LAW ON AMENDMENTS TO THE LAW ON FINANCING OF POLITICAL ENTITIES AND ELECTION CAMPAIGNS

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1 D R A F T LAW ON AMENDMENTS TO THE LAW ON FINANCING OF POLITICAL ENTITIES AND ELECTION CAMPAIGNS Article 1 In the Law on Financing of Political Entities and Election Campaigns (Official Gazette of MNE, No 52/14, 76/15 and 83/16) Article 12 paragraph 3 shall be amended to read as follows: A political entity shall submit to the Agency the decision on the amount of membership fees for the current year by the end of January of the current year at the latest, and the Agency shall publish it on its website no later than seven days from the day of receipt. Article 2 In Article 13 paragraph 3, after the words election advertising, the words within ten days from the day of calling of the elections shall be added. After paragraph 3 a new paragraph shall be added, to read as follows: The Agency shall publish on its website the price list referred to in paragraph 3 of this Article within seven days from the day of receipt. The previous paragraph 4 shall become paragraph 5. Article 3 In Article 14 paragraph 4, the word seven shall be replaced by the word ten, and the words: Article 37 of this Law shall be replaced by the words: Article 39 of this Law. Article 4 Article 18 paragraph 1 shall be amended to read as follows: For the purpose of raising funds to finance the election campaign costs, the political entity shall open a separate bank account with an institution authorised for payment operations, on the following day from the day of verification of the electoral list, of which it shall inform the Agency within three days from the day of opening the separate account, and that account shall not be used for any other purpose.. After paragraph 1 a new paragraph shall be added, to read as follows: Notwithstanding paragraph 1 of this Article, in the event that a political entity starts an election campaign before verifying the electoral list, it shall open the account referred to in paragraph 1 of this Article before the beginning of the election campaign..

2 In Article 3, the words: that submitted the joint list shall be deleted. The previous para. 2 through 5 shall become para. 3 through 6. Article 5 In Article 34 paragraph 2 after the words of Article 28 paragraph 3, the words of Article 29 paragraph 2, of Article 30 paragraph 2 shall be added. Article 6 After Article 42, new Article shall be added, to read as follows: Submission of interim report Article 42a A political entity shall submit to the Agency an interim report on the election campaign costs five days prior to the election day. The form and content of the report referred to in paragraph 1 of this Article shall be prescribed by the Agency. The Agency shall publish on its website the report referred to in paragraph 1 of this Article within 24 hours from the moment of receipt.. Article 7 In Article 52 paragraph 1 item 2, the words Article 18 paragraph 4, shall be replaced by the words Article 18 paragraph 5. In item 3, the words: Article 18 paragraph 5 shall be replaced by the words: Article 18 paragraph 6. Article 8 In Article 53 paragraph 1 item 4 shall be amended to read as follows: 4) fails to submit to the Agency the decision on the amount of membership fees for the current year no later than the end of January of the current year (Article 12 paragraph 3);. In item 5 the words: Article 13 paragraph 4 shall be replaced by the words: Article 13 paragraph 5. In item 7 after the words: payment operations the words on the following day from the day of the electoral list verification shall be added. After item 7 a new item shall be added, to read as follows: 7a) fails to notify the Agency within three days from the day of opening a separate bank account (Article 18 paragraph 1);. After item 8 a new item shall be added, to read as follows:

