On 13th June 2017, the Hungarian parliament adopted the Law on the Transparency of Organisations Supported from Abroad. The law is part of a series of measures that began in 2013 designed to discredit and silence civil society organisations that are trying to hold the government to account to its obligations concerning anti-corruption, environmental protection, fundamental rights, democracy and the rule of law. Other measures include unfounded allegations by members of the Hungarian government, misleading reporting from government-friendly media, the terms of the ‘Let’s Stop Brussels’ so-called consultation, as well as unjustified investigations.

The government of Hungary was requested to withdraw the draft law, Bill T/14967, outright, by European Parliament Resolution of 17 May 2017 on the situation in Hungary. The First Vice President of the Commission, Frans Timmermans expressed concern that the draft law was incompatible with EU law including rules concerning free movement of capital. The EU Fundamental Rights Agency and the Council of Europe Commissioner for Human Rights also expressed their concern about the compatibility of the draft law with European fundamental rights standards. Resolution 2162 (2017) of the Parliamentary Assembly of the Council of Europe requested the Hungarian government to suspend the national parliamentary debate on the draft law pending the opinion of the Venice Commission.

Cosmetic changes were made to the bill before it was adopted. In its final form, the law continues to conflict with various rules of EU law including Directive 2015/849 on anti-money laundering and terrorist financing, Article 63 of the Treaty on the Functioning of the European Union and Directive 88/361 concerning free movement of capital, as well as various provisions of the EU Charter of Fundamental Rights. The law as adopted failed to incorporate the recommendations contained in the preliminary opinion of the Venice Commission, released before the adoption of the law. Following the law’s adoption, the Venice Commission’s final opinion stated that the ‘Law will cause a disproportionate and unnecessary interference with the freedoms of association and expression, the right to privacy, and the prohibition of discrimination’.

The Hungarian Civil Liberties Union, Hungarian Helsinki Committee and Liberties reaffirm that this law is unnecessary and should be repealed. Existing legislation already guaranteed the financial transparency of civil society organisations.

Civil society organisations form an essential part of the national infrastructure required to protect and promote the rule of law, fundamental rights and democracy, as repeatedly stated by the EU’s institutions. The implementation of the EU’s fundamental values relies on the existence of adequately resourced civil society organisations free to carry out their activities without undue interference. It is in recognition of this fact that the EU provides technical, financial and political support for civil society to flourish in third countries, including during the process of accession to the EU.

We call on the First Vice President of the European Commission, Frans Timmermans, to issue a statement of support for independent civil society organisations working in Hungary to promote the fundamental values of the EU. We also call on the First Vice President to establish a focal point in the European Commission reporting directly to him, whom civil society organisations can contact to report harassment and undue restrictions on their work.

We call on the European Commission to proceed as expeditiously as possible to open infringement proceedings against the government of Hungary with respect to the law. However, the European Commission should recognise that infringement procedures are an inadequate tool to contain a concerted and holistic strategy designed to dismantle the infrastructure that supports democratic standards, protection of fundamental rights and the rule of law. Even when infringement procedures lead to a favourable judgment from the Court of Justice, the decision can be implemented in such a way as to deprive it of its practical impact, as is well illustrated by Case C-286/12 Commission v Hungary.

Accordingly, we call on the European Commission to activate its framework on the rule of law with regard to Hungary. After seven years of measures designed to erode the balance of powers and pull authority towards the executive, the infrastructure responsible for maintaining the rule of law in Hungary is unable to protect fundamental rights or maintain democratic standards. By activating the rule of law framework the Commission will be able to draw up more holistic recommendations to the government of Hungary, based on a formal dialogue, over how to bring the state back into line with the EU’s fundamental values. This can serve as an authoritative point of departure for further discussion of the situation among the Member States in the Council.

We call on the European Parliament to follow up on its resolution of 17 May 2017 on the situation in Hungary with a view to triggering Article 7(1) as expeditiously as possible.

We also call on the European Commission, European Parliament and the Council to take measures to support civil society organisations that promote the implementation of EU law and the fundamental values of the EU. While the example of Hungary may be the most extreme, civil society organisations are also facing restrictions on their activities, funding cuts and attacks on their reputation in other Member States. The Union should therefore take measures to support civil society organisations. Such measures should include the creation of a fund to support civil society organisations inside the EU that promote the fundamental values of the EU. Such a fund should provide operational grants, support litigation and watchdog activities and capacity building activities.