EU High Court Strikes Down Hungary Law Targeting Nonprofits

Budapest, Hungary. (Photo via David Mark/Pixabay)

LUXEMBOURG (CN) — A Hungarian law requiring nongovernmental organizations to register with the government if they receive foreign donations was declared illegal by the European Union’s highest court on Thursday. 

In the latest clash between the EU and Hungary, the Luxembourg-based European Court of Justice found that the legislation, known as the transparency law, placed “discriminatory and unjustified restrictions” on civil society groups in the central European country. 

Believed to be targeted at the philanthropic work of Hungarian-American billionaire George Soros, the law requires all Hungarian associations and foundations that receive funding from abroad to notify the Hungarian government and include an indication on their website and marketing materials.

“By stigmatizing these associations and foundations in this way, the law is likely to create a climate of mistrust towards them,” the court held. 

The law applied to all forms of financing — from EU subsidies to individual donations — of more than 7.2 million Hungarian forints ($23,000) per year. Groups who fail to do so could be fined or shut down. 

The European Commission, the EU’s executive branch, informed Hungary that the law was out of step with the EU charter in a 2017 letter. Then-Vice President Frans Timmermans said at the time: “Civil society is the very fabric of our democratic societies and therefore should not be unduly restricted in its work.”

In response, Hungarian officials accused the EU of being in bed with Soros and anarchists. 

“The law is a blatant attempt to muzzle critical voices and chip away at public support for organizations fighting for human rights, justice and equality,” David Vig, of human rights organization Amnesty International, said in a statement. Amnesty’s operations in Hungary were directly impacted by the law. 

On Thursday, the 13-judge panel of the Court of Justice sided with the EU, finding that the law restricted the free movement of capital through the 27-member political and economic union as well as the right to private and family life and freedom of association. 

Reflecting the opinion from a magistrate earlier this year, the court also dismissed Hungary’s argument that the country was merely interested in increasing transparency.

“Hungary does not demonstrate, in the present case, that those objectives justify limiting the right to freedom of association, the right to respect for private and family life and the right to protection of personal data as the transparency law does,” the court wrote. 

The ruling comes a day after Hungarian Prime Minister Viktor Orban announced that the country would end the state of emergency that granted him nearly unlimited powers during the Covid-19 outbreak. 

Critics of the government say the move is irrelevant since Orban has nearly unlimited power even without the law.

“The government does not want to restore the normal functioning of the rule of law, but seeks to create a new legal basis for extraordinary and unlimited governmental power,” said the Karoly Eotvos Institute, a pro-democracy organization based in Budapest. 

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