Article 23 Accounts, reporting and audit obligations
1. At the latest within six months following the end of the financial year, European political parties and European political foundations shall submit to the Authority, with a copy to the Authorising Officer of the European Parliament and to the competent National Contact Point of the Member State of their seat: (a) their annual financial statements and accompanying notes, covering their revenue and expenditure, assets and liabilities at the beginning and at the end of the financial year, in accordance with the law applicable in the Member State in which they have their seat and their annual financial statements on the basis of the international accounting standards defined in Article 2 of Regulation (EC) No 1606/2002 of the European Parliament and of the Council ( 5 ); (b) an external audit report on the annual financial statements, covering both the reliability of those financial statements and the legality and regularity of their revenue and expenditure, carried out by an independent body or expert; and (c) the list of donors and contributors and their corresponding donations or contributions reported in accordance with Article 20(2), (3) and (4). 2. Where expenditure is implemented by European political parties jointly with national political parties or by European political foundations jointly with national political foundations, or with other organisations, evidence of the expenditure incurred by the European political parties or by the European political foundations directly or through those third parties shall be included in the annual financial statements referred to in paragraph 1. 3. The independent external bodies or experts referred to in point (b) of paragraph 1 shall be selected, mandated and paid by the European Parliament. They shall be duly authorised to audit accounts under the law applicable in the Member State in which they have their seat or establishment. 4. European political parties and European political foundations shall provide any information requested by the independent bodies or experts for the purpose of their audit. 5. The independent bodies or experts shall inform the Authority and the Authorising Officer of the European Parliament of any suspected illegal activity, fraud or corruption which may harm the financial interests of the Union. The Authority and the Authorising Officer of the European Parliament shall inform the National Contact Points concerned thereof.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Democracy is one of the fundamental values on which the European Union is founded. To ensure the functioning of a representative democracy on the European level, the treaties determine that the citizens of the European Union are directly represented in the European Parliament. The right to freedom of association and the right to freedom of expression are fundamental rights of every citizen of the Union. Political parties fulfil an essential role in a representative democracy, creating a direct link between the citizens and the political system, thereby enhancing the legitimacy of the system. The same happens at European level: according to Article 10 of the Treaty on European Union, " political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union ". Article 12(2) of the Charter of Fundamental Rights of the European Union expresses the same principle. Fostering political debate across Europe on European issues through vibrant European political parties is a long standing Commission objective. In the run up to the 2014 European elections, the Commission issued a Recommendation 1 , calling on European and national political parties, supported by the institutions and the Member States, to take a numbe r of steps to strengthen the role of European political parties in contributing to forming European political awareness and to expressing the will of the citizens of the Union. One of these steps was the "Spitzenkandidat". European political parties responded to the Commission's call and the 2014 European Parliament elections were fundamentally different from previous ones. For the first time, they established a link between the results of the elections and the choice of the current European Commission President, Jean-Claude Juncker. "Spitzenkandidaten" or candidates for President of the European Commission, with different political programmes allowed voters to make an informed choice between alternative political platforms for Europe, rather than on exclusively national political issues, thus ‘europeanising’ the elections. Regulation No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations 2 was in troduced to increase the visibility, recognition, effectiveness, transparency and accountability of European political parties and their affiliated political foundations. Political parties and foundations satisfying a number of conditions were offered the opportunity to become European legal entities by registering at European level, and thereby enhancing access to European financial support. These conditions include representation in a sufficiently large number of EU Member States and respect, both in their programme and activities, of the values on which the EU is founded - respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities. An independent Authority for European political parties and foundations ("the Authority") was created, for the purpose of registering, controlling and, if necessary, imposing sanctions on European political parties and foundation, including to consider cases where such entities allegedly fail to respect these fundamental European values. Where doubts arise about whether a party or foundation is observing this requirement in practice, the European Parliament, the Council or the Commission may lodge a request with the Authority for European political parties and European political foundations to verify the situation. Before coming to a decision on whether to de-register a party or foundation, the Authority must consult a Committee of independent eminent persons. Nevertheless, the Com mission’s report on the 2014 European elections 3 found that work remained to be done to increase the participation of citizens and the inclusivity of elections, enhance the European dimension of the political debate, reverse the trend of low turnouts, furt her enhance the democratic legitimacy of the EU decision-making process, highlight affiliations between national and European parties, and promote political accountability. Moreover, despite the progress made with Regulation No 1141/2014, the existing rules have loopholes that need to be addressed. The European Parliament, as well as a number of European political parties, have called for improvements and adjustments to these rules. The European Parliament services in charge of the administration of this Regulation have worked on a number of cases resulting from inappropriate use of funding. In March 2017, Parliament held a plenary debate and issued an oral question inviting the Commission to respond both on the timing of any changes and on certain specific changes which concerned the level of co-financing, the possibility of multi-party membership of European Parliaments' Members, the number of members required for funding, the financing of referendum campaigns, the introduction of a financial capacity criterion and allowing the building of financial reserves. In this debate, the Commission e xpressed its willingness to engage with the Parliament, along with the Council, in monitoring the early stages of implementing the new rules. On 15 June 2017, Parliament adopted a resolution 4 calling upon the Commission to propose a revision of the current legal framework as soon as possible to address its shortcomings, especially with respect to the level of co-financing requested, and of the possibility of multi-party membership of European Parliaments' Members. Parliament and its political parties wrote to the Commission to restate their call for changes; a call elaborated in a comprehensive report provided to the Commission. Given the above and based on the extensive input obtained from various stakeholders (see section 3), the Commission has therefore decided to propose a limited number of targeted amendments to this Regulation. These aim to close the loopholes, improve transparency, to ensure the appropriate allocation and expenditure of limited resources from the EU budget, and thereby to strengthen the genuine electoral representation of European citizens by European political parties. The amendments will ensure that the existing rules are not circumvented or its provisions misused. The focused changes should be in place before the 2019 European elections. They will help address the challenges identified by the Commission in relation to the 2014 European elections, in particular in relation to the affiliations between national and European parties and increased political accountability. Specific i ssues addressed In the first place, the current rules are prone to abuse regarding the issue of who can sponsor the registration of a European political party, because they allow the required level of representation (i.e. in seven Member States) to be met either (i) by support from member parties represented in regional parliaments, a national Parliament or the European Parliament; (ii) by support from individual members of such parliaments or (iii) by a mixture of the two. In the first years after the introduction of funding for European political parties, most of the beneficiaries were alliances made up of national parties coming from the same political family. However, several European political parties created in recent years are composed mainly of individual politicians and/or strongly dominated by one or two national political parties. There are several cases of different members of a single national party sponsoring more than one European political party; in some extreme cases, a single member has sponsored more than one party. The Authority has also been confronted with practical problems linked to the multiparty membership. It is often unclear how to avoid double counting for representation, how to deal with prior memberships, and how to make a connection between the representation and funding criteria - including the issue of a Member of the European Parliament counting for different European political parties as regards, on the one hand, registration and, on the other hand, funding. The second issue of concern regards proportionality of the EU funding received to representation in the European Parliament. Currently, European political parties can apply for funding if they are represented in the European Parliament by at least one Member. A number of European political parties as well as the European Parliament's administration, have asked to increase the threshold of representation to three Members, to prevent the misuse of public funding via "one-man parties". However, the practical impact of such a change would be minimal, as at present even the least represented European political parties eligible for funding currently have 3 Members 5 (see graph). More importantly such a change would raise serious legal concerns related to fundamental rights of fre edom of association and equality of opportunities for parties presenting candidates for elections and would unduly limit the pluralistic nature of European politics. There is another way of addressing this concern by changing the distribution key for the funding of the eligible European political parties and the European political foundations. Currently, 15% of the total amount available is distributed equally to all parties which meet the one Member threshold, leaving 85% to be distributed in proporti on to each party’s share of elected Members (the same distribution key is used for foundations). This leads to a rather unbalanced reflection of the electoral representation in Parliament. The tables below 6 , provided by administration of the European Parli ament, show the effect of changing the fixed portion of funding compared to the portion related to the level of representation in Parliament. Lowering the set aside amount to 5% could help restore a more proper balance and thus lead to a fairer and better reflection of electoral representation in Parliament. In the third place, next to abuse and proportionality issues, European political parties and – to a larger extent – the political foundations have difficulties meeting the current co-financing threshold of 15%. The European Parliament services have also been confronted by some dubious practices in this respect, such as some parties seeking to meet the letter of the co-financing requirement via circular financial flows. As regards financial capacity, in the financial year 2015, the Parliament's external auditor flagged concerns in 8 out of 28 reports. This indicates that the beneficiaries’ own resources are not sufficient. In many cases, the shortfall in own resources from membership contributions and donations can only be balanced by the use of contributions in kind. In 2015 parties received contributions in kind amounting to €238,009 and foundations to €283,649. The objective evaluation of these contributions poses significant problems. In several cases, the Parliament's administration has been unable to verify this valuation in detail and ascertain whether the contributions were actually necessary for and directly related to the activity mentioned, and to determine whether the underlying activities were in the interest of the European party exclusively or possibly shared with a partner organisation. Fourthly, there is a lack of clarity and transparency in the existing rules regarding the steps to be taken in cases where a party or foundation ceases to comply with the registration criteria or is found to have been registered on the basis of incorrect information. Fifthly, based on the experience of Parliament's administration, there is a need to extend the scope of possible measures to recover funds misspent by parties and foundations.
