Advocate General of the CJEU: the Hungarian law that restricts financing of NGOs from abroad is not compatible with EU law

According to the Advocate General’s opinion, it violates the right to the protection of private life and the right to freedom of association that under the Hungarian “Lex NGO” civil society organisations shall register their foreign donors. This is not justified by the general interest objectives relied on by the government of Hungary. Based on the opinion published on 14 January, the Court of Justice of the European Union may reach a judgment that the Lex NGO is in breach of the EU law.

Amnesty International Hungary

Hungarian Civil Liberties Union

Hungarian Helsinki Committee

The Hungarian government should respond to criticism with arguments and dialogue, not by stigmatizing and silencing dissenters. This is what makes the proceedings about the Hungarian Lex NGO before the CJEU so important. 

In 2017, Hungary’s governing majority passed a law requiring NGOs that receive more than HUF 7.2 million annually from foreign sources to register as organizations receiving support from abroad. The law also requires affected NGOs to indicate this label in their publications and on their homepages. The European Commission reacted to the passing of the law on the “Transparency of Organisations Receiving Foreign Funds” by launching an infringement procedure in the summer of 2017, and referred Hungary to the CJEU for the law in December 2017. The Commission argued that the Lex NGO unduly restricts the freedom of association, the activities of NGOs and the free movement of capital. The CJEU has been asked to decide whether the Lex NGO complies with EU law.

The CJEU proceedings are nearing the end. In preparation for the decision, the opinion of the Advocate General proposing a legal solution to the case was presented on 14 January. In the opinion, Advocate General Manuel Campos Sánchez-Bordona proposed the CJEU to declare that the Hungarian Lex NGO unduly restricts the free movement of capital, in that it amounts to unjustified interference with the right to respect for private life and personal data, and the right to freedom of association.  

The Advocate General is of the view that donating from abroad to a Hungarian NGO qualifies as a movement of capital. The Lex NGO subjected this movement of capital to conditions that may, among others, deter foreign supporters from donating to Hungarian civil society organisations, because donors may fear from getting stigmatized if the details of the transactions are published. Moreover, listing their names and the sums of their donations in a publicly accessible register means the processing of their personal data, interfering with their private life. 

According to Sánchez-Bordona, the law may also affect the viability and survival of civil society organisations concerned through making donations more difficult, and so may restrict the right to freedom of association. The Hungarian government relied as an objective, among other things, on the protection of public policy as a basis for the restrictions. However, the Advocate General is of the opinion that this objective could only legitimise measures against NGOs suspected of breaching public policy, and, in turn, does not legitimise imposing general obligations on every NGO ex ante. Furthermore, the Advocate General stated that he considers the respective EU law sufficient to fight against money laundering and terrorist financing (the further objectives relied on by the Hungarian government).

Next, the CJEU will make a decision. The fact that the Lex NGO is considered to be in breach of the EU law also by the Advocate General strengthens our hope that the Lex NGO, targeting organizations daring to criticize the government, will fall before the Luxembourg court as well, and the judgment will result that the Lex NGO will have to be repealed.