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Italy: Legislation on Public Financing for Political Parties

(Mar. 11, 2014) On February 28, 2014, a decree ending direct public financing of political parties entered into effect in Italy. (Decreto Legge 28 dicembre 2013, n. 149, Abolizione del finanziamento pubblico diretto, disposizioni per la trasparenza e la democraticita’ dei partiti e disciplina della contribuzione volontaria e della contribuzione indiretta in loro favore [Elimination of Direct Public Financing, Provisions for the Transparency and Internal Democracy of Parties, and Control of Voluntary and Indirect Contributions in Their Favor] (hereinafter the Decree), GAZETTA UFFICIALE [Official Gazette] No. 47 (Feb. 26, 2014).)

Elimination of Public Funding, Initiation of Direct and Indirect Contributions from Citizens

The Decree eliminates public funding of political elections, as well as financing for political activities. In their place, the Decree establishes a procedure for access by political parties to voluntary tax-exempt contributions and to indirect political contributions made by citizens to political parties that respect the requirements of transparency and internal democracy established in the Decree. (Id. art. 1.) Only legally recognized political parties may avail themselves of the benefits established in the Decree. (Id. art. 3(1) & art. 7.) The parties must previously complete registration with the Commission for the Guarantee of the Bylaws and for the Transparency and Control of Political Parties’ Accounts. (Id . art. 4(1).)

Contributors who donate to registered political parties through non-cash payments equivalent in value to less than €100,000 (about US$137,000) per year, who consent to guarantee the traceability of their operations, and who reveal their true identity are exempt from the requirement that other contributors face to submit a joint declaration with the recipient of the contribution to the President of the Chamber of Deputies. (Id. art. 5(3).)

Effective this year, registered political parties with representation in the Italian or European Parliaments may benefit from cash donations made by individual contributors who comply with the Decree. (Id . arts. 10(1) & 11(1).) The Decree establishes a per-person cap of €100,000 in value per year for cash or other donations in favor of a single political party, whether given directly or indirectly. (Id. art. 10(7).)

2×1000 Contributions

The Decree regulates the Vx1000″ contribution, which allows a taxpayer to earmark two percent per thousand of his or her taxable income as a contribution to only one eligible political party (See previous article on the subject, Dante Figueroa, Italy: Draft Legislation to Eliminate Public Financing for Political Parties, GLOBAL LEGAL MONITOR (June 7, 2013).) A decree of the President of the Council of Ministers, yet to be enacted, will determine the criteria for the distribution of the funds generated under the “2×1000” modality, in order to guarantee the timeliness and efficiency of the funds’ use, as well as the privacy of the choices made by contributors. (Decree, art. 12(3).)

To guarantee the equality of the sexes in their access to elective office, the Decree provides that political parties who propose a number of candidates to the Italian and European parliamentary elections in a ratio lower than 40% for one of the sexes are subject to a proportional reduction from the contributions coming from the fund created under the “2×1000” alternative. (Id. arts. 9(1-2) & 12.)

External Certification of Political Party Accounts

To guarantee the transparency and accuracy of the accounting and financial management of registered political parties, the Decree requires external certification of their accounts. (Id. art. 7(1).) The same obligation applies to the regional branches of registered political parties that have received total contributions in the previous year of at least €150,000. (Id. art. 7(2).)

Rules on Fundraising via Telecommunications

Finally, fundraising campaigns conducted by telephone, SMS, or other related telecommunications methods are regulated by a self-created set of rules approved by telephone operators authorized to provide public electronic communication services, in accordance with the guidelines established by the telecommunications authorities. (Id. art. 13.)