24. Is there a ban on political parties taking loans in relation to election campaigns?

Loans

49. The legislation does not make specific provision in relation to loans. It does indicate, however, that goods, property or services provided free or at below market cost may be regarded as donations. The Standards Commission has issued legally binding guidelines which state that where a loan is provided to a political party/candidate/third party by a financial institution and the normal rules attaching to such loans apply, the loan is not regarded as a donation. However,
where a loan is provided by a financial institution in circumstances where either the interest charged is less than the lowest rate available from the financial institution or the loan is not repaid in accordance with the terms and conditions under which the loan was issued or is only partially repaid, the benefit to the candidate may be regarded as a donation and may, therefore, be subject to the disclosure and maximum limits applying to the acceptance of donations.

50. Where an individual or body, who or which is not a financial institution, gives a loan to a political party/candidate/third party, it must be evident that the loan offered is a bona fide loan. In that regard, the following would apply: - as with a loan from a financial institution, the terms and conditions applying to the loan and its repayment must be stated clearly in writing; - interest is chargeable on the loan at a rate (whether fixed or variable) which reflects the interest charged by financial institutions on loans of a similar amount and duration. Where the interest charged is less than the lowest rate available from a financial institution, the benefit accruing from the difference in rates is regarded as a donation; the Standards Commission may require sight of the terms and conditions, including the interest charge, applying to the loan and may require confirmation that the loan has been repaid in accordance with the terms and conditions, or if it is only partly repaid, the benefit of such non-repayment may be regarded as a donation.

Source: GRECO (2009) Evaluation Report on Ireland, Transparency of Party Funding (Theme II), p. 11-12.