§ EAA 2006 Sch. 1 ¶ 99(untitled)

99 After Schedule 7 insert— SCHEDULE 7A Control of loans etc to individuals and members associations Operation and construction of Schedule 1 1 This Schedule has effect for controlling loans and certain other transactions where one of the parties to the transaction is— a a member of a registered party, b a members association, or c the holder of a relevant elective office. 2 The following provisions have effect for the purposes of this Schedule. 3 References to a controlled transaction must be construed in accordance with paragraph 2. 4 A reference to a connected transaction is a reference to a controlled transaction falling within paragraph 2(3)(b). 5 A regulated participant is— a a member of a registered party; b a members association; c the holder of a relevant elective office, whether or not he is a member of a registered party. 6 A credit facility is an agreement whereby a regulated participant is enabled to receive from time to time from another party to the agreement a loan of money not exceeding such amount (taking account of any repayments made by the regulated participant) as is specified in or determined in accordance with the agreement. 7 References to each of the following must be construed in accordance with Schedule 7— a the political activities of a party member or a members association; b members association; c relevant elective office; d the responsible person (in relation to a members association), as if for the reference in paragraph 1(9)(b) of that Schedule to donations there were a reference to receipts from controlled transactions. 8 This Schedule does not have effect in relation to— a a member of the Scottish Parliament, or b a member of a local authority in Scotland, if he is not also a member of a registered party. Controlled transaction 2 1 An agreement between a regulated participant and another person by which the other person makes a loan of money to the regulated participant is a controlled transaction if the use condition is satisfied. 2 An agreement between a regulated participant and another person by which the other person provides a credit facility to the regulated participant is a controlled transaction if the use condition is satisfied. 3 Where— a a regulated participant and another person (A) enter into a controlled transaction of a description mentioned in sub-paragraph (1) or (2) or a transaction under which any property, services or facilities are provided for the use or benefit of the regulated participant (including the services of any person), b A also enters into an arrangement where a third person gives any form of security (whether real or personal) for a sum owed to A by the regulated participant under the transaction mentioned in paragraph (a), and c the use condition is satisfied, the arrangement is a controlled transaction. 4 An agreement or arrangement is not a controlled transaction— a to the extent that in accordance with any enactment a payment made in pursuance of the agreement or arrangement falls to be included in a return as to election expenses in respect of a candidate or candidates at a particular election, or b if its value is not more than £200. 5 Anything given or transferred to an officer, member, trustee or agent of a members association in his capacity as such (and not for his own use or benefit) is to be regarded as given or transferred to the association (and references to money or any other benefit received by a regulated participant accordingly include, in the case of a members association, money or any other benefit so given or transferred). 6 The use condition is that the regulated participant intends at the time he enters into a transaction mentioned in sub-paragraph (1), (2) or (3)(a) to use any money or benefit obtained in consequence of the transaction in connection with relevant political activities. 7 For the purposes of sub-paragraph (6), it is immaterial that only part of the money or benefit is intended to be used in connection with relevant political activities. 8 Relevant political activities are— a if the regulated participant is a member of a registered party, any of his political activities as a member of the party; b if the regulated participant is a members association, any of its political activities; c if the regulated participant is a holder of a relevant elective office, any of his political activities. 9 The Secretary of State may, by order, specify circumstances or any description of circumstances in which an agreement or arrangement falling within any of sub-paragraphs (1) to (3) is not a controlled transaction. Valuation of controlled transactions 3 1 The value of a controlled transaction which is a loan is the value of the total amount to be lent under the loan agreement. 2 The value of a controlled transaction which is a credit facility is the maximum amount which may be borrowed under the agreement for the facility. 3 The value of a controlled transaction which is an arrangement by which any form of security is given is the contingent liability under the security provided. 4 For the purposes of sub-paragraphs (1) and (2), no account is to be taken of the effect of any provision contained in a loan agreement or an agreement for a credit facility at the time it is entered into which enables outstanding interest to be added to any sum for the time being owed in respect of the loan or credit facility, whether or not any such interest has been so added. Authorised participants 4 1 A regulated participant must not— a be a party to a controlled transaction to which any of the other parties is not an authorised participant; b derive a benefit in consequence of a connected transaction if any of the parties to that transaction is not an authorised participant. 2 This paragraph does not apply to a controlled transaction if it was entered into before the commencement of section 61 of the Electoral Administration Act 2006. 3 In this Schedule, an authorised participant is a person who is a permissible donor within the meaning of section 54(2). 4 The Secretary of State may, by order, specify circumstances or any description of circumstances in which a person who is not a permissible donor is to be treated as an authorised participant. Controlled transaction involving unauthorised participant 5 1 This paragraph applies if a regulated participant is a party to a controlled transaction in which another participant is not an authorised participant. 2 The transaction is void. 3 Despite sub-paragraph (2)— a any money received by the regulated participant by virtue of the transaction must be repaid by the regulated participant to the person from whom it was received, along with interest at such rate as is determined in accordance with an order made by the Secretary of State; b that person is entitled to recover the money, along with such interest. 