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MT 27 March 2016

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maltatoday, SUNDAY, 27 MARCH 2016 4 News PN loans' scheme doesn't fall under financing rules CONTINUED FROM PAGE 1 Malta's party financing rules allow par- ties to accept loans given on terms more favourable than ordinary commercial terms, but these must then be considered as a donation. The 'donation' element of a loan is the difference between the interest payable on a commercial loan, and that on the more favourable party loan. But as long as that difference is not in excess of €25,000, the de- tails of the donor's name need not be recorded. Fenech told MaltaToday that the names of the 'Cedoli 2016' credi- tors will not be disclosed, when asked by this newspaper whether the scheme could be used to break down a large loan into smaller, €10,000 loans. Under party financing rules, the loans will still have to be accounted for by the PN in its annual finan- cial records submitted to the Elec- toral Commissioner; but as private commercial loans the names of the creditors will not be published. "This is not a scheme intended for large donors. It is a private mat- ter between the party and the cred- itor who wants to help finance the party in this way. In 2013, Labour's extensive electoral campaign cost them millions and we are seeing the results of the 'payback' today… but ours is a transparent way of fi- nancing parties, and it introduces an arm's length system because it does not imply the return of a favour to those who loan us the money," Fenech said. Former Nationalist MP Franco Debono, who drafted the bill that later became Malta's party financ- ing law, said the PN's scheme re- flected the law's "radical change in attitude". "Basically, transactions and schemes have to be above board and done in a transparent and ac- countable manner," Debono said. Details of how the PN's loan sys- tem will be managed have yet to emerge, and it is unclear whether the Electoral Commissioner – who will monitor party financing rules – will also be charged to ensure whether the interest payable is dis- charged, since parties have often employed loans as a form of dona- tion. "On paper the loan scheme seems to be within the parameters of the law. But one needs to see the way it is operated throughout the years," Alternattiva Demokratika deputy chairperson Carmel Ca- copardo said. "This would be done through an analysis of the financial reporting which the Financing of Political Parties Act establishes." Franco Debono said that dona- tions imply that donors do not get anything in return. "A loan could be a donation in disguise if, for example, no interest is payable. However in this case, since inter- est is due, this would not qualify as a donation since the lender is getting interest in return. Whilst such transactions would probably not qualify as donations, they still have to be declared in the audited accounts of the parties, thus falling within the purview of the provi- sions introduced by the same party financing law." Debono said that the PN's scheme was the right jumping board for a debate on state funding. "I always believed Malta should never start discussing state funding before the structure ensuring transparency and accountability in party financ- ing is in place, but now since the structure is firmly in place, one can start discussing it." While the Maltese law prohib- its the acceptance of anonymous donations by political parties as a matter of principle, the rules still allow any donation below €50 to be collected anonymously during party telethons and fund-raisers. But the positive effect of a prohi- bition on parties accepting anony- mous donations is impaired by the absence of an obligation on parties to register donations below €500. The Council of Europe's anti- corruption watchdog GRECO said that the regime introduced "re- mains incoherent and may be in- terpreted as condoning the accept- ance of donations from donors whose identity is not known to a political party or an independent candidate precisely due to the ab- sence of a requirement to register the donations." Transactions and schemes have to be above board and done in a transparent manner Legal notice will remove 187 illegal billboards A revised legal notice is to be published next week seeking the removal of the illegal bill- boards that have peppered the Maltese islands for the past decade, some of which were also used by the Labour Party during its political campaigns. The Malta Environment and Planning Authority's enforce- ment unit has identified 187 such billboards. MEPA has issued enforce- ment orders calling on a num- ber of billboard operators to comply with the adverts regu- lations order, but the orders have largely been ignored. Most of the operators have taken advantage of loopholes in the present laws and managed to bypass the system. One way some operators have responded to an enforcement order is to change a commer- cial advert into a non-com- mercial one – in doing so the enforcement order is nullified. This was usually followed a few days later by the appearance of yet another commercial bill- board. The new legal notice, driven by the new parliamentary sec- retary responsible for planning, Deborah Schembri, will change the regulations on billboards to ensure a fair competitive mar- ket and at the same time ensure serious consideration for aes- thetics and the safety of motor- ists and pedestrians. The legal notice will elimi- nate loopholes to provide for a more effective enforcement procedure with higher fines. Enough time will be allowed to have billboards removed within a specified timeframe, and fail- ure to do so will lead to admin- istrative and direct action fines. The legal notice will also tar- get stationary and parked vehi- cles which are used for the dis- play of advertisements. These may be towed away and fines issued against them. All billboards will have to be registered with Transport Malta and shall have a yearly licence of €1,500. The term 'Political Advertisement' will be redefined to ensure that po- litical billboards may only be allowed from the time when an election is announced. Fines are being introduced ranging from €1,000 for the first offence, going up to a max- imum €5,000. Ann Fenech

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