Top EU court strikes down Hungary’s NGO financing law

The European Court of Justice (ECJ) said on Thursday (18 June) that the restrictions imposed on the financing of civil organisations by foreigners in Hungary were “discriminatory and unjustified” and went against EU law.

The case came to the EU’s top court after the European Commission initiated infringement proceedings against Hungary in 2017 for what it said were “discriminatory, unjustified and unnecessary restrictions on foreign donations.”

The Hungarian law requires all civil society actors to register as ‘organisations in receipt of support from abroad’ if the amount of donations coming from outside the country reaches the threshold of about €22,000.

If the donation exceeds €1,400, the donor’s name and size of the donation are published on a publicly accessible online platform.

Hungary justified the law by arguing that it increases transparency and contributes to the fight against money laundering and terrorist financing, an argument the Court rejected on the grounds that the measures applied indiscriminately to all organisations falling within the scope of the law.

The ECJ said the restrictions breached free movement of capital and failed to protect the right to private and family life, did not uphold the protection of personal data, and unjustly limited the right to freedom of association.

It added that the measures also created “a climate of distrust” towards the civil society and foundations.

The ruling comes less than a month after Hungary said it would close “transit zones” where hundreds of asylum seekers and migrants were held, following an ECJ ruling that said the camps effectively amounted to detention.

Hungary closes asylum-seeker camps after EU court ruling

Hungary said Thursday (21 May) it would close “transit zone” camps where hundreds of asylum seekers and migrants were held, following a ruling by EU’s top court against their detention.

“The ruling is good news for Europeans and shows that legal action achieves results,”  Linda Ravo from the Civil Liberties Union for Europe told EURACTIV in emailed comments.

“Proceedings which protect European values and human rights should be speeded up and systematically prioritised.”

Stefania Kapronczay, executive of director of the prominent civil rights watchdog Hungarian Civil Liberties Union (HCLU) said it was now the Hungarian government’s turn to implement the ruling.

“At the European level, it’s a very important outcome that the Court found that such a law that is harmful to civil organisations, harmful to the freedom of thought, goes against the European Union law,” she told this website.

However, “the law is only one part of the actions against Hungarian civil society organisations,” Kapronczay said.

“Defamatory campaigns, the complete cessation of cooperation between the state institutions and the civil sphere contribute to the creation of a hostile environment and made the operation of civil society organisations more difficult.”

The human rights defender also pointed out that it is important that EU funding available for organisations standing up for rule of law is not decreased in the bloc’s next seven-year budget compared to the initial proposal. EU leaders will debate the budget and a new €750 billion EU recovery fund on Friday.

The NGO funding law was part of a wider campaign directed against liberal US billionaire George Soros, who has been accused by Viktor Orbán’s government of orchestrating migration to Europe.

The billionaire’s grantmaking network Open Society Foundations (OSF), which moved its Budapest staff to Berlin in 2018 because of the “increasingly repressive political and legal environment in Hungary”, has welcomed the judgement.

“This ruling will resonate throughout the European Union as an affirmation that civic engagement is a vital pillar of its democratic values,” Patrick Gaspard, the president of OSF, said in a statement.

[Edited by Zoran Radosavljevic]

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