Centre required to pay interest on unpaid Pettai donation reimbursement

Centre's party congress in Pärnu in November.
Centre's party congress in Pärnu in November. Source: Ernest Bondarenko/Centre Party

The Centre Party, the majority coalition party whose leader is current prime minister, Jüri Ratas, may well have to pay interest on an outstanding sum owed to the Estonian state in the wake of a decision which deemed money received by the party an illegal donation.

€250,000 was transferred to the party's account from a company owned by one Paavo Pettai, ostensibly for a share in a property purchase in Tartu. However, in July 2018, the Supervisory Committee on Party Financing (ERJK) found that the bulk of the money, €220,000, constituted a donation and ordered Centre to pay the same amount into state coffers. Centre appealed the decision; in December the Supreme Court upheld it, giving the party 30 days to make payment.

On 19 December the ERJK found that no extension would be granted and that the precept would have to be executed by 2 January 2019.

Centre had hoped that the payment could be made in instalments of €12,222 over a period of 18 months, due on 25th of each month, starting in December, claiming that there is no legal requirement for the sum to be returned in one go.

"The 2017 Annual Report confirms that the Centre Party has liabilities that exceed the assets by €239,000,'' Centre wrote to the ERJK, via its lawyer, in December.

''The party has planned, in accordance with its annual report, to make savings in order to restore net assets by year end. A commitment of €220,000 in one payment would thus be impossible, given the party's economic situation,'' the letter continued.

The ERJK does not see it that way, however.

''If Centre fails to comply with the court's decision, it will have to pay default interest,'' vice chair of the ERJK Kaarel Tarand told ERR.

''According to the Political Parties Act, the daily rate is 0.85% of the unpaid amount, or alternatively state support to the party can be reduced,'' Mr Tarand went on, referring to state grants which all of the registered political parties receive.

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Editor: Andrew Whyte

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