Recommendations to strengthen regulation of political donations and combat online threats published by independent review
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The Review by former Permanent Secretary Philip Rycroft
makes recommendations on cryptoassets, overseas
and corporate donations, and rules on non-party
campaigners
Review makes 17 recommendations to better protect UK
political parties and processes from direct and indirect
interference by malign foreign forces
Calls for stronger use of existing legislation to combat
increasingly hostile...Request free
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An independent review into foreign financial influence and interference has issued a warning over the growing threat of malign forces on UK democratic processes today (Wednesday 25 March). The Independent Review into Countering Foreign Financial Influence and Interference in UK Politics was commissioned by government following the sentencing of the former MEP Nathan Gill for bribery, alongside other recent cases, which exposed vulnerabilities in the UK's political and electoral systems, particularly from foreign states. The Review, published today and led by the former Permanent Secretary Philip Rycroft, assesses the resilience of political parties and processes against increasingly common methods of foreign interference. It finds that heightened geo-political tensions, combined with advances in technology, have allowed hostile foreign states to step up their efforts to interfere in UK politics and further erode public trust in our democratic system.
The Review makes 17 recommendations for strengthening the
rules governing political parties and political finance,
and more robustly defending the UK in the growing
‘information war'. They include recommendations for
strengthening the Representation of the People
Bill currently progressing through
Parliament. “The threat of foreign financial interference in our politics is real, persistent and sustained. So far, the impact on our democratic life has been contained – I am not pushing the panic button. “But in our volatile political environment, marginal impacts could have an increasingly disproportionate bearing on political outcomes, and there is no sign that our adversaries intend to relent in their attempts to subvert our politics. “So, I am ringing the alarm bell. The government must act quickly to further limit the risk of foreign financial interference in our politics. In these uncertain times, we must remember: the price of democratic freedom is eternal vigilance.” Cryptoassets Cryptoassets are poised to be a significant factor in modern economies, but current regulatory frameworks are struggling to keep pace. There is a risk that donations in cryptoassets are used to channel foreign money into the UK's political system because they can be difficult to trace and the use of AI could obscure crypto donations below reporting thresholds. The Review recommends the Representation of the People Bill introduces a moratorium on political donations made in cryptoassets until Parliament and the Electoral Commission are satisfied that regulation is effective. Overseas donations British citizens living abroad who are registered to vote can continue to make a legitimate and welcome contribution to UK political life, including through donations to political parties. However, tracing the source of funds from overseas is more complex, and where concerns arise, investigations are significantly more challenging. Therefore, this route presents a risk of foreign funds entering UK politics. A cap of £100,000 to £300,000 per overseas donor per year is recommended to mitigate the risk that this route is used to allow large foreign donations to slip through the net. Corporate donations The Representation of the People Bill seeks to tighten rules on corporate donations, including addressing the issue of shell companies acting as vehicles for foreign money. However, the Review recommends further tightening of the rules. The Review recommends profits, not revenue, should determine eligibility for corporate donations, and no company should be permitted to donate more than its annual profits. This will provide greater assurance that donations have come from genuine and audited economic activity before being accepted. Non-party campaigners The Political Parties, Elections and Referendums Act 2000 introduced rules on donations and spending for political parties and non-party campaigners. However, the legislation leaves significant loopholes, not least for non-party campaigners. Outside of election times, there is no transparency on how non-party campaigners and candidates raise and spend money, and for certain non-party campaigners nothing to stop donations from coming abroad. The Review recommends that all the donations received for political campaigning should come from permissible donors and there should be increased transparency about who has made donations to them. Political parties
Parties have a critical responsibility to ensure that
political finance is kept clean of contamination by foreign
money, and they must do this in a way that commands public
confidence. To support them to do this, the Review
recommends the ‘Know your donor' provisions in
the Representation of the People Bill should
align more closely with anti-money laundering due diligence
requirements; parties should sign up to a code of
conduct to deal with the risk of foreign money entering UK
politics; and parties must submit their annual reports and
campaign spending in a standardised format for greater
transparency. The Review identifies online foreign interference as the most pressing concern, describing how hostile states are able to use digital platforms to undermine confidence in the political process. Although current legislation provides powers to address this, dealing with hostile state online interference should be a far higher priority for Government. There should be clear lead accountability at ministerial and senior official level for leading the work to combat foreign online political interference, with resources commensurate to the challenge this poses to our democracy. Enforcement powers and oversight A tough regulatory framework over political finance in the UK is necessary to give reassurance to the public. The Electoral Commission's powers should be broadened to enable it both to share and request information from any relevant person or organisation. It should coordinate with the government, security services, and police to provide political parties with regular updates on foreign financial interference risks. The Government should establish a police centre of excellence to investigate complex electoral offences involving foreign interference, and the Political Parties, Elections and Referendums Act should be amended to lower the burden of proof for criminal offences to 'reasonable cause to suspect'. Finally, the Cabinet Secretary should prioritise this agenda by allocating to a Permanent Secretary lead for sustaining our democracy and coordinating the response to threats. Notes to editors:
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