosure requirement under paragraph 2(2), or they may be other documents relevant to an investigation by the Commission of the suspected offence or contravention.

58.     Sub-paragraph (3) provides that the warrant authorises a constable to use reasonable force to enter the premises, to search the premises and to take other necessary steps in order to take possession of and preserve the documents to which the warrant relates. It also authorises the constable to require an explanation about the documents or their location from any person named in the warrant. Sub-paragraph (4) specifies that a warrant issued under this paragraph will be valid for one month.

59.     Paragraph 4 specifies that documents seized under paragraph 3 may be retained for three months. However, if during that time any relevant criminal proceedings are begun, or notices are issued or penalties imposed under the new civil sanctions powers given by Schedule 19B, the documents may generally be retained until they are no longer required in relation to the proceedings or civil sanctions.

60.     Paragraph 5 provides that the Commission, or a person authorised by the Commission, may make copies or records of relevant information or explanations obtained under the Schedule.

61.     Paragraph 6 requires that any authorisation of a person by the Commission made under this Schedule must be in writing.

62.     Paragraph 7 requires the person entering premises to provide evidence of their right to do so if the person on the premises asks for this.

63.     Paragraph 9 deals with documents held in electronic form. Sub-paragraph (1)(a) gives the Commission a power to require such documents to be made available in a legible, non-encrypted form. Sub-paragraph (1)(b) enables a person authorised to inspect documents to require any person on premises being searched to give reasonable assistance to allow the inspector to make legible copies of electronic documents, or records of information contained in them. Under this power an inspector can also inspect and check any computer or associated apparatus used in connection with the information.

64.     Paragraph 10 exempts information subject to legal professional privilege (or confidentiality of communications in Scotland) from any requirement to produce information (in whatever form) under any power provided by this Schedule. The appropriate test is whether a claim to legal professional privilege or confidentiality of communications could be maintained in legal proceedings in respect of the material in question.

65.     Paragraph 11 deals with the admissibility of statements provided under compulsion. Sub-paragraph (1) provides that a statement made in response to a requirement under the Schedule may be used in any proceedings, provided that it complies with any other rules of evidence in those proceedings. But sub-paragraph (2) provides that the statement is not admissible against the maker of the statement in criminal proceedings or proceedings under the new Schedule 19B, unless evidence about the statement is relied on, or a question about it is asked, by the maker, or unless the proceedings are for an offence mentioned in sub-paragraphs (3) and (4). (These offences are similar to perjury.)

66.     Paragraph 12 provides that it is an offence to fail to comply with any requirement imposed under the Schedule (for example, to refuse to supply the Commission with information requested under paragraph 1 or 2); to obstruct intentionally somebody performing functions under the Schedule; or knowingly or recklessly provide false information in response to a requirement imposed under the Schedule.

Schedule 2: Civil sanctions: Schedule to be inserted into the 2000 Act

67.     Schedule 2 to the Bill inserts new Schedule 19B into the 2000 Act. It sets out the range of new civil sanctions available to the Commission.

Part 1: Fixed monetary penalties

68.     Paragraph 1 allows the Electoral Commission to impose fixed monetary penalties where they are satisfied beyond reasonable doubt that a prescribed offence under the 2000 Act has been committed or that a contravention of a prescribed requirement or restriction contained in that Act has taken place. “Prescribed” means prescribed in an order by the Secretary of State. The penalty can be imposed on the person who has committed the breach (sub-paragraph 1). Also, sub-paragraphs (2) to (4) allow the Commission to impose a fixed monetary penalty on a political party, a recognised third party or a permitted participant respectively for whom the individual is an office holder or responsible person. Sub-paragraph (5) explains that the imposition of a fixed monetary penalty will require the individual or other person concerned to pay a prescribed amount of money to the Commission. Sub-paragraph (6) states that where an individual is issued with a fixed monetary penalty for an offence triable summarily (whether or not it can also be tried on indictment) and punishable on summary conviction by a fine, the penalty imposed must not be higher than the maximum fine available in summary proceedings.