Revised version (Article 23 Accounts, reporting and audit obligations):
2. Where expenditure is implemented by European political parties jointly with national political parties or by European political foundations jointly with national political foundations, or with other organisations, evidence of the expenditure incurred by the European political parties or by the European political foundations directly or through those third parties shall be included in the annual financial statements referred to in paragraph 1. 3. The independent external bodies or experts referred to in point (b) of paragraph 1 shall be selected, mandated and paid by the European Parliament. They shall be duly authorised to audit accounts under the law applicable in the Member State in which they have their seat or establishment. 4. European political parties and European political foundations shall provide any information requested by the independent bodies or experts for the purpose of their audit. 5. The independent bodies or experts shall inform the Authority and the Authorising Officer of the European Parliament of any suspected illegal activity, fraud or corruption which may harm the financial interests of the Union. The Authority and the Authorising Officer of the European Parliament shall inform the National Contact Points concerned thereof.
Article 24 General rules on control
1. Control of compliance by European political parties and European political foundations with their obligations under this Regulation shall be exercised, in cooperation, by the Authority, by the Authorising Officer of the European Parliament and by the competent Member States. 2. The Authority shall control compliance by European political parties and European political foundations with their obligations under this Regulation, in particular in relation to Article 3, points (a), (b), and (d) to (f) of Article 4(1), points (a) to (e) and (g) of Article 5(1), Article 9(5) and (6), and Articles 20, 21 and 22. The Authorising Officer of the European Parliament shall control compliance by European political parties and European political foundations with the obligations relating to Union funding under this Regulation in accordance with the Financial Regulation. In carrying out such controls, the European Parliament shall take the necessary measures in the fields of the prevention of and the fight against fraud affecting the financial interests of the Union. 3. The control by the Authority and by the Authorising Officer of the European Parliament referred to in paragraph 2 shall not extend to compliance by European political parties and European political foundations with their obligations under applicable national law as referred to in Article 14. 4. European political parties and European political foundations shall provide any information requested by the Authority, the Authorising Officer of the European Parliament, the Court of Auditors, the European Anti-Fraud Office (OLAF) or Member States which is necessary for the purpose of carrying out the controls for which they are responsible under this Regulation. Upon request and for the purpose of controlling compliance with Article 20, European political parties and European political foundations shall provide the Authority with information concerning contributions made by individual members and the identity of such members. Moreover, where appropriate, the Authority may require European political parties to provide signed confirmatory statements from members holding elected mandates for the purpose of controlling compliance with the condition laid down in the first subparagraph of point (b) of Article 3(1).
Article 25 Implementation and control in respect of Union funding
1. Appropriations for the funding of European political parties and European political foundations shall be determined under the annual budgetary procedure and shall be implemented in accordance with this Regulation and the Financial Regulation. The terms and conditions for contributions and grants shall be laid down by the Authorising Officer of the European Parliament in the call for contributions and the call for proposals. 2. Control of funding received from the general budget of the European Union and its use shall be exercised in accordance with the Financial Regulation. Control shall also be exercised on the basis of annual certification by an external and independent audit, as provided for in Article 23(1). 3. The Court of Auditors shall exercise its audit powers in accordance with Article 287 TFEU. 4. Any document or information required by the Court of Auditors in order to enable it to carry out its task shall be supplied to it at its request by the European political parties and the European political foundations that receive funding in accordance with this Regulation. 5. The contribution and grant decision or agreement shall expressly provide for auditing by the European Parliament and the Court of Auditors, on the basis of records and on the spot, of the European political party which has received a contribution or the European political foundation which has received a grant from the general budget of the European Union. 6. The Court of Auditors and the Authorising Officer of the European Parliament, or any other external body authorised by the Authorising Officer of the European Parliament, may carry out the necessary checks and verifications on the spot in order to verify the legality of expenditure and the proper implementation of the provisions of the contribution and grant decision or agreement, and, in the case of European political foundations, the proper implementation of the work programme or action. The European political party or European political foundation in question shall supply any document or information needed to carry out this task. 7. OLAF may carry out investigations, including on-the-spot checks and inspections, in accordance with the provisions and procedures laid down in Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council ( 6 ) and Council Regulation (Euratom, EC) No 2185/96 ( 7 ), with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union in connection with contributions or grants under this Regulation. If appropriate, its findings may give rise to recovery decisions by the Authorising Officer of the European Parliament.
Article 26 Technical support
All technical support provided by the European Parliament to European political parties shall be based on the principle of equal treatment. It shall be granted on conditions no less favourable than those granted to other external organisations and associations that may be accorded similar facilities and shall be supplied against invoice and payment.
