Parliamentary Voting System and Constituencies Bill

House of Lords

Session 2010 - 11
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Other Bills before Parliament

Parliamentary Voting System and Constituencies Bill

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
284

      (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
interest at the rate referred to in section 71I(3)(a);
5
(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
mentioned in sub-paragraph (3)(a), or
10
(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
15
transaction had not been entered into.
      (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);
20
(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
permitted participant—
(a)
at the time the permitted participant enters into the
25
transaction, is an authorised participant, but
(b)
subsequently, for whatever reason, ceases to be an
authorised participant,

the transaction is void and sub-paragraphs (3) to (5) apply with
effect from the time when the other party ceased to be an
30
authorised participant.
Guarantees and securities: unauthorised participant
6     (1)
This paragraph applies if—
(a)
a permitted participant and another person (A) enter into
a transaction of a description mentioned in
35
paragraph 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 an authorised participant.
40
      (2)
Paragraph 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
45
in paragraph 5(3)(a) (as applied by sub-paragraph (2) above),
along with such interest as is there mentioned.

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
285

      (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)
Sub-paragraph (5) does not entitle A to recover more than the
contingent liability under the security provided by virtue of the
5
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
10
authorised participant,

sub-paragraphs (2) to (6) apply with effect from the time when B
ceased to be an authorised participant.
      (8)
If the transaction mentioned in paragraph 2(3)(a) is not a regulated
transaction of a description mentioned in paragraph 2(1) or (2),
15
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
transaction,
20
(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
25
provided under the transaction.
Transfer to unauthorised participant invalid
7
If an authorised participant purports to transfer the participant’s
interest in a regulated transaction to a person who is not an
authorised participant the purported transfer is of no effect.
30
Offences
8     (1)
An 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
35
another party is not an authorised participant, and
(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—
40
(a)
it enters into a regulated transaction of a description
mentioned in paragraph 2(1) or (2) to which another party
is not an authorised participant, and
(b)
an officer of the permitted participant knew or ought
reasonably to have known of the matters mentioned in
45
paragraph (a).

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
286

      (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 enters into a regulated
transaction of a description mentioned in paragraph 2(1)
or (2) to which another party is not an authorised
5
participant, and
(b)
the person knew or ought reasonably to have known of the
matters mentioned in paragraph (a).
      (4)
An individual who is a permitted participant commits an offence
if—
10
(a)
the individual enters into a regulated transaction of a
description mentioned in paragraph 2(1) or (2) to which
another party is not an authorised participant,
(b)
the individual neither knew nor ought reasonably to have
known that the other party is not an authorised
15
participant, and
(c)
as soon as practicable after knowledge of the matters
mentioned in paragraph (a) comes to the individual he
fails to take all reasonable steps to repay any money which
the individual has received by virtue of the transaction.
20
      (5)
A permitted participant that is not an individual commits an
offence if—
(a)
it enters into a regulated transaction of a description
mentioned in paragraph 2(1) or (2) to which another party
is not an authorised participant,
25
(b)
no officer of the permitted participant knew or ought
reasonably to have known that the other party is not an
authorised participant, and
(c)
as soon as practicable after knowledge of the matters
mentioned in paragraph (a) comes to the responsible
30
person he fails to take all reasonable steps to repay any
money which the permitted participant has received by
virtue of the transaction.
      (6)
A person who is the responsible person in relation to a permitted
participant that is not an individual commits an offence if—
35
(a)
the permitted participant enters into a regulated
transaction of a description mentioned in paragraph 2(1)
or (2) to which another party is not an authorised
participant,
(b)
sub-paragraph (3)(b) does not apply to the person, and
40
(c)
as soon as practicable after knowledge of the matters
mentioned in paragraph (a) comes to the person he fails to
take all reasonable steps to repay any money which the
permitted participant has received by virtue of the
transaction.
45
      (7)
An individual who is a permitted participant commits an offence
if—
(a)
the individual benefits from or falls to benefit in
consequence of a connected transaction to which any of the
parties is not an authorised participant, and
50

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
287

(b)
the individual knew or ought reasonably to have known of
the matters mentioned in paragraph (a).
      (8)
A permitted participant that is not an individual commits an
offence if—
(a)
it benefits from or falls to benefit in consequence of a
5
connected transaction to which any of the parties is not an
authorised participant, and
(b)
an officer of the permitted participant knew or ought
reasonably to have known of the matters mentioned in
paragraph (a).
10
      (9)
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 any of the
parties is not an authorised participant, and
15
(b)
the person knew or ought reasonably to have known of the
matters mentioned in paragraph (a).
     (10)
An individual who is a permitted participant commits an offence
if—
(a)
the individual is a party to a transaction of a description
20
mentioned in paragraph 2(3)(a),
(b)
the individual benefits from or falls to benefit in
consequence of a connected transaction to which any of the
parties is not an authorised participant,
(c)
the individual neither knew nor ought reasonably to have
25
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
individual he fails to take all reasonable steps to pay to any
30
person who has provided the individual with any benefit
in consequence of the connected transaction the value of
the benefit.
     (11)
A permitted participant that is not an individual commits an
offence if—
35
(a)
it 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 any of the parties is not an
authorised participant,
40
(c)
no officer of the permitted participant 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
45
responsible person he fails to take all reasonable steps to
pay to any person who has provided the permitted
participant with any benefit in consequence of the
connected transaction the value of the benefit.

