New Law on Funding of Political Parties

The Argentine Executive presented the bill on July 20, 2018. After the Senate approved an amended version, the Argentine Congress passed Law N° 27,504 on May 15, 2019.   

II. Amendments and novelties

The law passed by the Argentine Congress includes certain novelties and modifications regarding the original bill which we briefly commented on our previous article https://www.marval.com/publicacion/financiamiento-de-partidos-politicos-13328&lang=en , aiming to strengthen the transparency and control of the funding of political parties as well as social inclusion.  

The following amendments and novelties are noteworthy:

1. Affidavit of contributions to political parties. In order to enable the use of the contribution, the contributor must present a sworn affidavit on the contributor’s free consent and declaring that it does not fall within any of the prohibitions provided by the law. This sworn statement must be done on a digital platform that is yet to be created by the Argentine Electoral Justice.  
2. Political parties private funding.  Inheritances and legacies are now accepted as a source of private funding.
3. Permit holders and government contractors. In addition to public utilities and public works’ concessionaires, permit holders and government contractors of public services and works (whether of the national, provincial, municipal or of the City of Buenos Aires’ governments) are now also banned from making contributions or donations in favor of political parties or of the Permanent Party Fund (Fondo Partidario Permanente).  
4. Individuals or corporations subject to ongoing criminal investigations for conducts foreseen in taxation criminal law. They are forbidden to make contributions or donations in favor of political parties or in favor of the Permanent Party Fund (Fondo Partidario Permanente). Although the law passed by the Argentine Congress also included under such prohibition the case of individuals or corporations subject to pending proceedings with the Argentine Tax Court (Tribunal Fiscal de la Nación), this was later vetoed by means of Presidential Decree No. 388/2019.
5. Contributions in kind. They are defined as the provision of services or the free delivery of a good in favor of a political party. If, according to the market value and practices, the value of such contribution reaches 5,000 electoral modules which is the equivalent of ARS 67,500 (approximately USD 1,474 at a current exchange rate), the contributor and the political party that receives the contribution must subscribe to a record by means of which they identify the contribution and provide its features and estimated value.
6. Political Patronage. The law passed by the Argentine Congress does not contain the provision included in the original bill, which criminalized political patronage as the action of offering, promising or delivering money or any gift, favor, promise or patrimonial advantage in exchange for making a voter vote in a certain manner, sanctioning such action with imprisonment from six months to three years, and disqualification from six months to ten years for the exercise of the right to elect and be elected for public office.
7. Control procedure. The law develops the stages of the financial control procedure. It also clarifies that criminal jurisdiction will only be exercised once a final decision has been issued in the patrimonial control procedure.
8. Political training: From the annual contribution that political parties receive to maintain their institutions , 20% must be used for the purposes of both political training (of their members and leaders) and research.
9. Promoting gender equality and youth training: At least 30% of the funds allocated to political training must be used for the training, promotion and development of political leadership skills of female members of the political party. Another 30% must be used to train members under 30 years of age.
10. Audiovisual media services: The law provides that the obligation to grant 5% of the total broadcasting time for electoral purposes also applies to paid TV services. As of the year 2020, half of said 5% must be assigned for free and the other half will be considered as payment on account of Argentine taxes. The law does not create the “Registry of Campaign Advertising Providers”, as provided in the initial bill.
11. Digital propaganda: The law provides for the regulation and control of digital political propaganda. Among the obligations established thereto, social media accounts, websites and any other digital communication channels both of the political party itself, and those of their candidates and high level party authorities, must be registered.
12. Register of pollsters:  The law provides that the Argentine Electoral Chamber (Cámara Nacional Electoral) will create the “Register of Survey Companies and Opinion Polls ".

II. Final comments

Although some amendments incorporated in the law passed by the Argentine Congress are important, several critical aspects of the original bill have been maintained after the parliamentary debate.

Among them, the possibility for private legal entities to make contributions to political campaigns, the limits on private contributions, the obligation to make contributions only by means that allow identification of the donors and traceability of contributions, and the reduction of time that audiovisual media services must grant for electoral purposes.

For further information about the financing law of political parties and the original bill presented by the Argentine Executive, see https://www.marval.com/publicacion/financiamiento-de-partidos-politicos-13328&lang=en .