Article 27 Sanctions
1. In accordance with Article 16, the Authority shall decide to remove a European political party or a European political foundation from the Register by way of sanction in any of the following situations: (a) where the party or foundation in question has been found by a judgment having the force of res judicata to have engaged in illegal activities detrimental to the financial interests of the Union as defined in Article 106(1) of the Financial Regulation; (b) where it is established, in accordance with the procedures set out in Article 10(2) to (5), that it no longer fulfils one or more of the conditions set out in Article 3(1) or (2); (ba) where a decision to register the party or foundation in question is based on incorrect or misleading information for which the applicant is responsible, or where such a decision has been obtained by deceit; or (c) where a request by a Member State for de-registration on grounds of serious failure to fulfil obligations under national law meets the requirements set out in point (b) of Article 16(3). 2. The Authority shall impose financial sanctions in the following situations: (a) non-quantifiable infringements: (i) in the event of non-compliance with the requirements of Article 9(5) or (6); (ii) in the event of non-compliance with the commitments entered into and the information provided by a European political party or European political foundation in accordance with points (a), (b) and (d) to (f) of Article 4(1) and with points (a), (b), (d) and (e) of Article 5(1); (iii) in the event of failure to transmit the list of donors and their corresponding donations in accordance with Article 20(2) or to report donations in accordance with Article 20(3) and (4); (iv) where a European political party or a European political foundation has infringed the obligations laid down in Article 23(1) or Article 24(4); (v) where a European political party or a European political foundation has been found by a judgment having the force of res judicata to have engaged in illegal activities detrimental to the financial interests of the Union as defined in Article 106(1) of the Financial Regulation; (vi) where the European political party or the European political foundation concerned has at any time intentionally omitted to provide information or has intentionally provided incorrect or misleading information, or where the bodies authorised by this Regulation to audit or conduct checks on the beneficiaries of funding from the general budget of the European Union detect inaccuracies in the annual financial statements which are regarded as constituting material omissions or misstatements of items in accordance with the international accounting standards defined in Article 2 of Regulation (EC) No 1606/2002; (b) quantifiable infringements: (i) where a European political party or a European political foundation has accepted donations and contributions that are not permitted under Article 20(1) or (5), unless the conditions laid down in Article 20(6) are met; (ii) in the event of non-compliance with the requirements laid down in Articles 21 and 22. 3. The Authorising Officer of the European Parliament may exclude a European political party or a European political foundation from future Union funding for up to five years, or up to 10 years in cases of an infringement repeated within a five-year period, when it has been found guilty of any of the infringements listed in points (v) and (vi) of point (a) of paragraph 2. This is without prejudice to the powers of the Authorising Officer of the European Parliament as set out in Article 204n of the Financial Regulation. 4. For the purposes of paragraphs 2 and 3, the following financial sanctions shall be imposed on a European political party or a European political foundation: (a) in cases of non-quantifiable infringements, a fixed percentage of the annual budget of the European political party or European political foundation concerned: — 5 %, or — 7,5 % if there are concurrent infringements, or — 20 % if the infringement in question is a repeated infringement, or — a third of the percentages set out above if the European political party or European political foundation concerned has voluntarily declared the infringement before the Authority has officially opened an investigation, even in the case of a concurrent infringement or a repeated infringement, and the party or foundation concerned has taken the appropriate corrective measures, — 50 % of the annual budget of the European political party or European political foundation concerned for the preceding year, when it has been found by a judgment having the force of res judicata to have engaged in illegal activities detrimental to the financial interests of the Union as defined in Article 106(1) of the Financial Regulation; (b) in cases of quantifiable infringements, a fixed percentage of the amount of the irregular sums received or not reported in accordance with the following scale, up to a maximum of 10 % of the annual budget of the European political party or European political foundation concerned: — 100 % of the irregular sums received or not reported where those sums do not exceed EUR 50 000 , or — 150 % of the irregular sums received or not reported where those sums exceed EUR 50 000 but do not exceed EUR 100 000 , or — 200 % of the irregular sums received or not reported where those sums exceed EUR 100 000 but do not exceed EUR 150 000 , or — 250 % of the irregular sums received or not reported where those sums exceed EUR 150 000 but do not exceed EUR 200 000 , or — 300 % of the irregular sums received or not reported where those sums exceed EUR 200 000 , or — one third of the percentages indicated above if the European political party or European political foundation concerned has voluntarily declared the infringement before the Authority and/or the Authorising Officer of the European Parliament has officially opened an investigation and the party or foundation concerned has taken the appropriate corrective measures. For the application of the percentages indicated above, each donation or contribution shall be considered separately. 5. Whenever a European political party or a European political foundation has committed concurrent infringements of this Regulation, only the sanction laid down for the most serious infringement shall be imposed, unless otherwise provided in point (a) of paragraph 4. 6. The sanctions laid down in this Regulation shall be subject to a limitation period of five years from the date of commission of the infringement concerned or, in the case of continuing or repeated infringements, from the date on which those infringements ceased.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Democracy is one of the fundamental values on which the European Union is founded. To ensure the functioning of a representative democracy on the European level, the treaties determine that the citizens of the European Union are directly represented in the European Parliament. The right to freedom of association and the right to freedom of expression are fundamental rights of every citizen of the Union. Political parties fulfil an essential role in a representative democracy, creating a direct link between the citizens and the political system, thereby enhancing the legitimacy of the system. The same happens at European level: according to Article 10 of the Treaty on European Union, " political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union ". Article 12(2) of the Charter of Fundamental Rights of the European Union expresses the same principle. Fostering political debate across Europe on European issues through vibrant European political parties is a long standing Commission objective. In the run up to the 2014 European elections, the Commission issued a Recommendation 1 , calling on European and national political parties, supported by the institutions and the Member States, to take a numbe r of steps to strengthen the role of European political parties in contributing to forming European political awareness and to expressing the will of the citizens of the Union. One of these steps was the "Spitzenkandidat". European political parties responded to the Commission's call and the 2014 European Parliament elections were fundamentally different from previous ones. For the first time, they established a link between the results of the elections and the choice of the current European Commission President, Jean-Claude Juncker. "Spitzenkandidaten" or candidates for President of the European Commission, with different political programmes allowed voters to make an informed choice between alternative political platforms for Europe, rather than on exclusively national political issues, thus ‘europeanising’ the elections. Regulation No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations 2 was in troduced to increase the visibility, recognition, effectiveness, transparency and accountability of European political parties and their affiliated political foundations. Political parties and foundations satisfying a number of conditions were offered the opportunity to become European