3 8a) launches an election campaign before electoral list verification, and fails to open a separate bank account from Article 18 paragraph 1 of this Law (Article 18 paragraph 2);. In item 9 the words: Article 18 paragraph 2 shall be replaced by the words: Article 18 paragraph 3. After item 26 a new item shall be added, to read as follows: 27) fails to submit to the Agency an interim report on the election campaign costs five days prior to the election day (Article 42a paragraph 1).. Article 9 In Article 54 paragraph 1 After item 1 a new item shall be added, to read as follows: 1a) fails to publish on its website the price list from Article 13 paragraph 3 of this Law, within 7 days from the day of receipt (Article 13 paragraph 4);. After item 6 a new item shall be added, to read as follows: 7) fails to publish on its website the report from Article 42a paragraph 1 of this Article, within 24 hours from the moment of receipt (Article 42a paragraph 3).. Article 10 In Article 55 paragraph 1 in the introductory sentence the words: local selfgovernment body shall be replaced by the words: body of the local self-government unit. In paragraph 1 item 18 shall be amended to read as follows: 18) from the day of calling until the day of holding of the elections, as well as one month following the holding of the elections, fails to publish on its website, on a seven-day basis, the analytical cards from all the accounts in their possession (Article 28 paragraph 3);. After item 18 a new item shall be added, to read as follows: 18a) from the day of calling until the day of holding of the elections, as well as one month following the holding of the elections, fails to submit to the Interim Committee, on a seven-day basis, the analytical cards from all the accounts in their possession (Article 28 paragraph 3);. Article 11 In Article 57 paragraph 1 after the introductory sentence a new item shall be added, to read as follows: 1) on a monthly level pays a membership fee exceeding the amount of 10% of the average monthly net earning in Montenegro for the previous year (Article 6 paragraph 2);. Previous items 1 through 9 shall become items 2 through 10.

4 Article 12 This Law shall enter into force on the eight day of its publishing in the Official Gazette of Montenegro. E X P L A N A T O R Y S T A T E M E N T I. CONSTITUTIONAL BASIS FOR ADOPTING THE LAW The constitutional basis for the adoption of the Law on Amendments to the Law on Financing of Political Entities and Election Campaigns is set out in Article 16, paragraph 1, item 5 of the Constitution of Montenegro, which stipulates that, in accordance with the Constitution, the law shall also regulate other matters of interest for Montenegro. II. REASONS FOR ADOPTION OF THE LAW A Working Group was formed in the Parliament of Montenegro with the task of analysing the implementation of the electoral legislation, and on the basis of the OSCE/ODIHR Election Observation Mission Final Report on the parliamentary elections held on 16 October 2016, considering and proposing the method of implementation of the recommendations from the said Report. At the beginning of their work, members of the Working Group considered all the recommendations set out in the OSCE/ODIHR Election Observation Mission Final Report on the parliamentary elections held on 16 October In that respect, legal regulations that need to be amended have been identified, i.e. the institutions in charge of their implementation, and accordingly, an Action Plan for the implementation of the said recommendations has been adopted. The OSCE/ODIHR Election Observation Mission Final Report on the parliamentary elections held on 16 October 2016 also contains the recommendation that, in order to increase transparency, consideration could be given to requiring election contestants to submit interim reports on campaign expenditures prior to election day. In that respect, members of the Working Group held a consultative meeting with the representatives of the relevant institution, i.e. the Agency for Prevention of Corruption, in order to discuss the said recommendation in a conversation with them and to agree on the manner in which it could be implemented. Furthermore, members of the Working Group also had a conversation with the representatives of the State Audit Institution. Following the discussion with the representatives of these two institutions, the Working

