Hungary faces large EU fine over NGO ‘Stop-Soros’ funding law

Hungary faces a large fine unless it complies with a ruling from the European Court of Justice over the funding of NGOs.

The European Union has taken an key step towards fining Hungary for refusing to lift restrictions on the foreign financing of non-governmental organisations (NGOs) operating in the country.

Last year, the European Court of Justice (ECJ) ruled that the restrictions, which require foreign-funded NGOs to disclose their donors to the Hungarian authorities or face fines, was incompatible with EU law.

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The Commission has now sent a formal letter of notice to the government of Prime Minister Viktor Orbán as part of the EU’s infringement procedure used when member states are accused of violating EU regulations. Mr Orbán’s government now has two months to explain why it is not complying with the ECJ’s ruling.

If Budapest does not react within the required time frame, the Commission could ask the ECJ to impose substantial fines.

‘NGOs are indispensable’

“Civil society organisations are an indispensable part of our democracies. We must support them, not fight them,” said Vera Jourova, vice-president of the European Commission.

The law, passed by Hungary’s parliament in 2017 requires NGOs which receive more than 7.2 million forints (around 21,000 euros) annually from foreign sources to register as organisations “receiving support from abroad”.

The law also requires affected NGOs to indicate this label in all their publications and on their websites, and to declare the names of donors giving more than around 1,500 euros.

In its ruling last year, the ECJ said the restrictions were discriminatory against NGOs and donors, and restricts the free movement of capital – one of the four founding principles of the European Union – because it “establishes a difference in treatment between national and cross-border movements”.

‘Stop-Soros’

Hungary claims that it introduced the law to counter money-laundering and boost transparency, but it has long been perceived as forming part of a feud with the Hungarian-born billionaire and philanthropist George Soros.

Mr Orbán has accused NGOs funded by Mr Soros of interfering in domestic politics. The law was even unofficially dubbed “the Stop-Soros law”.

Two further laws were passed the following year, one of them criminalising individuals and human rights organisations providing legal assistance to migrants, and the other imposing a special tax on related funding. The European Commission has also challenged these laws at the ECJ.

The case is pending.

Photo: Viktor Orbán official Facebook page.

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