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Paraguay: Campaign Financing Law Amended

(May 7, 2020) On February 18, 2020, Paraguayan President Mario Abdo Benítez signed Law No. 6501/2020, amending Law No. 4743/2012 Regulating Political Financing.

Law No. 6501 creates a unit within the Superior Court of Electoral Justice (Tribunal Superior de Justicia Electoral, TSJE) to be in charge of arranging, coordinating, and supervising policies and procedures to prevent money laundering and terrorist financing within the context of electoral campaigns. (Art. 1, para. 2.) Likewise, political associations are required to set up control and registration mechanisms for financial transactions related to their political activities. (Art. 1, para. 3.)

At the same time, political candidates are required to keep a record of the income they receive and the expenses incurred during all electoral campaigns, including the party’s internal elections. (Art. 2(a).) Candidates must report the information to the Undersecretariat of State for Taxation and to the TSJE. (Art. 2(c).) Candidates and their spouses are also required to file a declaration within their own party reporting the companies in which they have a stake or investments, which will then be reported to the TSJE. (Art. 2(a), para. 3.) Those who do not comply with the required reporting are subject to a fine. (Art. 2(a), para. 6.) The declarations of income and expenses of the candidates must be published on the TSJE web portal. (Art. 2(a), para. 4.)

Political parties must keep vouchers and all supporting accounting records for five years. (Art. 2(b), last para.) Parties, political movements, or alliances must submit to the TSJE their accounting records, providing detailed information on income and expenses, contributions made and to whom, and donations received and from whom. This information must also be published on the TSJE web portal. (Art. 2(c), amending art. 66 of Law No. 834/1996 Establishing the Paraguayan Electoral Code.)

Political parties, movements, and alliances and electoral coalitions may not accept or receive directly or indirectly, in any form, any of the following:

  • Contributions or donations from foreign entities, such as governments, foundations, political parties or movements, institutions, individuals, or companies, unless they are domiciled in Paraguay and the contribution or donation is for covering the costs of the political party or movement’s training and research activities
  • Contributions or donations from public entities or companies, companies operating under a public concession contract, or those who operate gambling businesses
  • Contributions or donations from individuals under administrative subordination or in an employment relationship when made through official organizations or by salary deductions
  • Contributions or donations from associations or unions
  • Anonymous contributions or donations
  • Individual contributions or donations higher than approximately US$130,000 for each financial year, either from individuals or legal entities
  • Contributions or donations from individuals convicted of the commission of punishable acts classified as crimes, especially those related to illegal drug trafficking, human trafficking, arms trafficking, and smuggling. (Art. 2(c), amending art. 68 of Law No. 834/1996.)

Cash contributions in excess of approximately US$3,400 must be made exclusively with nominal checks or formal transfers. (Art. 2(c), amending art. 68 of Law No. 834/1996.)

Political parties are required to designate a campaign administrator and open a bank account for the deposit of all campaign funds raised, whose origin must be specified. (Art. 2(c), amending art. 278(a)(c) of Law No. 834/1996.)