Advocate General says Hungarian restrictions on financing civil society organisations from abroad are not compatible with EU law

EU Advocate General Campos Sanchez-Bordana has said that Hungary’s restrictions on civil society organisations being funded from abroad infringe on the principle of free movement of capital and principles of fundamental rights and are not compatible with EU law.

Under the 2017 legislation, civil society groups that receive funding over a certain threshold from outside Hungary must register with the authorities as “organisations in receipt of support from abroad.” As part of this registration process, these organisations also have to name donors whose contributions exceed approximately €1,500 and indicate their exact contributions. This information is then published and is publically available. In addition, organisations have to highlight that they are in receipt of funds from abroad on their websites and in their publications.

In response, the European Commission initiated infringement proceedings against Hungary before the Court of Justice of the European Union. It alleged that the Hungarian legislation violates the principle of free movement of capital and the right to respect for private life, protection of personal data and freedom of association, all rights enshrined in the Charter of Fundamental Rights of the European Union. 

According to the Advocate General (AG), the making of a donation from overseas is movement of capital. The movement of capital can be subject to conditions, however when these conditions are applied solely to foreign donations they are more likely to affect the nationals of other Member States than Hungarian nationals. The AG found that this results in a restriction on the principle of free movement of capital, leaving organisations in financial difficulty and limiting their freedom of association. The publication of the names of donors may also have a chilling effect, as well as being an interference on the private life of persons as regards the processing of their personal data.

Further, the AG held that the blanket rules imposed on all civil society organisations cannot be justified as fighting money laundering and terrorist financing – current EU laws are seen to be sufficient. The measures were found to be, in fact, disproportionate given the threshold of €1,500 being excessively low given the gravity of the interference.

The Advocate General’s Opinion is not binding on the Court of Justice. It is the role of the Advocates General to propose to the Court, in complete independence, a legal solution to the cases for which they are responsible. The Judges of the Court will now begin deliberations in this case and judgment will be given at a later date.

Click here for the Advocate General’s opinion.



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