Bulgaria Constitutional Court strikes down rules on party financing

Bulgaria’s Constitutional Court said on April 27 that it ruled several provisions in the Political Parties Act and the Electoral Code, concerning private financing of political parties, to be unconstitutional.

The provisions in question were included as a rider on the Budget Act revision passed by the previous National Assembly in July 2019, which also reduced the state subsidy for political parties. At the time, President Roumen Radev vetoed the bill and, after MPs overturned his veto, filed a formal complaint with the Constitutional Court.

The amendments allowed “legal entities and sole proprietors” to make donations to political parties, but parties were not allowed to accept donations from such entities that had overdue tax arrears or were registered in “jurisdictions with a preferential tax regime.”

This added a new source of revenue for political parties, in addition to others allowed under the law, namely membership fees, donations and inheritance of individuals, as well as interest earned on bank loans.

Political parties that receive more than one per cent at parliamentary elections also receive a state subsidy. Parties are banned from any commercial activities, the only exception being intellectual property and publishing activities, which is limited by law to “disseminating party propaganda content.”

In its ruling, passed without any dissenting opinions, the court said that the constitution did not preclude political parties from receiving donations made by legal entities or sole proprietors, but did require that such funding had “equally clear rules as those on public financing.”

The financing rules outlined in the amendments passed in 2019 did not meet certain restrictions set out in the constitution, the court said, because they did not preclude state financing of political parties by means other than the direct public subsidy.

As formulated, the law would allow donations from the state, state institutions that are legal entities, municipalities, state- or municipality-owned enterprises, as well as companies in which the state or municipalities held a stake.

“The possibility of direct or indirect financing of political parties by the state and municipalities outside the funding stipulated in the state budget is constitutionally inadmissible,” the court said.

Additionally, the court said that “the addition of private financing, which is voluntary and without limits on size, endangers political pluralism.”

Only a system that limited an individual donor’s contribution would guarantee political pluralism and the restrictions imposed by the current law did not achieve that goal, the court said.

The court also ruled that a change in language, to stipulate that the activity of political parties “may be financed” by its own revenues and the state subsidies – as opposed to the previous formulation of “is financed” – was unconstitutional.

The change made it a legal possibility for the state to finance political parties, rather than a legal imperative, according to the ruling. The constitution does not allow Parliament to decide whether to provide public funding for political parties that meet the criteria set out by law, it can only set the size of such financing, the court said.

(Photo: Clive Leviev-Sawyer)

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