legal entities by registering at European level, and thereby enhancing access to European financial support. These conditions include representation in a sufficiently large number of EU Member States and respect, both in their programme and activities, of the values on which the EU is founded - respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities. An independent Authority for European political parties and foundations ("the Authority") was created, for the purpose of registering, controlling and, if necessary, imposing sanctions on European political parties and foundation, including to consider cases where such entities allegedly fail to respect these fundamental European values. Where doubts arise about whether a party or foundation is observing this requirement in practice, the European Parliament, the Council or the Commission may lodge a request with the Authority for European political parties and European political foundations to verify the situation. Before coming to a decision on whether to de-register a party or foundation, the Authority must consult a Committee of independent eminent persons. Nevertheless, the Com mission’s report on the 2014 European elections 3 found that work remained to be done to increase the participation of citizens and the inclusivity of elections, enhance the European dimension of the political debate, reverse the trend of low turnouts, furt her enhance the democratic legitimacy of the EU decision-making process, highlight affiliations between national and European parties, and promote political accountability. Moreover, despite the progress made with Regulation No 1141/2014, the existing rules have loopholes that need to be addressed. The European Parliament, as well as a number of European political parties, have called for improvements and adjustments to these rules. The European Parliament services in charge of the administration of this Regulation have worked on a number of cases resulting from inappropriate use of funding. In March 2017, Parliament held a plenary debate and issued an oral question inviting the Commission to respond both on the timing of any changes and on certain specific changes which concerned the level of co-financing, the possibility of multi-party membership of European Parliaments' Members, the number of members required for funding, the financing of referendum campaigns, the introduction of a financial capacity criterion and allowing the building of financial reserves. In this debate, the Commission e xpressed its willingness to engage with the Parliament, along with the Council, in monitoring the early stages of implementing the new rules. On 15 June 2017, Parliament adopted a resolution 4 calling upon the Commission to propose a revision of the current legal framework as soon as possible to address its shortcomings, especially with respect to the level of co-financing requested, and of the possibility of multi-party membership of European Parliaments' Members. Parliament and its political parties wrote to the Commission to restate their call for changes; a call elaborated in a comprehensive report provided to the Commission. Given the above and based on the extensive input obtained from various stakeholders (see section 3), the Commission has therefore decided to propose a limited number of targeted amendments to this Regulation. These aim to close the loopholes, improve transparency, to ensure the appropriate allocation and expenditure of limited resources from the EU budget, and thereby to strengthen the genuine electoral representation of European citizens by European political parties. The amendments will ensure that the existing rules are not circumvented or its provisions misused. The focused changes should be in place before the 2019 European elections. They will help address the challenges identified by the Commission in relation to the 2014 European elections, in particular in relation to the affiliations between national and European parties and increased political accountability. Specific i ssues addressed In the first place, the current rules are prone to abuse regarding the issue of who can sponsor the registration of a European political party, because they allow the required level of representation (i.e. in seven Member States) to be met either (i) by support from member parties represented in regional parliaments, a national Parliament or the European Parliament; (ii) by support from individual members of such parliaments or (iii) by a mixture of the two. In the first years after the introduction of funding for European political parties, most of the beneficiaries were alliances made up of national parties coming from the same political family. However, several European political parties created in recent years are composed mainly of individual politicians and/or strongly dominated by one or two national political parties. There are several cases of different members of a single national party sponsoring more than one European political party; in some extreme cases, a single member has sponsored more than one party. The Authority has also been confronted with practical problems linked to the multiparty membership. It is often unclear how to avoid double counting for representation, how to deal with prior memberships, and how to make a connection between the representation and funding criteria - including the issue of a Member of the European Parliament counting for different European political parties as regards, on the one hand, registration and, on the other hand, funding. The second issue of concern regards proportionality of the EU funding received to representation in the European Parliament. Currently, European political parties can apply for funding if they are represented in the European Parliament by at least one Member. A number of European political parties as well as the European Parliament's administration, have asked to increase the threshold of representation to three Members, to prevent the misuse of public funding via "one-man parties". However, the practical impact of such a change would be minimal, as at present even the least represented European political parties eligible for funding currently have 3 Members 5 (see graph). More importantly such a change would raise serious legal concerns related to fundamental rights of fre edom of association and equality of opportunities for parties presenting candidates for elections and would unduly limit the pluralistic nature of European politics. There is another way of addressing this concern by changing the distribution key for the funding of the eligible European political parties and the European political foundations. Currently, 15% of the total amount available is distributed equally to all parties which meet the one Member threshold, leaving 85% to be distributed in proporti on to each party’s share of elected Members (the same distribution key is used for foundations). This leads to a rather unbalanced reflection of the electoral representation in Parliament. The tables below 6 , provided by administration of the European Parli ament, show the effect of changing the fixed portion of funding compared to the portion related to the level of representation in Parliament. Lowering the set aside amount to 5% could help restore a more proper balance and thus lead to a fairer and better reflection of electoral representation in Parliament. In the third place, next to abuse and proportionality issues, European political parties and – to a larger extent – the political foundations have difficulties meeting the current co-financing threshold of 15%. The European Parliament services have also been confronted by some dubious practices in this respect, such as some parties seeking to meet the letter of the co-financing requirement via circular financial flows. As regards financial capacity, in the financial year 2015, the Parliament's external auditor flagged concerns in 8 out of 28 reports. This indicates that the beneficiaries’ own resources are not sufficient. In many cases, the shortfall in own resources from membership contributions and donations can only be balanced by the use of contributions in kind. In 2015 parties received contributions in kind amounting to €238,009 and foundations to €283,649. The objective evaluation of these contributions poses significant problems. In several cases, the Parliament's administration has been unable to verify this valuation in detail and ascertain whether the contributions were actually necessary for and directly related to the activity mentioned, and to determine whether the underlying activities were in the interest of the European party exclusively or possibly shared with a partner organisation. Fourthly, there is a lack of clarity and transparency in the existing rules regarding the steps to be taken in cases where a party or foundation ceases to comply with the registration criteria or is found to have been registered on the basis of incorrect information. Fifthly, based on the experience of Parliament's administration, there is a need to extend the scope of possible measures to recover funds misspent by parties and foundations.
