Political Financing Bill may bar foreign funds, third-party contributions

KUALA LUMPUR: The proposed Political Financing Bill may bar political parties from receiving foreign contributions, including funds channelled or managed through third parties, with the same regulatory controls applied to such funding.

Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the proposed scope would apply at both federal and state levels and throughout the political cycle, before, during and after elections.

"This scope is proposed to apply at the federal and State levels and throughout the entire political cycle, before, during and after elections.

"(It is) to ensure that the sources and use of political funds can be effectively monitored," she said in a parliamentary reply.

She said the Bill was also proposed to require political funds to be received and used through official channels that could be recorded, traced and audited.

This includes periodic reporting, the annual submission of audited financial reports, and the disclosure of political funding information to the public, subject to details and parameters to be finalised during the drafting of the Bill.

Azalina said the Legal Affairs Division (BHEUU) of the Prime Minister's Department organised the 2026 Political Financing Convention on Sept 8 in collaboration with the International Islamic University Malaysia and the Institute for Democracy and Economic Affairs (Ideas).

The convention presented findings from a study and gathered further views from stakeholders.

She said several policy recommendations had been prepared based on the study findings, engagement sessions and the triangulation process for consideration in drafting the Bill.

These included the scope of application, sources and limits of contributions, mechanisms for receiving funds, as well as reporting, auditing, transparency, offences and penalties.

Azalina said the recommendations would be presented to the Parliamentary Special Select Committee in the near future for review and further feedback before being finalised for consideration by the cabinet.

She was responding to Datuk Idris Ahmad (PN-Bagan Serai), who asked about mechanisms to prevent foreign funds from being channelled through non-governmental organisations (NGOs) or third parties to finance campaigns or political activities benefiting certain parties or candidates.

He also asked whether the Bill would require disclosure of funding sources and expenditure.