The government is planning on closing loopholes that could allow foreign donors to influence UK elections with illegitimate donations.
In a series of measures announced on Thursday, the government said it would crackdown on illegitimate funding via shell firms and subject donors to enhanced tests.
This will ensure donations will only come from allowable UK sources, the Guardian reports.
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One of the main measures will to make sure foreign sources of money cannot be transferred into shell companies based in the UK that carry out no business in the UK.
Parties will also be asked to do enhanced checks on donors and will require donor organisations known as “unincorporated associations” to make sure all contributions over £500 come from legitimate UK sources.
The new measures will be backed up by stronger fines for those who break the rules, such as fines of up to £500,000 and criminal charges for any false or misleading declarations.
Rushanara Ali, the minister for democracy, said: “The world is changing and the threats that risk undermining our democracy are evolving too.
“We must strengthen the protections to help reduce those risks. That’s why we are taking action to close loopholes and strengthen donation rules, so the public can have confidence in the electoral process.”
There have been calls for stronger regulations around political donations ever since Elon Musk suggested he could make a $100m donation to Reform UK.
The new rules mean the Tesla CEO would have to prove any donation through a UK-based company had generated revenue in the UK – although recent differences with Nigel Farage mean a donation looks highly unlikely anyway.