NGO crackdown bill to be debated as early as Wednesday

April 18, 2017

Hungarian state media reports that a Fidesz-authored bill which would crack down on NGOs operating in the country could be debated in Parliament as early as Wednesday.

Fidesz vice-president Gergely Gulyás, speaking to state news service MTI, said the past two years have shown just how important it is for foreign-funded civil society organizations to operate in a transparent manner. Gulyás claimed that organizations funded by Hungarian-American financier George Soros are waging their strongest attack ever against Hungary in order to destroy the country’s border protection system and pave a way for migrants to enter the country.

But some of the non-governmental organizations targeted by the bill argue it is unlawful, for numerous reasons.

The Hungarian Helsinki Committee and the Hungarian Civil Liberties Union prepared a short analysis of the proposed bill targeting foreign-funded NGOs. (An English-language translation of the bill can be read here.)

Who would the law apply to?

If adopted, the bill would apply to all associations and foundations, with the exception of sports and religious organizations and political parties and their foundations, that receive at least HUF 7.2 million (USD 25,000) annually from “foreign sources.”

What constitutes foreign funding?

Foreign funding will be considered to be all financial or other economic support originating directly or indirectly from abroad, regardless of the legal title of the transfer. This includes donations from private citizens. European Union funding is exempted only if it is awarded through a Hungarian budgetary institution.

You’re a foreign-funded organization, so now what?

Register

Any organization that receives more than the allowed threshold for foreign funding must register with a court as an “organization that receives foreign funding.” The organization shall declare to the registering court within 15 days that it has become an organization receiving foreign funding. The court will then send the names, registered addresses and tax numbers of the associations and foundations to the Minister responsible for the management of the “Civil Information Portal” by the 15th day of each month. The Minister responsible for the management of the Civil Information Portal shall, without delay, publish these data on the electronic platform developed for this purpose, which will be available free of charge.

Report

The organization must also report annually on their foreign funding, including the amount and donor of each foreign transaction (in the case of individual donors, their name, country and city will be reported. In the case of organizations, their name and registered address).

Wear the label

The “organization receiving foreign funding” title must be marked on the organization’s website and be indicated on all of its publications.

Sanctions

Failure to register will ultimately result in the entity’s legal status being revoked through a simplified termination procedure by the court. If the organization fails to register after repeated calls from the public prosecutor, fines can be imposed (between HUF 10,000-900,000) by the court. The public prosecutor would motion for the imposition of a fine with the registration court. If the organization still fails to register as a foreign-funded organization, the public prosecutor would motion a procedure at court for the dissolution of the association or the foundation.

What the NGOs think about the bill

According to the Hungarian Helsinki Committee and the Hungarian Civil Liberties Union, the manner with which the bill was proposed demonstrates the Hungarian government’s willingness to circumvent its obligation to hold a public consultation on the issue. Instead of the government itself proposing the bill, the task to formally submit the bill fell on three Fidesz MPs — Gergely Gúlyas, Lajos Kósa, and Szilárd Németh. According to the NGOs, by circumventing a public consultation on the bill “no public/professional debate could precede the political debate in Parliament.”

If adopted, the bill would violate freedom of expression…

“The law violates the citizens’ and their organizations’ freedom of expression when it obliges NGOs to use negative labels as their self-identification, in order to discredit their opinions in the public discourse….Compelling NGOs to use negative labels on their publications causes their opinions to be handicapped: they will be always coupled with the discrediting message stating that the source of the opinions expressed are serving other interests than those of the Hungarian nation and society,“ the NGOs write.

…and violate the right to privacy and the protection of personal data…

“The bill violates the rights to data protection and privacy when it obliges NGOs to submit the name, country and city of each foreign donor, even if they are private individuals. The list of individuals providing financial support to certain NGOs is a list of identifiable people indicating their affiliation, opinion and belief. There is no proportionate legitimate aim of such an interference with personal privacy, and none of the possible legal grounds specified in the EU GDPR (General Data Protection Regulation) of such a data processing may be applied. There is no justification in a democratic state to make a list of individuals who support certain organizations. Furthermore, the obligation to list private donors is also a violation of their freedom of expression. By supporting a cause, they also express their opinion, and being listed for doing so is a disproportionate restriction on that right by the state,” the NGOs claim.

…and also violate the freedom of association

“The sanctions imposed by the bill (fines between HUF 10,000-900,000 and dissolution of the organization by the court upon a motion by the prosecutor) are extremely harsh and therefore disproportionate, considering the nature and the significance of the obligations specified by the bill. It also has to be noted that according to current law, the legal personality of an association can only be revoked if the court dissolves it for reasons exhaustively prescribed by law (i.e. committing a crime, infringement of others’ rights, unconstitutional activity), or if the court establishes the dissolution of the association without succession (i.e. because it fulfilled its original purpose or the number of its members remains below ten for six consecutive months – therefore it is not an association anymore). The bill would introduce a new ground for dissolution by the court as a sanction for noncompliance with certain administrative obligations. Non-compliance with administrative obligations (e.g. infringement of tax law, or failure of reporting) is not considered as legal grounds for dissolving an association in democratic states, and as such a restriction of the freedom of association would not meet the standards of having a legitimate aim, pressing social need and proportionality,” the NGOs claim.

…and a general prohibition on discrimination in relation to freedom of association

“The bill also violates the general prohibition of discrimination in relation to the freedom of association when it treats NGOs differently on the basis of the sources of funding they receive. The European Court of Human Rights was reluctant to accept the foreign origin of an NGO as a legitimate reason for a differentiated treatment and, according to the Venice Commission, the same reluctance would be a fortiori in place in case of mere foreign funding.

“The bill also violates sectoral equity: it treats NGOs with legal personality differently than other entities without any reasonable justification; therefore it disproportionately targets and burdens NGOs with onerous requirements not applicable to the corporate sector. The bill imposes more burdensome reporting requirements and sanctions on NGOs than on other entities (including other entities that are also involved in policy discourse) without proper justification.

“It is also not justified why the bill applies to this category of NGOs and excludes other organizations, such as sports and religious organizations from the scope of the law, especially in light of the reasons attached to the bill, according to which the main consideration behind the legislation is that NGOs can and do influence public opinion. It is obvious that religious organizations also have this ability – often to a much greater extent than other civil society organizations –, and it is also clear that on the basis of this reasoning, media companies should also fall under the same obligation,” the NGOs conclude.

Where to from here?

Based on the assessment of the Hungarian Helsinki Committee and Hungarian Civil Liberties Union, it is more likely than not that the NGOs are planning to challenge the bill in court (throughout their assessment of the bill, the NGOs make references to various EU and international laws with which the bill clashes).

Hungarian Civil Liberties Union executive director Stefánia Kapronczay and Hungarian Helsinki Committee co-chair Márta Pardavi both told the Beacon that they stand ready for litigation, but both are currently focused on doing everything possible to prevent the bill from being adopted.