Hungary’s justification of NGO law is false

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Protestors march during a protest entitled 'We belong to Europe' organized by the civic Momentum Movement in downtown Budapest, Hungary, 1 May 2017. [Zoltan Balogh/ EPA]

In his response to a EURACTIV interview about Hungary’s NGO law, Hungarian government spokesman Zoltán Kovács suggested that the Venice Commission approves of Hungary’s new NGO law. This is not the case, writes Heather Grabbe.

Heather Grabbe is the director of the Open Society’s European Policy Institute. From 2004 to 2009, she was a senior adviser to the then-EU Commissioner for Enlargement Olli Rehn and was responsible for the Balkans and Turkey.

Far from approving the law, the Venice Commission’s opinion expresses serious concerns and made strong recommendations for amending it.

The Venice Commission concluded that “While on paper certain provisions requiring transparency of foreign funding may appear to be in line with the standards, the context surrounding the adoption of the relevant law and specifically a virulent campaign by some state authorities against civil society organisations receiving foreign funding, portraying them as acting against the interests of society, may render such provisions problematic, raising a concern as to whether they breach the prohibition of discrimination, contrary to Article 14 ECHR.

“Although the label ‘organisation receiving support from abroad’ objectively appears to be more neutral and descriptive compared, in particular, to the label of ‘foreign agent’, it should be emphasised that placed in the context prevailing in Hungary, marked by strong political statements against associations receiving support from abroad, this label risks stigmatising such organisations, adversely affecting their legitimate activities and having a chilling effect on freedom of expression and association.”

Mr Kovács states that Hungary’s new NGO legislation simply requires civic groups that receive funding from abroad to make that fact completely transparent to the public.

In fact, civic groups already comply with robust transparency measures, including statutory requirements to publish all funding. The law is discriminatory since it exempts religious, sports and ethnic organisations from the proposed new reporting requirements, as well as political parties, their foundations and trade unions.

That means the Hungarian Football Association does not have a “foreign funded” label, but a local NGO that campaigns for better bus services does. The law also exempts EU money disbursed by the government from the “foreign funds” category, but not EU funding that goes directly to non-state actors. As a result, the government can use EU money to build motorways without a label, but scientists whose research projects are funded from Brussels must use the label.

Mr Kovács suggests that Hungary’s NGO law is mild in comparison to similar legislation in the United States.

In fact, the US law does not penalise NGOs in the manner that the Hungarian law does. Under the US “Foreign Agents Registration Act”, persons or organisations are required to register only if they are under the direct control of a foreign entity.

The foreign entity must have “a right of control, not simply an ability to bring influence to bear”. NGOs, including those that engage in “political activities” are not affected. The vast majority of those registered under FARA are law firms, lobbying firms, public relations firms and tourism agencies; FARA is almost never applied to civil society associations.  In contrast, Hungary’s law expressly targets civil society organisations.

Mr Kovács compares Hungary’s NGO law to a debate in Canada about the influence of third parties on the country’s election.

The comparison is false and does not hold up to scrutiny. There are strong reasons for states, as Canada is debating, to monitor and restrict the use of foreign funding to influence the election of political candidates or parties, which are competing for public office and state power.

But the Hungarian law exempts political parties and their foundations.  Non-governmental organisations are non-partisan and do not engage in this type of activity.

Mr Kovács dismisses as “ridiculous” the suggestion that the NGO law restricts the free movement of capital in the common European market.

There is substantial evidence that the law does exactly that. Under EU law, there is no such thing as “foreign” money when it is being transferred between member states. Hungary’s NGO law means funds from other EU members will come under scrutiny from the government in ways that domestic funds do not. Under a free market, that is unacceptable.

Civil society organisations are also economic actors that provide services across borders. The free market should apply to them too. Moreover, the law violates other basic EU freedoms such as data privacy and equal treatment. For example, a Dutch person who wants to give money to charity in Hungary will find her personal details published on a government website, which contravenes EU date privacy regulations and the right of free speech.

Finally, Mr Kovács suggests that, contrary to claims that the NGO law seeks to mute criticism of the government, anyone genuinely plugged into the daily discourse of Hungary’s public life knows about the lively debate in the press and on the public square.

Unfortunately the debate in Hungary’s media is greatly diminished since the country’s largest opposition newspaper was shut down last year. But it’s true that the public square remains an important indicator of public opinion: tens of thousands of Hungarians have protested against the NGO law and other restrictive measures in the past months.