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
288

     (12)
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 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
5
consequence of a connected transaction to which any of the
parties is not an authorised participant,
(c)
sub-paragraph (9)(b) does not apply to the person, and
(d)
as soon as practicable after knowledge of the matters
mentioned in paragraphs (a) and (b) comes to the person
10
he fails to take all reasonable steps to pay to any person
who has provided the permitted participant with any
benefit in consequence of the connected transaction the
value of the benefit.
     (13)
A person commits an offence if the person—
15
(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 permitted participant in a regulated transaction
20
with a person other than an authorised participant.
     (14)
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 entering into the transaction.
     (15)
It is a defence for a person charged with an offence under sub-
25
paragraph (9) to prove that the person took all reasonable steps to
prevent the permitted participant benefiting in consequence of the
connected transaction.
     (16)
A reference to a permitted participant entering into a regulated
transaction includes a reference to any circumstances in which the
30
terms of a regulated transaction are varied so as to increase the
amount of money to which the permitted participant is entitled in
consequence of the transaction.
     (17)
A reference to a permitted participant entering into a transaction
to which another party is not an authorised participant includes a
35
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.
Penalties
9     (1)
A person guilty of an offence under sub-paragraph (1), (2), (4), (7),
40
(8) or (10) of paragraph 8 is liable—
(a)
on summary conviction, to a fine not exceeding the
statutory maximum;
(b)
on conviction on indictment, to a fine.
      (2)
A person guilty of an offence under sub-paragraph (3), (5), (6), (9),
45
(11), (12) or (13) of paragraph 8 is liable—

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
289

(a)
on summary conviction, to imprisonment for a term not
exceeding 12 months or to a fine not exceeding the
statutory maximum;
(b)
on conviction on indictment, to imprisonment for a term
not exceeding 12 months or to a fine.
5
      (3)
In the application of sub-paragraph (2)(a)—
(a)
in England and Wales, in relation to an offence committed
before the commencement of section 154(1) of the Criminal
Justice Act 2003, or
(b)
in Northern Ireland,
10

the reference to 12 months is to be read as a reference to 6 months.
Part 3
Reporting of regulated transactions
Statement of regulated transactions
10    (1)
The responsible person in relation to a permitted participant must
15
include in any return required to be prepared under section 120 a
statement of regulated transactions entered into by the permitted
participant.
      (2)
The statement must comply with paragraphs 11 to 15.
      (3)
For the purposes of those paragraphs a regulated transaction is a
20
recordable transaction—
(a)
if the value of the transaction is more than £7,500, or
(b)
if 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
25
(within the meaning of Schedule 15) or regulated transaction
made by, or entered into with, the person with whom the
regulated transaction was entered into.
Identity of authorised participants
11
The statement must record, in relation to each recordable
30
transaction to which an authorised participant was a party, the
information about the authorised participant which is, in
connection with transactions entered into by political parties,
required to be recorded in transaction reports by virtue of
paragraph 2 of Schedule 6A.
35
Identity of unauthorised participants
12
The statement must record, in relation to each recordable
transaction to which a person other than an authorised participant
was a party—
(a)
the name and address of the person;
40
(b)
the date when, and the manner in which, the transaction
was dealt with in accordance with sub-paragraphs (3) to
(5) of paragraph 5 or those sub-paragraphs as applied by
paragraph 5(6) or 6(2).

Parliamentary Voting System and Constituencies Bill
Schedule 9 — Control of loans etc to permitted participants — Introductory
290

Details of transaction
13    (1)
The statement must record, in relation to each recordable
transaction, the information about the transaction which is, in
connection with transactions entered into by political parties,
required to be recorded in transaction reports by virtue of
5
paragraph 5(2), (3) and (4) of Schedule 6A (read with any
necessary modifications).
      (2)
The statement must record, in relation to each recordable
transaction of a description mentioned in paragraph 2(1) or (2)
above, the information about the transaction which is, in
10
connection with transactions entered into by political parties,
required to be recorded in transaction reports by virtue of
paragraph 6 of Schedule 6A.
      (3)
The statement must record, in relation to each recordable
transaction of a description mentioned in paragraph 2(3)(a) above,
15
the information about the transaction which is, in connection with
transactions entered into by political parties, required to be
recorded in transaction reports by virtue of paragraph 7(2)(b), (3)
and (4) of Schedule 6A.
Changes
20
14    (1)
Where another authorised participant has become a party to a
regulated transaction (whether in place of or in addition to any
existing participant), or there has been any other change in any of
the information that is required by paragraphs 11 to 13 to be
included in the statement, the statement must record—
25
(a)
the information as it was both before and after the change;
(b)
the date of the change.
      (2)
Where a recordable transaction has come to an end, the statement
must—
(a)
record that fact;
30
(b)
record the date when it happened;
(c)
in the case of a loan, state how the loan has come to an end.
      (3)
For the purposes of sub-paragraph (2), a loan comes to an end if—
(a)
the whole debt (or all the remaining debt) is repaid;
(b)
the creditor releases the whole debt.
35
Total value of non-recordable transactions
15
The statement must record the total value of any regulated
transactions that are not recordable transactions.