69.     Paragraph 2 requires the Commission to serve notice of any intention to impose a fixed monetary penalty on a person (sub-paragraph (1)). This notice must offer the person the opportunity to discharge the penalty at that point by paying a prescribed amount, which cannot exceed the amount of the proposed penalty (sub-paragraph (2)). Alternatively, the person can opt to make written representations and objections to the Commission against the proposal to impose the penalty (sub-paragraph (3)). If the deadline for making representations and objections passes without the person having paid the prescribed amount under sub-paragraph (2), the Commission must decide whether to impose the penalty. If the Commission does decide to impose it, a further notice recording that must be served on the relevant person (sub-paragraph (4)). Sub-paragraph (5) provides that if the person’s representations or objections have raised any matter which means that the Commission no longer suspects the person of having committed a prescribed offence or contravened a prescribed requirement or restriction of the 2000 Act, the Commission may not impose the penalty. That sub-paragraph also enables the Secretary of State to prescribe other circumstances in which a penalty may not be imposed. The person may appeal against the decision to impose the penalty on the grounds set out in sub-paragraph (6).

70.     Paragraph 3 explains what information the Commission must include when giving notice of an intention to impose a fixed monetary penalty on a person or when giving notice of a subsequent decision to impose the penalty.

71.     Paragraph 4 limits the criminal proceedings that can be taken against a person for a prescribed offence or other breach of the 2000 Act that may be dealt with by way of fixed monetary penalty. Under sub-paragraph (1) if the Commission notifies the person of their intention to impose a fixed monetary penalty for the breach, no criminal proceedings for the breach can be brought during the period when liability can be discharged under paragraph 2(2). This sub-paragraph also precludes such proceedings being taken against a person who does discharge liability by making a payment under paragraph 2(2). Finally, paragraph 4(2) precludes a person on whom the Commission imposes a fixed monetary penalty under paragraph 2(4) from being convicted of an offence for the breach.

Part 2: Discretionary requirements

72.     Paragraph 5 allows the Electoral Commission to impose a discretionary requirement on a person, political party, recognised third party or permitted participant where they are satisfied beyond reasonable doubt that a person has committed a prescribed offence or contravened a prescribed restriction or requirement of the 2000 Act (sub-paragraphs (1) to (4)). Sub-paragraph (5) defines a discretionary requirement as a sanction that can take the form of a monetary penalty or, alternatively, an instruction to take certain actions designed to either prevent the recurrence of the offence or contravention or restore the position to what it would have been had the offence or contravention not occurred. Sub-paragraph (6) limits the use of discretionary requirements by preventing the Commission from imposing a discretionary requirement on a person more than once for the same act or omission. Sub-paragraph (8) sets the financial limit of a variable monetary penalty for offences which are triable summarily, stating that, where such offences are punishable by a fine, the variable monetary penalty must not be greater than the maximum fine.

73.     Paragraph 6 requires that, where the Commission intends to impose a discretionary requirement on a person for a prescribed offence or other breach of the 2000 Act, they must first notify the person of their intention. Sub-paragraph (2) allows the person to make written representations and objections to the Commission against the proposed penalty. If anything is raised which leads the Commission to no longer be satisfied that the prescribed offence or contravention took place, the Commission may not impose the penalty. In all other cases, the Commission may proceed to serve on the person a notice formally imposing the discretionary requirement, which will specify what the requirement is (sub-paragraph (5)). The person may appeal to a county court (or Sheriff in Scotland) against the decision to impose the discretionary requirement, on a number of specified grounds (sub-paragraph (6)).

74.     Paragraph 7 explains what information the Commission must include when giving the initial notice of an intention to impose a discretionary requirement on a person. This includes the grounds for imposing the requirement and the period for appeal (no less than 28 days from the day on which the notice is received). Sub-paragraph (3) sets out the information that must be provided by the Commission when they are imposing a discretionary requirement. This is: the grounds for the proposed discretionary requirement, details of any monetary penalty, rights of appeal and the consequences of non-compliance.

75.     Paragraph 8 limits the use of other sanctions against a person who has had a discretionary requirement imposed upon them. It explains that if a discretionary requirement is imposed on a person for an offence or a contravention of a restriction or requirement under the 2000 Act, this protects them from being convicted in a criminal court for the same offence. However, this protection from future prosecution does not apply in cases where the discretionary requirement imposed was non-monetary, no variable monetary penalty was imposed, and the person failed to comply with the non-monetary discretionary requirement.