Revised version (Article 27 Sanctions):
For the application of the percentages indicated above, each donation or contribution shall be considered separately. 5. Whenever a European political party or a European political foundation has committed concurrent infringements of this Regulation, only the sanction laid down for the most serious infringement shall be imposed, unless otherwise provided in point (a) of paragraph 4. 6. The sanctions laid down in this Regulation shall be subject to a limitation period of five years from the date of commission of the infringement concerned or, in the case of continuing or repeated infringements, from the date on which those infringements ceased. 7. Where a decision of the national supervisory authority as referred to in Article 10a has been repealed, or where a remedy against such decision has been granted, provided that all national remedies have been exhausted, the Authority shall review any sanction imposed pursuant to point (a)(vii) of paragraph 2 at the request of the European political party or European political foundation concerned.
Article 27a Responsibility of natural persons
Where the Authority imposes a financial sanction in the situations referred to in points (a)(v) or (a)(vi) of Article 27(2) it may, for the purpose of recovery pursuant to Article 30(2), establish that a natural person who is a member of the administrative, management or supervisory body of the European political party or European political foundation, or who has powers of representation, decision or control with regard to the European political party or European political foundation is also responsible for the infringement, in the following cases: (a) in the situation referred to in point (a)(v) of Article 27(2)where, in the judgment referred to in that provision, the natural person has been found to be also responsible for the illegal activities in question; (b) in the situation referred to in point (a)(vi) of Article 27(2) where the natural person is also responsible for the conduct or inaccuracies in question.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Democracy is one of the fundamental values on which the European Union is founded. To ensure the functioning of a representative democracy on the European level, the treaties determine that the citizens of the European Union are directly represented in the European Parliament. The right to freedom of association and the right to freedom of expression are fundamental rights of every citizen of the Union. Political parties fulfil an essential role in a representative democracy, creating a direct link between the citizens and the political system, thereby enhancing the legitimacy of the system. The same happens at European level: according to Article 10 of the Treaty on European Union, " political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union ". Article 12(2) of the Charter of Fundamental Rights of the European Union expresses the same principle. Fostering political debate across Europe on European issues through vibrant European political parties is a long standing Commission objective. In the run up to the 2014 European elections, the Commission issued a Recommendation 1 , calling on European and national political parties, supported by the institutions and the Member States, to take a numbe r of steps to strengthen the role of European political parties in contributing to forming European political awareness and to expressing the will of the citizens of the Union. One of these steps was the "Spitzenkandidat". European political parties responded to the Commission's call and the 2014 European Parliament elections were fundamentally different from previous ones. For the first time, they established a link between the results of the elections and the choice of the current European Commission President, Jean-Claude Juncker. "Spitzenkandidaten" or candidates for President of the European Commission, with different political programmes allowed voters to make an informed choice between alternative political platforms for Europe, rather than on exclusively national political issues, thus ‘europeanising’ the elections. Regulation No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations 2 was in troduced to increase the visibility, recognition, effectiveness, transparency and accountability of European political parties and their affiliated political foundations. Political parties and foundations satisfying a number of conditions were offered the opportunity to become European legal entities by registering at European level, and thereby enhancing access to European financial support. These conditions include representation in a sufficiently large number of EU Member States and respect, both in their programme and activities, of the values on which the EU is founded - respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities. An independent Authority for European political parties and foundations ("the Authority") was created, for the purpose of registering, controlling and, if necessary, imposing sanctions on European political parties and foundation, including to consider cases where such entities allegedly fail to respect these fundamental European values. Where doubts arise about whether a party or foundation is observing this requirement in practice, the European Parliament, the Council or the Commission may lodge a request with the Authority for European political parties and European political foundations to verify the situation. Before coming to a decision on whether to de-register a party or foundation, the Authority must consult a Committee of independent eminent persons. Nevertheless, the Com mission’s report on the 2014 European elections 3 found that work remained to be done to increase the participation of citizens and the inclusivity of elections, enhance the European dimension of the political debate, reverse the trend of low turnouts, furt her enhance the democratic legitimacy of the EU decision-making process, highlight affiliations between national and European parties, and promote political accountability. Moreover, despite the progress made with Regulation No 1141/2014, the existing rules have loopholes that need to be addressed. The European Parliament, as well as a number of European political parties, have called for improvements and adjustments to these rules. The European Parliament services in charge of the administration of this Regulation have worked on a number of cases resulting from inappropriate use of funding. In March 2017, Parliament held a plenary debate and issued an oral question inviting the Commission to respond both on the timing of any changes and on certain specific changes which concerned the level of co-financing, the possibility of multi-party membership of European Parliaments' Members, the number of members required for funding, the financing of referendum campaigns, the introduction of a financial capacity criterion and allowing the building of financial reserves. In this debate, the Commission e xpressed its willingness to engage with the Parliament, along with the Council, in monitoring the early stages of implementing the new rules. On 15 June 2017, Parliament adopted a resolution 4 calling upon the Commission to propose a revision of the current legal framework as soon as possible to address its shortcomings, especially with respect to the level of co-financing requested, and of the possibility of multi-party membership of European Parliaments' Members. Parliament and its political parties wrote to the Commission to restate their call for changes; a call elaborated in a comprehensive report provided to the Commission. Given the above and based on the extensive input obtained from various stakeholders (see section 3), the Commission has therefore decided to propose a limited number of targeted amendments to this Regulation. These aim to close the loopholes, improve transparency, to ensure the appropriate allocation and expenditure of limited resources from the EU budget, and thereby to strengthen the genuine electoral representation of European citizens by European political parties. The amendments will ensure that the existing rules are not circumvented or its provisions misused. The focused changes should be in place before the 2019 European elections. They will help address the challenges identified by the Commission in relation to the 2014 European elections, in particular in relation to the affiliations between national and European parties and increased political accountability. Specific i ssues addressed In the first place, the current rules are prone to abuse regarding the issue of who can sponsor the registration of a European political party, because they allow the required level of representation (i.e. in seven Member States) to be met either (i) by support from member parties represented in regional parliaments, a national Parliament or the European Parliament; (ii) by support from individual members of such parliaments or (iii) by a mixture of the two. In the first years after the introduction of funding for European political parties, most of the beneficiaries were alliances made up of national parties coming from the same political family. However, several European political parties created in recent years are composed mainly of individual politicians and/or strongly dominated by one or two national political parties. There are several cases of different members of a single national party sponsoring more than one European political party; in some extreme cases, a single member has sponsored more than one party. The Authority has also been confronted with practical problems linked to the multiparty membership. It is often unclear how to avoid double counting for representation, how to deal with prior memberships, and how to make a connection between the representation and funding criteria - including the issue of a Member of the European Parliament counting for different European political parties as regards, on the one hand, registration and, on the other hand, funding. The second issue of concern regards proportionality of the EU funding received to representation in the European Parliament. Currently, European political parties can apply for funding if they are represented in the European Parliament by at least one Member. A number of European political parties as well as the European Parliament's administration, have asked to increase the threshold of representation to three Members, to prevent the misuse of public funding via "one-man parties". However, the practical impact of such a change would be minimal, as at present even the least represented European political parties eligible for funding currently have 3 Members 5 (see graph). More importantly such a change would raise serious legal concerns related to fundamental rights of fre edom of association and equality of opportunities for parties presenting candidates for elections and would unduly limit the pluralistic nature of European politics. There is another way of addressing this concern by changing the distribution key for the funding of the eligible European political parties and the European political foundations. Currently, 15% of the total amount available is distributed equally to all parties which meet the one Member threshold, leaving 85% to be distributed in proporti on to each party’s share of elected Members (the same distribution key is used for foundations). This leads to a rather unbalanced reflection of the electoral representation in Parliament. The tables below 6 , provided by administration of the European Parli ament, show the effect of changing the fixed portion of funding compared to the portion related to the level of representation in Parliament. Lowering the set aside amount to 5% could help restore a more proper balance and thus lead to a fairer and better reflection of electoral representation in Parliament. In the third place, next to abuse and proportionality issues, European political parties and – to a larger extent – the political foundations have difficulties meeting the current co-financing threshold of 15%. The European Parliament services have also been confronted by some dubious practices in this respect, such as some parties seeking to meet the letter of the co-financing requirement via circular financial flows. As regards financial capacity, in the financial year 2015, the Parliament's external auditor flagged concerns in 8 out of 28 reports. This indicates that the beneficiaries’ own resources are not sufficient. In many cases, the shortfall in own resources from membership contributions and donations can only be balanced by the use of contributions in kind. In 2015 parties received contributions in kind amounting to €238,009 and foundations to €283,649. The objective evaluation of these contributions poses significant problems. In several cases, the Parliament's administration has been unable to verify this valuation in detail and ascertain whether the contributions were actually necessary for and directly related to the activity mentioned, and to determine whether the underlying activities were in the interest of the European party exclusively or possibly shared with a partner organisation. Fourthly, there is a lack of clarity and transparency in the existing rules regarding the steps to be taken in cases where a party or foundation ceases to comply with the registration criteria or is found to have been registered on the basis of incorrect information. Fifthly, based on the experience of Parliament's administration, there is a need to extend the scope of possible measures to recover funds misspent by parties and foundations.
Revised version (Article 27a Responsibility of natural persons):
(b) in the situation referred to in point (a)(vi) of Article 27(2) where the natural person is also responsible for the conduct or inaccuracies in question.
Article 28 Cooperation between the Authority, the Authorising Officer of the European Parliament and the Member States
1. The Authority, the Authorising Officer of the European Parliament and the Member States via the National Contact Points shall share information and keep each other regularly informed of matters related to funding provisions, controls and sanctions. 2. They shall also agree on practical arrangements for such exchange of information, including the rules regarding the disclosure of confidential information or evidence and the cooperation among Member States. 3. The Authorising Officer of the European Parliament shall inform the Authority of any findings which might give rise to the imposition of sanctions under Article 27(2) to (4), with a view to allowing the Authority to take appropriate measures. 4. The Authority shall inform the Authorising Officer of the European Parliament of any decision it has taken in relation to sanctions, in order to enable him or her to draw the appropriate consequences under the Financial Regulation.
Article 29 Corrective measures and principles of good administration
1. Before taking a final decision relating to any of the sanctions referred to in Article 27, the Authority or the Authorising Officer of the European Parliament shall give the European political party or the European political foundation concerned an opportunity to introduce the measures required to remedy the situation within a reasonable period of time, which shall not normally exceed one month. In particular, the Authority or the Authorising Officer of the European Parliament shall allow the possibility of correcting clerical and arithmetical errors, providing additional documents or information where necessary or correcting minor mistakes. 2. Where a European political party or a European political foundation has failed to take corrective measures within the period of time referred to in paragraph 1, the appropriate sanctions referred to in Article 27 shall be decided. 3. Paragraphs 1 and 2 shall not apply in relation to the conditions set out in points (b) to (d) of Article 3(1) and in point (c) of Article 3(2).
Article 30 Recovery
1. On the basis of a decision of the Authority removing a European political party or a European political foundation from the Register, the Authorising Officer of the European Parliament shall withdraw or terminate any ongoing decision or agreement on Union funding, except in the cases provided for in point (c) of Article 16(2) and in points (b) and (d) of Article 3(1). He or she shall also recover any Union funding, including any unspent Union funds from previous years. 2. A European political party or European political foundation on which a sanction has been imposed for any of the infringements listed in Article 27(1) and in points (v) and (vi) of Article 27(2)(a) shall for that reason no longer be in compliance with Article 18(2). As a result, the Authorising Officer of the European Parliament shall terminate the contribution or grant agreement or decision on Union funding received under this Regulation and shall recover amounts unduly paid under the contribution or grant agreement or decision, including any unspent Union funds from previous years. The Authorising Officer of the European Parliament shall also recover amounts unduly paid under the contribution or grant agreement or decision from a natural person in respect of whom a decision pursuant to Article 27a has been taken, taking into account, where applicable, exceptional circumstances relating to that natural person. In the event of such termination, payments by the Authorising Officer of the European Parliament shall be limited to the reimbursable expenditure incurred by the European political party or the eligible costs incurred by the European political foundation up to the date when the termination decision takes effect. This paragraph shall also be applicable to the cases referred to in point (c) of Article 16(2) and in points (b) and (d) of Article 3(1).
Article 31 Provision of information to citizens
Subject to Articles 21 and 22 and to their own statutes and internal processes, European political parties may, in the context of elections to the European Parliament, take all appropriate measures to inform citizens of the Union of the affiliations between national political parties and candidates and the European political parties concerned.
