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The Electoral Commission has opened an investigation regarding the UK Independence Party (UKIP) to ascertain whether the party accepted impermissible donations from the European political party the Alliance for Direct Democracy in Europe (ADDE) and its affiliated foundation the Initiative for Direct Democracy in Europe (IDDE).

ADDE and its affiliate IDDE, as with other European political parties and foundations, can receive grant funding from the European Union (EU). This funding can cover up to 85% of the parties’ eligible expenditure and be used for a range of activity, from administrative functions through to the campaign costs connected to European elections. It cannot, however, be used for a range of other specified purposes, including for the direct or indirect funding of national parties, election candidates and political foundations at either the national or European level. More information about the EU’s rules can be found here.

On the evening of 21 November, the European Parliament advised the Commission that following its annual audit and inspection of the funding provided to European Parties in 2015, it has formally concluded that ADDE and IDDE used EU grant funding for the benefit of UKIP in breach of its rules and therefore, these expenses were declared as non-eligible for the financing. The Commission has in recent weeks already met with representatives of the European Parliament and inspected material that it gathered as part of its audit.

The Commission has now opened its own investigation into UKIP to look at whether there has been any breach of UK election law. This includes whether any impermissible donations have been accepted by the party.

Donations and loans to political parties are regulated under the Political Parties, Elections and Referendums Act 2000 (PPERA). A donation is money, goods or services given to a political party without charge or on non-commercial terms, with a value of over £500.

Parties must record the donations and loans they receive, check they are from a permissible source, and report certain donations and loans to the Electoral Commission. If donations and loans are not from a permissible source, a party has thirty days to return the donation and must report the impermissible donation to the Commission.

The time taken to complete an investigation varies on a case-by-case basis. Once the investigation is complete, the Commission will decide whether any breaches have occurred and if so what further action may be appropriate.

The Commission will conduct the investigation in line with its Enforcement Policy and will issue a press release at the conclusion of the case setting out what has happened, including whether any offences have been committed.

For further information contact:

Megan Phillips in the Electoral Commission press office on 020 7271 0714 or mphillips@electoralcommission.org.uk Out of office hours 07789 920 414

Notes to editors

1. The Electoral Commission is an independent body set up by the UK Parliament. Our aim is integrity and public confidence in the UK’s democratic process. We regulate party and election finance and set standards for well-run elections and are responsible for the conduct and regulation of referendum held under the Political Parties, Elections and Referendums Act (2000).
2. A permissible donor under PPERA is:
   • An individual registered on a UK electoral register, including overseas electors and those leaving bequests.
   • Most UK-registered companies.
   • A Great Britain registered political party.
   • A UK-registered trade union.
   • A UK-registered building society.
   • A UK-registered limited liability partnership (LLP) that carries on business in the UK.
   • A UK-registered friendly society.
   • A UK-based unincorporated association that carries on business or other activities in the UK.
3. Under section 56(3) of PPERA, the party and the registered treasurer of the party are each guilty of an offence if an impermissible donation is not returned within 30 days of acceptance.
4. Where an offence under section 56(3) of PPERA has been committed, the Commission may apply a civil sanction of up to £20,000 per offence. Where an impermissible donation has been accepted and not returned within 30 days, the Commission may also apply to the courts to order forfeiture of an amount equal to the donations.
5. Political parties must report certain donations and loans to the Electoral Commission.  All parties must report:

• All impermissible donations.
• All permissible donations over £7,500.
• All permissible donations and loans that add up to over £7,500 from the same source in the same calendar year.
• All permissible donations and loans that: are (or add up to) over £1,500; and come from a source that you have already reported to us in the same calendar year.