Democracy & Justice

Hungary: Foreign Funding Law Violates EU Law

The government claimed that the law was needed to counter money-laundering and boost transparency. However, the law has long been perceived as part of Hungary’s right-wing government’s hatemongering against philanthropist George Soros.

by Orsolya Reich


On 16th June 2020 Hungary’s parliament asked for an end to the “state of danger”. As reported previously on the Monitor, the so-called Authorisation Act adopted on 30th March 2020 granted excessively wide powers to the government to rule by decree. This move invoked criticism from national and international rights groups. They feared that by using its new powers the government would further erode the state of democracy in Hungary.

On 17th June 2020 the government announced an end to the “state of danger”, but immediately declared a “state of medical crisis”. This newly established legal situation still allows the government to issue a wide range of decrees and restrict certain rights. The state of medical crisis cannot be lifted by parliament. Human rights organisations are concerned that the new legal state is just a smokescreen for maintaining unchecked and excessive government powers.


On 18th June 2020, the Court of Justice of the European Union ruled that a Hungarian law concerning foreign funding of non-governmental organisations “does not comply with the Union law”.

The law in question (reported on by the Monitor here, and here) was passed in 2017. According to the law, any organisation receiving more than €24,000 from abroad is to register as "foreign supported". Under the law, NGOs also had to list any foreign sponsors granting them more than €1,600 a year. The law requires qualifying organisations to label all communications materials accordingly and comply with additional administrative requirements. Failure to comply with the law can lead to the freezing of assets or even termination of organisations' activities.

The government claimed that the law was needed to counter money-laundering and boost transparency. However, the law has long been perceived as part of Hungary’s right-wing government’s hatemongering against philanthropist George Soros. The law has been widely known as one of the “Stop-Soros” laws.

Following the adoption of the law, the European Commission called on the government to repeal it. The government failed to comply with this request and after unsuccessful consultations the European Commission took the matter to the Court of Justice of the European Union.

The court found that the law introduced "discriminatory and unjustified restrictions" on those organisations affected. It adds that the measures which it lays down for those associations and foundations creates a “climate of distrust”. According to Stefánia Kapronczay, managing director of the Hungarian Civil Liberties Union:

The NGO law is not about the NGOs themselves, but about the thousands of citizens we represent and whose voices can only be heard through us. It is about the citizens that criticise those exercising power, which explains why those in power have recently been replying with personal attacks instead of substantial answers.”

Márta Pardavi, co-chair of the Hungarian Helsinki Committee welcomed the judgment:

“The court's decision strongly asserts that marginalising and intimidating NGOs that receive funding from abroad and obstructing their work is not accepted and is not lawful in the European Union. This ruling is (...) a clear reaffirmation of the fundamental role played by civil society in a democracy, and curbing that with Russian-style laws is unlawful in the EU.”

To comply with the decision, Hungary would have to repeal the law. If it does not do so, it could face sanctions.

Commenting on the ruling, Gergely Gulyás, the head of the Prime Minister’s Office, said that Hungary has always respected the decisions of the CJEU in the past and will continue to do so in the future. He said that the court agreed with the government’s goals, so only the tools with which to achieve its ends need to be changed.

Prime Minister Viktor Orbán said that a network of liberal imperialists is trying to “force their worldview onto countries that think differently”. In his view, international courts were “often also involved in this network”.


On 29th May 2020 the far-right Mi Hazánk (Our Homeland) party held an unauthorised demonstration in front of the National Roma Self-Government in Hungary’s capital, Budapest, to protest “gypsy crime” after two young football fans were stabbed to death by another fan. Media reports suggested that the attacker was allegedly a Roma teenager, however this was not confirmed by officials. The protesters later joined a “memorial” attended by hundreds of hardcore football fans near the crime scene.

While the police detained six protesters for possessing objects dangerous to public safety (as they carried gas sprays, knives or stones with them), many were shocked at the difference in the police’s attitude toward the anti-Roma protesters versus the anti-government protesters from a few weeks before.

As reported earlier by the Monitor, in May 2020 the police handed out unusually high fines to the participants in what is regarded as much more responsible car-honking demonstrations organised by independent MPs against a government order.

Fines in such large sums were not handed out to the protesters chanting racist slogans on the streets and not adhering to social distancing.

The Roma minority are routinely mistreated and discriminated against in Hungary. Just before the coronavirus hit, it was feared that the Roma would become the next target of the series of government hate campaigns.


As reported earlier, the Authorisation Act expanded a section of Hungary’s Criminal Code on ‘scaremongering’ during a special legal order.

On 17th June 2020, Hungary’s Constitutional Court ruled that the new amendment is not unconstitutional. On a positive note, it also states that the law only applies to those who knowingly spread false information, and only if the authorities are thereby hindered in their ability to implement protective measures during an emergency - thus decreasing the risk of police mistreatment.

Independent and foreign media under threat

Hungarian pro-government circles have successively silenced dozens of independent media outlets over the past decade. Many fear that, currently the biggest and most-read independent news site in Hungary, will be the next in line.

On 21st June 2020, nearly 100 Index journalists and staff members released a statement explaining that the site is in danger. In the statement, the journalists said:

We wanted to cut through the fog of rumours and conspiracy theories and have a way to unmistakably let our readers know when we think there is trouble. Index is under such external pressure that it could spell out the end of our editorial staff as we know it. We are concerned that with the proposed organisational overhaul, we will lose those values that made the biggest and most-read news site in Hungary.”

The site operates under a complex ownership structure, with government allies in certain key positions for a few years. By 23rd June 2020, some of the proposed changes were withdrawn, with the CEO of Index András Pusztay stepping down. However, the editorial staff still consider the independence of the outlet to be in danger.

In a separate development, several European media outlets have been asked to apologise to the Hungarian government by Hungary’s ambassadors in the respective countries where these outlets are based. More specifically, the outlets in question were asked to apologise regarding reports on restrictions on press freedom during the pandemic (criminalisation of fake news) and the government’s power to rule by decree.

Reporters without Borders issued a statement labelling this as a “ploy” to intimidate foreign journalists.

After restricting press freedom in Hungary, the Hungarian government now wants to silence the foreign media. Given the content of these apology demands and the tone with which they were presented, they clearly constitute an unacceptable intimidatory operation, one that could have a chilling effect on foreign newsrooms and their correspondents in Hungary,”- Pavol Szalai, the Head of RSF’s European Union and Balkans Desk.

On the decline in freedom of the press during the pandemic, one outlet told the RSF:

No editor or journalist can avoid the chilling effect of the regime's tactics of fear. We are forced to consult our lawyer much more frequently than before. In many cases, information is deliberately held back to force us into murky territory, while the regime is out there waiting for the right moment to strike,”- Gábor Horváth, the Népszava newspaper’s foreign news editor.

The European Centre for Press and Media Freedom (ECPMF) issued a legal opinion which states that the government response to the COVID-19 pandemic goes against European legal standards. Author of the legal opinion, Dr. Polyák Gábor, said:

The Hungarian Government’s response to the COVID-19 pandemic demonstrates their willingness to use any excuse to restrict and attack media freedom. Without an independent Constitutional Court or any other adequate check on state power in Hungary, these actions that violate both Hungarian and European law can continue to demonise, isolate and threaten journalists and media workers. While the COVID-19 pandemic will come to an end, the pandemic of threats to media freedom looks set to continue in Hungary.”
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