Article 32 Transparency
1. The European Parliament shall make public, under the authority of its Authorising Officer or under that of the Authority, on a website created for that purpose, the following: (a) the names and statutes of all registered European political parties and European political foundations, together with the documents submitted as part of their applications for registration in accordance with Article 8, at the latest four weeks after the Authority has adopted its decision and, thereafter, any amendments notified to the Authority pursuant to Article 9(5) and (6); (b) a list of applications that have not been approved, together with the documents submitted as part thereof, together with the application for registration in accordance with Article 8 and the grounds for rejection, at the latest four weeks after the Authority adopted its decision; (c) an annual report with a table of the amounts paid to each European political party and European political foundation, for each financial year for which contributions have been received or grants have been paid from the general budget of the European Union; (d) the annual financial statements and external audit reports referred to in Article 23(1), and, for European political foundations, the final reports on the implementation of the work programmes or actions; (e) the names of donors and their corresponding donations reported by European political parties and European political foundations in accordance with Article 20(2), (3) and (4), with the exception of donations from natural persons the value of which does not exceed EUR 1 500 per year and per donor, which shall be reported as 'minor donations'. Donations from natural persons the annual value of which exceeds EUR 1 500 and is below or equal to EUR 3 000 shall not be published without the corresponding donor's prior written consent to their publication. If no such prior consent has been given, such donations shall be reported as 'minor donations'. The total amount of minor donations and the number of donors per calendar year shall also be published; (f) the contributions referred to in Article 20(7) and (8) and reported by European political parties and European political foundations in accordance with Article 20(2), including the identity of the member parties or organisations which made those contributions; (g) the details of and reasons for any final decisions taken by the Authority pursuant to Article 27, including, where relevant, any opinions adopted by the committee of independent eminent persons in accordance with Articles 10 and 11, having due regard to Regulation (EC) No 45/2001; (h) the details of and reasons for any final decision taken by the Authorising Officer of the European Parliament pursuant to Article 27; (i) a description of the technical support provided to European political parties; (j) the evaluation report of the European Parliament on the application of this Regulation and on the funded activities referred to in Article 38; and (k) an updated list of Members of the European Parliament who are members of a European political party. 2. The European Parliament shall make public the list of legal persons who are members of a European political party, as annexed to the party statutes in accordance with Article 4(2) and updated in accordance with Article 9(6), as well as the total number of individual members. 3. Personal data shall be excluded from publication on the website referred to in paragraph 1 unless those personal data are published pursuant to points (a), (e), or (g) of paragraph 1. 4. European political parties and European political foundations shall, in a publicly available privacy statement, provide potential members and donors with the information required by Article 10 of Directive 95/46/EC, and shall inform them that their personal data will be processed for auditing and control purposes by the European Parliament, the Authority, OLAF, the Court of Auditors, Member States, or external bodies or experts authorised thereby, and that their personal data will be made public on the website referred to in paragraph 1 under the conditions set out in this Article. The Authorising Officer of the European Parliament, in application of Article 11 of Regulation (EC) No 45/2001, shall include the same information in calls for contributions or proposals as referred to in Article 18(1) of this Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Democracy is one of the fundamental values on which the European Union is founded. To ensure the functioning of a representative democracy on the European level, the treaties determine that the citizens of the European Union are directly represented in the European Parliament. The right to freedom of association and the right to freedom of expression are fundamental rights of every citizen of the Union. Political parties fulfil an essential role in a representative democracy, creating a direct link between the citizens and the political system, thereby enhancing the legitimacy of the system. The same happens at European level: according to Article 10 of the Treaty on European Union, " political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union ". Article 12(2) of the Charter of Fundamental Rights of the European Union expresses the same principle. Fostering political debate across Europe on European issues through vibrant European political parties is a long standing Commission objective. In the run up to the 2014 European elections, the Commission issued a Recommendation 1 , calling on European and national political parties, supported by the institutions and the Member States, to take a numbe r of steps to strengthen the role of European political parties in contributing to forming European political awareness and to expressing the will of the citizens of the Union. One of these steps was the "Spitzenkandidat". European political parties responded to the Commission's call and the 2014 European Parliament elections were fundamentally different from previous ones. For the first time, they established a link between the results of the elections and the choice of the current European Commission President, Jean-Claude Juncker. "Spitzenkandidaten" or candidates for President of the European Commission, with different political programmes allowed voters to make an informed choice between alternative political platforms for Europe, rather than on exclusively national political issues, thus ‘europeanising’ the elections. Regulation No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations 2 was in troduced to increase the visibility, recognition, effectiveness, transparency and accountability of European political parties and their affiliated political foundations. Political parties and foundations satisfying a number of conditions were offered the opportunity to become European legal entities by registering at European level, and thereby enhancing access to European financial support. These conditions include representation in a sufficiently large number of EU Member States and respect, both in their programme and activities, of the values on which the EU is founded - respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities. An independent Authority for European political parties and foundations ("the Authority") was created, for the purpose of registering, controlling and, if necessary, imposing sanctions on European political parties and foundation, including to consider cases where such entities allegedly fail to respect these fundamental European values. Where doubts arise about whether a party or foundation is observing this requirement in practice, the European Parliament, the Council or the Commission may lodge a request with the Authority for European political parties and European political foundations to verify the situation. Before coming to a decision on whether to de-register a party or foundation, the Authority must consult a Committee of independent eminent persons. Nevertheless, the Com mission’s report on the 2014 European elections 3 found that work remained to be done to increase the participation of citizens and the inclusivity of elections, enhance the European dimension of the political debate, reverse the trend of low turnouts, furt her enhance the democratic legitimacy of the EU decision-making process, highlight affiliations between national and European parties, and promote political accountability. Moreover, despite the progress made with Regulation No 1141/2014, the existing rules have loopholes that need to be addressed. The European Parliament, as well as a number of European political parties, have called for improvements and adjustments to these rules. The European Parliament services in charge of the administration of this Regulation have worked on a number of cases resulting from inappropriate use of funding. In March 2017, Parliament held a plenary debate and issued an oral question inviting the Commission to respond both on the timing of any changes and on certain specific changes which concerned the level of co-financing, the possibility of multi-party membership of European Parliaments' Members, the number of members required for funding, the financing of referendum campaigns, the introduction of a financial capacity criterion and allowing the building of financial reserves. In this debate, the Commission e xpressed its willingness to engage with the Parliament, along with the Council, in monitoring the early stages of implementing the new rules. On 15 June 2017, Parliament adopted a resolution 4 calling upon the Commission to propose a revision of the current legal framework as soon as possible to address its shortcomings, especially with respect to the level of co-financing requested, and of the possibility of multi-party membership of European Parliaments' Members. Parliament and its political parties wrote to the Commission to restate their call for changes; a call elaborated in a comprehensive report provided to the Commission. Given the above and based on the extensive input obtained from various stakeholders (see section 3), the Commission has therefore decided to propose a limited number of targeted amendments to this Regulation. These aim to close the loopholes, improve transparency, to ensure the appropriate allocation and expenditure of limited resources from the EU budget, and thereby to strengthen the genuine electoral representation of European citizens by European political parties. The amendments will ensure that the existing rules are not circumvented or its provisions misused. The focused changes should be in place before the 2019 European elections. They will help address the challenges identified by the Commission in relation to the 2014 European elections, in particular in relation to the affiliations between national and European parties and increased political accountability. Specific i ssues addressed In the first place, the current rules are prone to abuse regarding the issue of who can sponsor the registration of a European political party, because they allow the required level of representation (i.e. in seven Member States) to be met either (i) by support from member parties represented in regional parliaments, a national Parliament or the European Parliament; (ii) by support from individual members of such parliaments or (iii) by a mixture of the two. In the first years after the introduction of funding for European political parties, most of the beneficiaries were alliances made up of national parties coming from the same political family. However, several European political parties created in recent years are composed mainly of individual politicians and/or strongly dominated by one or two national political parties. There are several cases of different members of a single national party sponsoring more than one European political party; in some extreme cases, a single member has sponsored more than one party. The Authority has also been confronted with practical problems linked to the multiparty membership. It is often unclear how to avoid double counting for representation, how to deal with prior memberships, and how to make a connection between the representation and funding criteria - including the issue of a Member of the European Parliament counting for different European political parties as regards, on the one hand, registration and, on the other hand, funding. The second issue of concern regards proportionality of the EU funding received to representation in the European Parliament. Currently, European political parties can apply for funding if they are represented in the European Parliament by at least one Member. A number of European political parties as well as the European Parliament's administration, have asked to increase the threshold of representation to three Members, to prevent the misuse of public funding via "one-man parties". However, the practical impact of such a change would be minimal, as at present even the least represented European political parties eligible for funding currently have 3 Members 5 (see graph). More importantly such a change would raise serious legal concerns related to fundamental rights of fre edom of association and equality of opportunities for parties presenting candidates for elections and would unduly limit the pluralistic nature of European politics. There is another way of addressing this concern by changing the distribution key for the funding of the eligible European political parties and the European political foundations. Currently, 15% of the total amount available is distributed equally to all parties which meet the one Member threshold, leaving 85% to be distributed in proporti on to each party’s share of elected Members (the same distribution key is used for foundations). This leads to a rather unbalanced reflection of the electoral representation in Parliament. The tables below 6 , provided by administration of the European Parli ament, show the effect of changing the fixed portion of funding compared to the portion related to the level of representation in Parliament. Lowering the set aside amount to 5% could help restore a more proper balance and thus lead to a fairer and better reflection of electoral representation in Parliament. In the third place, next to abuse and proportionality issues, European political parties and – to a larger extent – the political foundations have difficulties meeting the current co-financing threshold of 15%. The European Parliament services have also been confronted by some dubious practices in this respect, such as some parties seeking to meet the letter of the co-financing requirement via circular financial flows. As regards financial capacity, in the financial year 2015, the Parliament's external auditor flagged concerns in 8 out of 28 reports. This indicates that the beneficiaries’ own resources are not sufficient. In many cases, the shortfall in own resources from membership contributions and donations can only be balanced by the use of contributions in kind. In 2015 parties received contributions in kind amounting to €238,009 and foundations to €283,649. The objective evaluation of these contributions poses significant problems. In several cases, the Parliament's administration has been unable to verify this valuation in detail and ascertain whether the contributions were actually necessary for and directly related to the activity mentioned, and to determine whether the underlying activities were in the interest of the European party exclusively or possibly shared with a partner organisation. Fourthly, there is a lack of clarity and transparency in the existing rules regarding the steps to be taken in cases where a party or foundation ceases to comply with the registration criteria or is found to have been registered on the basis of incorrect information. Fifthly, based on the experience of Parliament's administration, there is a need to extend the scope of possible measures to recover funds misspent by parties and foundations.
