European Commission launches infringement procedure against Hungary over NGO transparency law

The European Commission has launched an infringement procedure against Hungary over the law on the transparency of foreign-funded NGOs.

The EC said it has sent Hungary a letter of formal notice on the matter, which officially launches the procedure.

Hungary now has one month to respond to the commission’s concerns.

The law requiring civil groups to register with a court as foreign-backed groups once their foreign donations reach 7.2 million forints (EUR 23,400) was passed by parliament last month. European Union funds do not count towards the threshold.

The EC said in a statement that the law “interferes unduly” with rights enshrined in the EU’s Charter of Fundamental Rights, particularly the freedom of association. It also raises concerns regarding the protection of personal data, the EC said.

Further, the law applies “unjustified and disproportionate” restrictions to the free movement of capital through its requirements for NGOs to register and declare their registration as foreign-backed groups, the EC said. The body said these rules were discriminatory and “create an administrative and reputational burden” for civil groups.

The EC said the law could also prevent NGOs from being able to raise funds, thereby restricting their ability to carry out their work. The measures have a dissuasive effect on funding NGOs, the commission added.