76.     Paragraph 9 allows the Commission to impose a “non-compliance penalty” on a person who fails to comply with a non-monetary discretionary requirement; and also sets out the grounds and avenue of appeal against a non-compliance penalty (sub-paragraphs (3) and (4)) .

Part 3: Stop notices

77.     Paragraph 10 provides that the Electoral Commission can impose a stop notice on a person in order to prevent them from continuing or repeating a particular activity which the Commission reasonably believes is (or is likely to be) a prescribed offence or a contravention of a prescribed requirement or restriction under the 2000 Act. A stop notice can also be imposed where the Commission believes that a person’s behaviour is likely to lead to them committing an offence or acting in contravention of a prescribed requirement or restriction contained in the 2000 Act. In both cases the Commission must believe that the activity, or potential activity, is seriously damaging to public confidence in the effectiveness of the controls in the 2000 Act on income or expenditure by registered parties and others, or that it significantly risks doing so.

78.     Paragraphs 11 to 14 set out the details and limitations of how the stop notice system operates. Paragraph 11 lists the information to be included in a stop notice. Paragraph 12 requires the Commission to issue a “completion certificate” once they are satisfied that the person has taken the steps set out in the stop notice (at which point it will cease to have effect). The person upon whom a notice has been imposed may apply for a completion certificate at any time and the Commission must make a decision on the application within 14 days of receipt. Paragraph 13 explains how a person may appeal against the imposition of a stop notice, or against a decision not to issue a completion certificate, and provides that any appeal will be heard by a county court (or sheriff in Scotland). It also sets out the grounds for appeal in both circumstances. Paragraph 14 provides that a person who does not comply with a stop notice is guilty of an offence.

Part 4: Enforcement undertakings

79.     Paragraph 15 outlines the powers of the Commission to accept an enforcement undertaking from a person whom the Commission has reasonable grounds for believing has committed a prescribed offence or contravened a prescribed restriction or requirement of the 2000 Act. An enforcement undertaking may be offered by the person suspected of the offence or contravention and outlines the action they will take (within a specified period). The action may be with a view to preventing the recurrence of the offence or contravention or returning the position to what it would have been had the offence or contravention not taken place or it may be action of a kind that has been prescribed in an order by the Secretary of State. Sub-paragraph (1)(d) requires that the undertaking will take effect only if the Commission accepts it. Sub-paragraph (2) makes clear that a person who has complied with the accepted undertaking will generally be exempt from other sanctions, including criminal proceedings, in relation to the acts or omissions on which the undertaking is based as long as the undertaking is complied with.

Part 5: Power to make supplementary provision etc by order

80.     Paragraph 16 gives the Secretary of State the power to make orders that are supplemental to, consequential on or incidental to this Schedule. Such provisions may include transitional provision. This includes the power to amend, repeal or revoke any enactment.

81.     Paragraph 17 sets out the consultation process that the Secretary of State must carry out prior to making a supplementary order under paragraph 16. As part of this process the Electoral Commission must be consulted, along with other persons that the Secretary of State considers appropriate. Under sub-paragraph (2) further consultation is required where, following the outcome of the initial consultation, it is apparent that substantial changes to an order will be necessary. Any consultations which are conducted prior to the commencement of this Schedule may count for these purposes.

82.     Paragraph 18 sets out the details of what can be included in a supplementary order regarding the Commission’s power to impose financial sanctions, including fixed monetary penalties, variable monetary penalties and non-compliance penalties. In particular, provision made by virtue of this paragraph may include detail about early payment discounts, late payment penalties, late payment interest and enforcement.

83.     Paragraph 19 sets out the details of what can be included in a supplementary order in relation to enforcement undertakings. The order may include a wide range of detail about procedural matters relating to undertakings, for example, how undertakings are entered into and in what circumstances undertakings are regarded as having been complied with.

