The Court of Justice of the EU (CJEU) declared that Hungary’s "Lex NGO" legislation, introduced in 2017, is in breach of EU law in imposing discriminatory and unjustified restrictions on the financing of NGOs by persons established outside the country, contrary to free movement of capital.
Additionally, the court declared that the restrictions violate the right to freedom of association, the rights to respect for private and family life and to the protection of personal data.
The "Law on the Transparency of Organizations Funded From Abroad", which is also known as "Lex NGO", has mandated civil organizations receiving more than EUR 20,815 direct or indirect funding from abroad to re-register as an "organization funded from abroad" and to put this label on every publication and on their website.
According to a press release by Amnesty International Hungary, some 23 directly impacted NGOs (including Amnesty International itself) operating in Hungary have turned to the Hungarian Constitutional Court requesting a review. The court, however, has suspended its procedure pending the judgment of the CJEU.
The CJEU’s decision concludes the infringement procedure launched by the European Commission in the summer of 2017, referring Hungary to the CJEU in December of the same year. The 23 organizations also filed a case with the European Court of Human Rights, which remains pending.
Responding to the decision, Amnesty International Hungary’s director Dávid Vig said, "Today’s landmark decision deals a blow to the Hungarian authorities’ efforts to stigmatize and undermine civil society organizations who criticize government policy. The law requiring NGOs to label themselves as foreign-funded was never really about fighting money laundering and international terrorism, as the Hungarian government claimed. Instead, it is a blatant attempt to muzzle critical voices and chip away at public support for organizations fighting for human rights, justice, and equality."
"It is vital that the Hungarian Constitutional Court now acts quickly to resume its review of this repressive law, which should be annulled as soon as possible," he added.
According to a report by state news wire MTI, Gergely Gulyás, the head of the Prime Ministerʼs Office, said today that Hungary has always respected the decisions of the CJEU in the past and will do so in the future.
He added that the government still needs to examine the ruling in detail but noted that it was heartening that the court agreed with the governmentʼs goal of increasing transparency at NGOs so only the tools with which to achieve this need to be changed.