Initiative for changes to the law: Proposals for more transparent financing of political parties presented

Sarajevo, December 13, 2023 – Establishment of clear competences of the Central Election Commission of BiH (CEC BiH) for the supervision of party expenses, the obligation to use unique bank accounts, the prohibition of receiving donations in cash with the obligation to pay donations to the party’s bank account, the expansion of prohibited sources of financing and the increase in sanctions are some of the proposals for increasing the transparency of political financing contained in the initiative to amend the law on political financing in BiH.

Proposals for amendments to the Law on Political Parties Financing were presented at the conference “Integrity of Political Financing in the Region” organized by Transparency International in BiH (TI BiH) in cooperation with the Central Election Commission of BiH in Sarajevo and contain recommendations from relevant international institutions such as GRECO, OSCE/ODIHR and EU as well as international standards for increasing the transparency and integrity of political funding.

The initiative contains proposals made by the Central Election Commission of BiH on the basis of continuous campaign monitoring and analysis of the political parties financing carried out by the TI BiH during several election cycles, indicating a large number of abuses and inadequate control mechanisms, as well as mild sanctions for political entities that violate laws.

TI BiH also highlighted additional changes that must be included, primarily relating to reporting on the financing and costs of independent campaigns of party candidates, financing by “third parties”, i.e. running campaigns through intermediaries and preventing misuse of public resources for the purpose of financing campaigns.

The conference, organized as part of USAID’s support to citizens in the fight against corruption, was opened by the US ambassador to Bosnia and Herzegovina, H.E. Michael Murphy stating that the campaign financing system in Bosnia and Herzegovina is marked by corruption because it was designed by politicians who try to stay in power at all costs.

“Bosnia and Herzegovina’s campaign finance system requires urgent, fundamental reforms as part of a broader effort to restore people’s faith in the country’s democratic institutions, especially as voters prepare to elect their local governments next fall,” Ambassador Murphy said in a message welcoming the recommendations for legislative reforms that TI BiH and CEC presented today.

President of the CEC BiH, Suad Arnautović, particularly emphasized the need for harmonization of regulations in the field of political parties financing and election campaigns, given that existing regulations at all levels of government regulate the distribution of budget funds and campaign financing differently.

Ivana Korajlić from TI BiH emphasized that the parties have a huge space for non-transparent financing and that they receive and spend much more for campaigns than reported, which was shown by TI BiH monitoring, showing a difference of 1.7 million BAM in reported expenses, in relation to what is real, as well as that out of 170 companies that donated funds to political entities in 2022, 70 of them won public procurement contracts in that year.

“We have no insight into the individual expenses of the parties, we don’t know who they pay and how much, which makes it difficult to monitor the actual costs of the campaign. 20 million BAM are allocated annually for financing parties from the budgets of all levels of government, without adequate mechanisms for auditing expenses,” Korajlić said, adding that the issue of political parties financing remained outside of the government’s priorities, and expressing the hope that this issue will come into the focus of decision-makers in order to prevent the misuse of public resources for campaign financing.

Representatives of competent institutions of the countries of the region also participated in the conference, presenting the best practices and procedures for preventing the misuse of public resources during the election process, as well as the supervision of the financing of political campaigns.