84.     Paragraph 20 states that a supplementary order may extend the time available to institute criminal proceedings against a person in certain instances. The first of these is where a non-monetary discretionary requirement (but no variable monetary penalty) has been imposed and the person has failed to comply with the non-monetary discretionary requirement. The second is where there has been a breach of all or part of an enforcement undertaking.

85.     Paragraph 21 allows a supplementary order to set out the details of the appeals process in relation to the imposition of a requirement or the service of a notice under this Schedule. Such an order may include provision conferring relevant powers on courts (for example, to withdraw the requirement or notice against which there is an appeal).

Part 6: General and supplemental

86.     Paragraph 22 limits the use of fixed monetary penalties, discretionary requirements and stop notices. It explains that a fixed monetary penalty may not be imposed on a person if they are already subject to a discretionary requirement or stop notice for a breach. Additionally, if a person has had a fixed monetary penalty imposed on them for a breach or has paid a sum to discharge liability for a fixed monetary penalty, they cannot be given a discretionary requirement or a stop notice in relation to the breach.

87.     Paragraph 23 provides that, if someone is required under Schedule 19A to the 2000 Act to make a statement as part of an investigation by the Commission, the Commission must not take account of that statement when deciding whether to impose a civil sanction on the person. The only exception is for the offence of providing false information set out in paragraph 12(3) of Schedule 19A to the 2000 Act.

88.     Paragraph 24 stipulates that any financial penalty imposed on an unincorporated association must be paid from its own funds.

89.     Paragraph 25 requires the Commission to publish guidance about enforcement of the 2000 Act. The guidance must include details of the sanctions available (both civil and criminal), the circumstances in which civil sanctions may be used and the rights of appeal available. Sub-paragraph (7) requires the Commission to carry out consultations with persons that they consider appropriate prior to publishing guidance. Under sub-paragraph (8) the Commission is required to have regard to the guidance when exercising its functions.

90.     Paragraph 26 stipulates that all monetary penalties paid to the Commission as a result of the imposition of the civil sanctions under the Schedule must be paid into the Consolidated Fund.

91.     Paragraph 27 requires the Commission to publish reports listing the cases in which they have imposed fixed monetary penalties, discretionary notices or stop notices (except where these sanctions have been successfully appealed against); cases in which liability for a fixed monetary penalty has been avoided through payment of a sum; and cases in which an enforcement undertaking has been accepted. Sub-paragraph (2) enables the Commission to exclude information if it might be unlawful for the report to include it (for example, because its inclusion might breach the right to respect for private and family life protected by Article 8 of the European Convention on Human Rights, or there is a statutory restriction on its disclosure).

92.     Paragraph 28 lists the public bodies from which the Commission may request information when exercising the powers under the Schedule. It also precludes disclosures that would contravene certain other relevant legislation on data protection, and provides that powers of disclosure that are independent of this power are not affected by it.

Part 7: Interpretation

93.     Paragraph 28 sets out definitions of words and expressions used in the Schedule.

Schedule 3: Declaration as to source of donation

94.     Schedule 3 makes amendments in relation to donations to individuals and members associations, recognised third parties and permitted participants, which correspond to the amendments made in relation to donations to registered political parties by clause 8. Paragraph 1 inserts new paragraph 6A into Schedule 7 to the 2000 Act (control of donations to individuals and members associations), and paragraphs 2 and 3 make consequential changes to that Schedule. Paragraph 4 inserts new paragraph 6A into Schedule 11 to the 2000 Act (control of donations to recognised third parties) and paragraphs 5 and 6 make consequential changes to that Schedule. Paragraph 7 inserts new paragraph 6A into Schedule 15 to the 2000 Act (control of donations to permitted participants) and paragraphs 8 and 9 make consequential changes to that Schedule.

95.     Paragraph 10 amends Schedule 20 to the 2000 Act to specify the penalties which will be incurred for making a false declaration as to the source of a donation to individuals and members associations, recognised third parties and permitted participants.

Schedule 4: Minor and consequential amendments and Schedule 5: Repeals

96.     Clause 15 gives effect to Schedules 4 and 5. Schedule 4 makes minor and consequential amendments. (All of these are amendments that are consequential on other provisions in the Bill, except those at paragraphs 9 and 15 which make minor drafting changes.) Schedule 5 makes a number of repeals.