Revised version (Article 32 Transparency):
2. The European Parliament shall make public the list of legal persons who are members of a European political party, as annexed to the party statutes in accordance with Article 4(2) and updated in accordance with Article 9(6), as well as the total number of individual members. 3. Personal data shall be excluded from publication on the website referred to in paragraph 1 unless those personal data are published pursuant to points (a), (e), or (g) of paragraph 1. 4. European political parties and European political foundations shall, in a publicly available privacy statement, provide potential members and donors with the information required by Article 10 of Directive 95/46/EC, and shall inform them that their personal data will be processed for auditing and control purposes by the European Parliament, the Authority, OLAF, the Court of Auditors, Member States, or external bodies or experts authorised thereby, and that their personal data will be made public on the website referred to in paragraph 1 under the conditions set out in this Article. The Authorising Officer of the European Parliament, in application of Article 11 of Regulation (EC) No 45/2001, shall include the same information in calls for contributions or proposals as referred to in Article 18(1) of this Regulation.
Article 33 Protection of personal data
1. In processing personal data pursuant to this Regulation, the Authority, the European Parliament and the committee of independent eminent persons established by Article 11 shall comply with Regulation (EC) No 45/2001. For the purposes of the processing of personal data, they shall be considered data controllers in accordance with point (d) of Article 2 of that Regulation. 2. In processing personal data pursuant to this Regulation, European political parties and European political foundations, Member States when exercising control over aspects relating to the financing of European political parties and European political foundations in accordance with Article 24, and the independent bodies or experts authorised to audit accounts in accordance with Article 23(1) shall comply with Directive 95/46/EC and with the national provisions adopted pursuant thereto. For the purposes of the processing of personal data, they shall be considered data controllers in accordance with point (d) of Article 2 of that Directive. 3. The Authority, the European Parliament and the committee of independent eminent persons established by Article 11 shall ensure that personal data collected by them pursuant to this Regulation are not used for any purpose other than to ensure the legality, regularity and transparency of the funding of European political parties and European political foundations and the membership of European political parties. They shall erase all personal data collected for that purpose at the latest 24 months after the publication of the relevant parts in accordance with Article 32. 4. The Member States and independent bodies or experts authorised to audit accounts shall use the personal data they receive only in order to exercise control over the financing of European political parties and European political foundations. They shall erase those personal data in accordance with applicable national law after transmission pursuant to Article 28. 5. Personal data may be retained beyond the time limits laid down in paragraph 3 or provided for by the applicable national law as referred to in paragraph 4 where such retention is necessary for the purposes of legal or administrative proceedings relating to the funding of a European political party or a European political foundation or the membership of a European political party. All such personal data shall be erased at the latest one week after the date of conclusion of the said proceedings by a final decision, or after any audits, appeals, litigation or claims have been disposed of. 6. The data controllers referred to in paragraphs 1 and 2 shall implement appropriate technical and organisational measures to protect personal data against accidental or unlawful destruction, accidental loss, alteration or unauthorised disclosure or access, in particular where the processing of such data involves their transmission over a network, and against all other unlawful forms of processing. 7. The European Data Protection Supervisor shall be responsible for monitoring and ensuring that the Authority, the European Parliament and the committee of independent eminent persons established by Article 11 respect and protect the fundamental rights and freedoms of natural persons in the processing of personal data pursuant to this Regulation. Without prejudice to any judicial remedy, any data subject may lodge a complaint with the European Data Protection Supervisor if he or she considers that his or her right to the protection of his or her personal data has been infringed as a result of the processing thereof by the Authority, the European Parliament or the committee. 8. European political parties and European political foundations, the Member States and the independent bodies or experts authorised to audit accounts under this Regulation shall be liable in accordance with applicable national law for any damage they cause in the processing of personal data pursuant to this Regulation. The Member States shall ensure that effective, proportionate and dissuasive sanctions are applied for infringements of this Regulation, of Directive 95/46/EC and of the national provisions adopted pursuant thereto, and in particular for the fraudulent use of personal data.
Article 34 Right to be heard
Before the Authority or the Authorising Officer of the European Parliament takes a decision which may adversely affect the rights of a European political party, a European political foundation, an applicant as referred to in Article 8 or a natural person as referred to in Article 27a, it shall hear the representatives of the European political party, European political foundation or applicant, or the natural person concerned. The Authority or the European Parliament shall duly state the reasons for its decision.
Article 35 Right of appeal
Decisions taken pursuant to this Regulation may be the subject of court proceedings before the Court of Justice of the European Union, in accordance with the relevant provisions of the TFEU.
Article 36 Exercise of the delegation
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Article 7(2) and Article 8(3) shall be conferred on the Commission for a period of five years from 24 November 2014. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period. 3. The delegation of power referred to in Article 7(2) and Article 8(3) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 5. A delegated act adopted pursuant to Article 7(2) and Article 8(3) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.
Article 37 Committee procedure
1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011. 2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article 38 Evaluation
The European Parliament shall, after consulting the Authority, publish by 31 December 2021 and every five years thereafter a report on the application of this Regulation and on the activities funded. The report shall indicate, where appropriate, possible amendments to be made to the statute and funding systems. No more than six months after the publication of the report by the European Parliament, the Commission shall present a report on the application of this Regulation in which particular attention will be paid to its implications for the position of small European political parties and European political foundations. The report shall, if appropriate, be accompanied by a legislative proposal to amend this Regulation.
Article 39 Effective application
Member States shall make such provision as is appropriate to ensure the effective application of this Regulation.
Article 40 Repeal
Regulation (EC) No 2004/2003 is repealed with effect from the date of entry into force of this Regulation. It shall however continue to apply as regards acts and commitments relating to the funding of political parties and political foundations at European level for the 2014, 2015, 2016 and 2017 budget years.
Article 40a Transitional provision
1. The provisions of this Regulation applicable prior to 4 May 2018 shall continue to apply as regards acts and commitments relating to the funding of European political parties and European political foundations at European level for the financial year 2018. 2. By way of derogation from Article 18(2a), the Authorising Officer of the European Parliament shall, before deciding on an application on funding for the financial year 2019, request the evidence referred to in Article 18(2a) only for a period from 5 July 2018. 3. European political parties registered before 4 May 2018 shall, at the latest by 5 July 2018, submit documents proving that they satisfy the conditions laid down in points (b) and (ba) of Article 3(1). 4. The Authority shall remove a European political party and its affiliated European political foundation from the Register where the party in question fails to prove within the period of time set out in paragraph 3 that it meets the conditions laid down in points (b) and (ba) of Article 3(1).
