The Nationalist Party has pledged to file its annual accounts by not later than April 30 next year in line with a new law but the Labour Party has yet to announce timeframes.

The Times of Malta yesterday contacted the two major political parties on the implications of the Financing of Political Parties Act, which came into force in the beginning of the new year.

The law, aimed to improve transparency in politics, had been in the offing for years but was only enacted in July last year when it was unanimously approved by Parliament.

This important law will be implemented fully and in all its provisions

According to this law, political parties must present audited accounts to the regulator (the Electoral Commission) within four months from the end of their financial year, including any expenses related to election campaigns. The documents will then be uploaded on the commission’s website within a month for public scrutiny.

Parties, however, have been left free to decide the date of the start of their financial year as the law does not lay down any particular dates but speaks of “a period of twelve months with fixed dates for the beginning and their completion”.

Such definition had been criticised for the fact that parties could decide to make the most of the situation by starting their financial year as late as next December. In such case, no annual accounts would be made available before the start of 2018, two years after the law would have come into force.

A PN spokesman said the party’s financial year coincided with the calendar year, spanning between January and December. “Therefore, the first annual accounts prepared in terms of the law will be due to be completed and presented by April 30, 2017,” he said.

On the other hand, a spokesman for the Labour Party said the party would be following all the provisions and timeframes demanded by the law but he stopped short from mentioning any dates.

“It [the PL] has already started preparing to do so at the earliest and within the timeframes set by the law,” the spokesman said.

Asked if the party would be taking additional measures to increase the level of scrutiny over its finances, he pointed out the PL was the only one in Malta that published its accounts.

“We already have a system in place, not only to prepare financial statements but to vet all the relevant information with the help of an independent auditing firm,” he noted.

The spokesman added that party financing legislation had only seen the light of day under the Labour government following various failed attempts by successive Nationalist administrations.

The PL has already started preparing to do so at the earliest and within the timeframes set by the law

“This important law will be implemented fully and in all its provisions in order to have more transparency and to put the people’s mind at rest,” he said.

The PN had already beefed up its financial department in the wake of the meltdown experienced three years ago soon after its general election landslide defeat, when it was on the brink of bankruptcy. Following an aggressive restructuring exercise, which saw the party’s workforce shrink considerably, the PN announced that its situation improved and that its commercial arms were being run on a sustainable model.

“Both in anticipation of the eventual requirements of the law and in line with the general reorganisation of its internal financial and administrative structures embarked upon some time ago, the PN had already set up a team of professional accountants who are responsible to record and monitor both income and expenditure, including all donations received and expenses made,” the spokesman said.

The same group of accountants would ensure the terms set by the financing law are met and would, in turn, be subjected to the scrutiny of external auditors, he added.

The call for greater scrutiny on the financing of political parties came in the wake of concerns that they could fall prey to large organisations pumping huge sums of money, expecting something in return, especially if the party they assisted was elected to government.

The delay in enacting the law had earned Malta harsh criticism by the EU Council watchdog against corruption (Greco), which had repeatedly chided the slow pace of reforms.

Though anonymous donations are still allowed, these have been capped by the new law to €50 and can only be made during party activities such as telethons. While there is now an obligation to record every donation, if these exceed €7,000 they have to be listed in the party’s annual financial statements.

The law caps donations from the same source at €25,000 a year while each election candidate cannot spend more than €20,000 on every district contested. False declarations could even lead to the unseating of an MP.

A proposal by the PN to limit party spending in election campaigns to €2 million was rejected following objections by the party in government which said that parties should not be “penalised” for raising funds beyond a certain level.