5 Group determined the Draft Law on Amendments to the Law on Financing of Political Entities and Election Campaigns. III. EXPLANATION OF THE PROPOSED SOLUTIONS Article 1 of the Draft Law proposes an amendment of Article 12 paragraph 3 of the Law. The proposed amendment additionally specifies the obligation of a political entity to submit to the Agency the decision on the amount of membership fees for the current year, and the deadline for meeting that obligation. It was proposed that the political entities be obliged to submit that decision by the end of January of the current year at the latest. Article 2 of the Draft Law proposes amendments of Article 13 of the Law. The proposed amendment additionally specifies the deadline for entities offering services of media advertising of the election campaign to submit the price list for the services of media advertising to the Agency. It was proposed that they submit the price list for the services of media advertising to the Agency within ten days from the day of calling of the elections. Furthermore, a new provision was proposed, prescribing that the Agency shall publish on its website the price list for the services of media advertising submitted to it by the entities offering services of media advertising of the election campaign within seven days from the of day receipt. Article 3 of the Draft Law proposes an amendment of Article 14 paragraph 4 of the Law. It was proposed that budget funds for financing of the costs of the election campaign, instead of within seven days, be distributed within ten days from the day when the political entities submit to the Agency the reports on funds raised and expended for the election campaign with the supporting documents. Furthermore, it was specified that the said supporting documents were referred to in Article 39 of the Law. Article 4 of the Draft Law proposes amendments of Article 18 of the Law. Article 18 of the Law on Financing of Political Entities and Election Campaigns regulates the obligation of opening a separate bank account. Paragraph 1 of this Article prescribes that, for the purpose of raising funds to finance the election campaign costs, the political entity shall open a separate bank account with an institution authorised for payment operations. However, no deadline was prescribed for the political entity to open that bank account. The proposed amendments define that deadline, i.e. it was proposed that the political entity shall open a separate bank account on the following day from the day of verification of the electoral list. Furthermore, a deadline was also proposed for the political entity to inform the Agency of the opening of a separate bank account, and that deadline is within three days from the day of opening the separate account. With this Article of the Draft Law, the Working Group proposed that a new provision be prescribed within Article 18 of the Law aimed at regulating certain phenomena identified

6 in the previous election cycles, namely that political entities start the election campaign before verification of the electoral list, failing to meet their legal obligation and open a separate bank account. In the proceedings conducted before the competent courts, with regard to the complaints filed by the Agency against political entities due to their failure to meet their obligation of opening a separate bank account, political entities were exempt from liability because the Law did not prescribe a provision regarding the deadline for opening a separate bank account, and, at the same time, the political entities invoked the provision of the Law on Election of Councillors and MPs regulating the right of representation of the submitters of verified electoral lists. The Working Group proposed an exception to the rule that the political entity shall open a separate bank account on the following day from the day of verification of the electoral list, in the event that a political entity starts an election campaign before the verifying of the electoral list. In that case, the political entity shall open a separate bank account before the beginning of the election campaign. This article of the Draft Law proposed that certain words be deleted from Article 18 paragraph 3 in order for the norm to be precise and be interpreted clearly. Article 5 of the Draft Law proposes amendments of Article 34 paragraph 2 of the Law. Article 34 paragraph 2 of the Law on Financing of Political Entities and Election Campaigns prescribes that if the elections for councillors are held in one or more municipalities where less than 20% of the total number of voters entered into the voting register are entitled to vote, the measures and restrictions referred to in Article 28 paragraph 3, Article 31, Article 32 paragraphs 3 and 4, and Article 33 paragraphs 1, 2, and 3 of this Law shall apply only in the territory of these municipalities. Article 5 of the Draft Law proposes that, in addition to the above, the measures referred to in Article 29 paragraph 2 and Article 30 paragraph 2 of the Law be also applied only in the territory of these municipalities. Article 6 of the Draft Law proposes that a new Article 42a be added after Article 42 of the Law. The new Article, for the first time, regulates the matters relating to the submission of an interim report in the period prior to election day. This is how the Working Group approached the implementation of the recommendation 12 from the OSCE/ODIHR Election Observation Mission Final Report on the parliamentary elections held on 16 October It was proposed that a political entity shall submit to the Agency an interim report on the election campaign costs five days prior to the election day, and that the Agency shall publish this report on its website within 24 hours from the moment of receipt. Articles 7 through 11 of the Draft Law propose amendments in the Chapter of the Law regulating penalty provisions, i.e. in Art. 52, 53, 54, 55, and 57. The proposed amendments are conditioned with the already proposed amendments which have been clarified in the previous Articles. Furthermore, certain provisions have been specified, i.e. new penalty provisions which were missing have been proposed.

7 Article 12 of the Draft Law prescribes the entering into force of the Law, i.e. that this Law shall enter into force on the eight day of its publishing in the Official Gazette of Montenegro. VI. FUNDING No additional funds need to be provided in the Budget of Montenegro for the implementation of this Law.