Article 41 Entry into force and application
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union . The Commission shall adopt delegated acts as referred to in Article 7(2) and in point (a) of Article 8(3) by no later than 1 July 2015. This Regulation shall apply from 1 January 2017. The Authority referred to in Article 6 shall however be set up by 1 September 2016. European political parties and European political foundations registered after 1 January 2017 may only apply for funding under this Regulation for activities starting in the 2018 budget year or thereafter. This Regulation shall be binding in its entirety and directly applicable in all Member States.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Democracy is one of the fundamental values on which the European Union is founded. To ensure the functioning of a representative democracy on the European level, the treaties determine that the citizens of the European Union are directly represented in the European Parliament. The right to freedom of association and the right to freedom of expression are fundamental rights of every citizen of the Union. Political parties fulfil an essential role in a representative democracy, creating a direct link between the citizens and the political system, thereby enhancing the legitimacy of the system. The same happens at European level: according to Article 10 of the Treaty on European Union, " political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union ". Article 12(2) of the Charter of Fundamental Rights of the European Union expresses the same principle. Fostering political debate across Europe on European issues through vibrant European political parties is a long standing Commission objective. In the run up to the 2014 European elections, the Commission issued a Recommendation 1 , calling on European and national political parties, supported by the institutions and the Member States, to take a numbe r of steps to strengthen the role of European political parties in contributing to forming European political awareness and to expressing the will of the citizens of the Union. One of these steps was the "Spitzenkandidat". European political parties responded to the Commission's call and the 2014 European Parliament elections were fundamentally different from previous ones. For the first time, they established a link between the results of the elections and the choice of the current European Commission President, Jean-Claude Juncker. "Spitzenkandidaten" or candidates for President of the European Commission, with different political programmes allowed voters to make an informed choice between alternative political platforms for Europe, rather than on exclusively national political issues, thus ‘europeanising’ the elections. Regulation No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations 2 was in troduced to increase the visibility, recognition, effectiveness, transparency and accountability of European political parties and their affiliated political foundations. Political parties and foundations satisfying a number of conditions were offered the opportunity to become European legal entities by registering at European level, and thereby enhancing access to European financial support. These conditions include representation in a sufficiently large number of EU Member States and respect, both in their programme and activities, of the values on which the EU is founded - respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities. An independent Authority for European political parties and foundations ("the Authority") was created, for the purpose of registering, controlling and, if necessary, imposing sanctions on European political parties and foundation, including to consider cases where such entities allegedly fail to respect these fundamental European values. Where doubts arise about whether a party or foundation is observing this requirement in practice, the European Parliament, the Council or the Commission may lodge a request with the Authority for European political parties and European political foundations to verify the situation. Before coming to a decision on whether to de-register a party or foundation, the Authority must consult a Committee of independent eminent persons. Nevertheless, the Com mission’s report on the 2014 European elections 3 found that work remained to be done to increase the participation of citizens and the inclusivity of elections, enhance the European dimension of the political debate, reverse the trend of low turnouts, furt her enhance the democratic legitimacy of the EU decision-making process, highlight affiliations between national and European parties, and promote political accountability. Moreover, despite the progress made with Regulation No 1141/2014, the existing rules have loopholes that need to be addressed. The European Parliament, as well as a number of European political parties, have called for improvements and adjustments to these rules. The European Parliament services in charge of the administration of this Regulation have worked on a number of cases resulting from inappropriate use of funding. In March 2017, Parliament held a plenary debate and issued an oral question inviting the Commission to respond both on the timing of any changes and on certain specific changes which concerned the level of co-financing, the possibility of multi-party membership of European Parliaments' Members, the number of members required for funding, the financing of referendum campaigns, the introduction of a financial capacity criterion and allowing the building of financial reserves. In this debate, the Commission e xpressed its willingness to engage with the Parliament, along with the Council, in monitoring the early stages of implementing the new rules. On 15 June 2017, Parliament adopted a resolution 4 calling upon the Commission to propose a revision of the current legal framework as soon as possible to address its shortcomings, especially with respect to the level of co-financing requested, and of the possibility of multi-party membership of European Parliaments' Members. Parliament and its political parties wrote to the Commission to restate their call for changes; a call elaborated in a comprehensive report provided to the Commission. Given the above and based on the extensive input obtained from various stakeholders (see section 3), the Commission has therefore decided to propose a limited number of targeted amendments to this Regulation. These aim to close the loopholes, improve transparency, to ensure the appropriate allocation and expenditure of limited resources from the EU budget, and thereby to strengthen the genuine electoral representation of European citizens by European political parties. The amendments will ensure that the existing rules are not circumvented or its provisions misused. The focused changes should be in place before the 2019 European elections. They will help address the challenges identified by the Commission in relation to the 2014 European elections, in particular in relation to the affiliations between national and European parties and increased political accountability. Specific i ssues addressed In the first place, the current rules are prone to abuse regarding the issue of who can sponsor the registration of a European political party, because they allow the required level of representation (i.e. in seven Member States) to be met either (i) by support from member parties represented in regional parliaments, a national Parliament or the European Parliament; (ii) by support from individual members of such parliaments or (iii) by a mixture of the two. In the first years after the introduction of funding for European political parties, most of the beneficiaries were alliances made up of national parties coming from the same political family. However, several European political parties created in recent years are composed mainly of individual politicians and/or strongly dominated by one or two national political parties. There are several cases of different members of a single national party sponsoring more than one European political party; in some extreme cases, a single member has sponsored more than one party. The Authority has also been confronted with practical problems linked to the multiparty membership. It is often unclear how to avoid double counting for representation, how to deal with prior memberships, and how to make a connection between the representation and funding criteria - including the issue of a Member of the European Parliament counting for different European political parties as regards, on the one hand, registration and, on the other hand, funding. The second issue of concern regards proportionality of the EU funding received to representation in the European Parliament. Currently, European political parties can apply for funding if they are represented in the European Parliament by at least one Member. A number of European political parties as well as the European Parliament's administration, have asked to increase the threshold of representation to three Members, to prevent the misuse of public funding via "one-man parties". However, the practical impact of such a change would be minimal, as at present even the least represented European political parties eligible for funding currently have 3 Members 5 (see graph). More importantly such a change would raise serious legal concerns related to fundamental rights of fre edom of association and equality of opportunities for parties presenting candidates for elections and would unduly limit the pluralistic nature of European politics. There is another way of addressing this concern by changing the distribution key for the funding of the eligible European political parties and the European political foundations. Currently, 15% of the total amount available is distributed equally to all parties which meet the one Member threshold, leaving 85% to be distributed in proporti on to each party’s share of elected Members (the same distribution key is used for foundations). This leads to a rather unbalanced reflection of the electoral representation in Parliament. The tables below 6 , provided by administration of the European Parli ament, show the effect of changing the fixed portion of funding compared to the portion related to the level of representation in Parliament. Lowering the set aside amount to 5% could help restore a more proper balance and thus lead to a fairer and better reflection of electoral representation in Parliament. In the third place, next to abuse and proportionality issues, European political parties and – to a larger extent – the political foundations have difficulties meeting the current co-financing threshold of 15%. The European Parliament services have also been confronted by some dubious practices in this respect, such as some parties seeking to meet the letter of the co-financing requirement via circular financial flows. As regards financial capacity, in the financial year 2015, the Parliament's external auditor flagged concerns in 8 out of 28 reports. This indicates that the beneficiaries’ own resources are not sufficient. In many cases, the shortfall in own resources from membership contributions and donations can only be balanced by the use of contributions in kind. In 2015 parties received contributions in kind amounting to €238,009 and foundations to €283,649. The objective evaluation of these contributions poses significant problems. In several cases, the Parliament's administration has been unable to verify this valuation in detail and ascertain whether the contributions were actually necessary for and directly related to the activity mentioned, and to determine whether the underlying activities were in the interest of the European party exclusively or possibly shared with a partner organisation. Fourthly, there is a lack of clarity and transparency in the existing rules regarding the steps to be taken in cases where a party or foundation ceases to comply with the registration criteria or is found to have been registered on the basis of incorrect information. Fifthly, based on the experience of Parliament's administration, there is a need to extend the scope of possible measures to recover funds misspent by parties and foundations.
Revised version (Article 41 Entry into force and application):
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union . The Commission shall adopt delegated acts as referred to in Article 7(2) and in point (a) of Article 8(3) by no later than 1 July 2015. This Regulation shall apply from 1 January 2017. The Authority referred to in Article 6 shall however be set up by 1 September 2016. European political parties and European political foundations registered after 1 January 2017 may only apply for funding under this Regulation for activities starting in the 2018 budget year or thereafter.