4 If— a the money is not (for whatever reason) repaid as mentioned in sub-paragraph (3)(a), or b the person entitled to recover the money refuses or fails to do so, the Commission may apply to the court to make such order as it thinks fit to restore (so far as is possible) the parties to the transaction to the position they would have been in if the transaction had not been entered into. 5 In the case of a controlled transaction where a party other than a regulated participant— a at the time the regulated participant enters into the transaction, is an authorised participant, but b subsequently, for whatever reason, ceases to be an authorised participant, the transaction is void and sub-paragraphs (3) and (4) apply with effect from the time when the other party ceased to be an authorised participant. 6 This paragraph does not apply to a controlled transaction if it was entered into before the commencement of section 61 of the Electoral Administration Act 2006. Guarantees and securities: unauthorised participants 6 1 This paragraph applies if— a a regulated participant and another person (A) enter into a transaction of a description mentioned in paragraph 2(3)(a), b A is party to a controlled transaction of a description mentioned in paragraph 2(3)(b) (“ the connected transaction ”) with another person (B), and c B is not an authorised participant. 2 Paragraph 5(2) to (4) applies to the transaction mentioned in sub-paragraph (1)(a). 3 The connected transaction is void. 4 Sub-paragraph (5) applies if (but only if) A is unable to recover from the regulated participant the whole of the money mentioned in paragraph 5(3)(a) (as applied by sub-paragraph (2) above), along with such interest as is there mentioned. 5 Despite sub-paragraph (3), A is entitled to recover from B any part of that money (and such interest) that is not recovered from the regulated participant. 6 Sub-paragraph (5) does not entitle A to recover more than the contingent liability under the security provided by virtue of the connected transaction. 7 In the case of a connected transaction where B— a at the time A enters into the transaction, is an authorised participant, but b subsequently, for whatever reason, ceases to be an authorised participant, sub-paragraphs (2) to (6) apply with effect from the time when B ceased to be an authorised participant. 8 This paragraph does not apply to a regulated transaction if it was entered into before the commencement of section 61 of the Electoral Administration Act 2006. 9 If the transaction mentioned in paragraph 2(3)(a) is not a controlled transaction of a description mentioned in paragraph 2(1) or (2), references in this paragraph and paragraph 5(2) to (4) (as applied by sub-paragraph (2) above) to the repayment or recovery of money must be construed as references to (as the case may be)— a the return or recovery of any property provided under the transaction, b to the extent that such is incapable of being returned or recovered or its market value has diminished since the time the transaction was entered into, the repayment or recovery of the market value at that time, or c the market value (at that time) of any facilities or services provided under the transaction. Transfer to unauthorised participant invalid 7 If an authorised participant purports to transfer his interest in a controlled transaction to a person who is not an authorised participant the purported transfer is of no effect. Offences 8 1 An individual who is a regulated participant commits an offence if— a he enters into a controlled transaction of a description mentioned in paragraph 2(1) or (2) in which another participant is not an authorised participant, and b he knew or ought reasonably to have known that the other participant was not an authorised participant. 2 A responsible person of a members association commits an offence if— a the association enters into a controlled transaction of a description mentioned in paragraph 2(1) or (2) in which another participant is not an authorised participant, and b he knew or ought reasonably to have known of the matters mentioned in paragraph (a). 3 An individual who is a regulated participant commits an offence if— a he enters into a controlled transaction of a description mentioned in paragraph 2(1) or (2) in which another participant is not an authorised participant, b sub-paragraph (1)(b) does not apply to him, and c as soon as practicable after knowledge that the other participant is not an authorised participant comes to him he fails to take all reasonable steps to repay any money which he has received by virtue of the transaction. 4 A responsible person of a members association commits an offence if— a the association enters into a controlled transaction of a description mentioned in paragraph 2(1) or (2) in which another participant is not an authorised participant, b sub-paragraph (2)(b) does not apply to him, and c as soon as practicable after knowledge of the matters mentioned in paragraph (a) comes to him he fails to take all reasonable steps to repay any money which the association has received by virtue of the transaction. 5 An individual who is a regulated participant commits an offence if— a he benefits from or falls to benefit in consequence of a connected transaction to which any of the parties is not an authorised participant, and b he knew or ought reasonably to have known that one of the other parties was not an authorised participant. 6 A responsible person of a members association commits an offence if— a the association benefits from or falls to benefit in consequence of a connected transaction to which any of the parties is not an authorised participant, and b he knew or ought reasonably to have known of the matters mentioned in paragraph (a). 7 An individual who is a regulated participant commits an offence if— a he is a party to a transaction of a description mentioned in paragraph 2(3)(a), b he benefits from or falls to benefit in consequence of a connected transaction to which any of the parties is not an authorised participant, c sub-paragraph (5)(b) does not apply to him, and d as soon as practicable after knowledge comes to him that one of the parties to the connected transaction is not an authorised participant he fails to take all reasonable steps to repay to any person who has provided him with any benefit in consequence of the connected transaction the value of the benefit. 8 A responsible person of a members association commits an offence if— a the association is a party to a transaction of a description mentioned in paragraph 2(3)(a), b the association benefits from or falls to benefit in consequence of a connected transaction to which any of the parties is not an authorised participant, c sub-paragraph (6)(b) does not apply to him, and d as soon as practicable after knowledge comes to him that one of the parties to the connected transaction is not an authorised participant he fails to take all reasonable steps to repay to any person who has provided the association with any benefit in consequence of the connected transaction the value of the benefit. 9 A pe