EU infringement procedure moves to next level

EU

With the receipt of the relevant petition from the European Commission, infringement proceedings begun against Hungary due to its legislation on foreign-funded NGOs has officially been put before the Court of Justice of the European Union (CJEU), the Luxembourg-based court announced on Thursday.

The EC announced in December that – after no progress on the matter had been made – it had taken the third step in infringement proceedings begun in July with regard to Hungaryʼs law on non-governmental organizations (NGOs), referring Hungary to the European Court.

The Hungarian legislation, adopted by Parliament in June, requires NGOs that receive foreign funding of over HUF 7.2 million a year to specify that they are “organizations supported from abroad” in all publications, websites and press materials they disseminate. The legislation also establishes a reporting obligation for this funding, as well as sanctions for failure to comply with the provisions of the law.

The EC said earlier that provisions in the NGO law “indirectly discriminate and disproportionately restrict donations from abroad to civil society organizations,” adding that this “violates the right to freedom of association and the rights to protection of private life and personal data enshrined in the Charter of Fundamental Rights of the European Union, read in conjunction with the EU Treaty provisions on the free movement of capital.”

In addition, the EC has said, the law “introduces unjustified and disproportionate restrictions to the free movement of capital, as outlined in the Treaty on the Functioning of the European Union,” while new registration, reporting and publicity requirements are “discriminatory and create an administrative and reputational burden for these organizations.”

In recent weeks, separate infringement procedures have also been brought before the European Court regarding amendments to Hungaryʼs law on higher education and the countryʼs rejection of the EUʼs refugee quotas.

Online business news portal vg.hu noted today that if a EU Member State fails to act in response to an initial ruling of the European Court, the EC may initiate a fresh infringement procedure, with the option of turning to the court - having issued a warning to the country concerned - to recommend the imposition of a fine.

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