Advocate General of the CJEU: Hungarian law that restricts NGO financing from abroad is incompatible with EU law

According to the Court of Justice Advocate General’s opinion, the fact that under the Hungarian 2017 Lex NGO, civil society organisations receiving foreign donations are subject to restrictions violates the right to the protection of private life and the right to freedom of association, and infringes the principle of free movement of capital. This is not justified by the general interest objectives relied on by the government of Hungary. Based on the AG opinion published today, the Court of Justice of the European Union is likely to decide that the Lex NGO is in breach of the EU law.

The Hungarian government should respond to criticism with arguments and dialogue, not by stigmatizing and silencing dissenters. This is the real significance of the proceedings about the Hungarian Lex NGO before the CJEU.

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 all their publications and on their websites. 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’s opinion states 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 AG 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. Furthermore, the Advocate General considers the respective EU law sufficient to fight against money laundering and terrorist financing (the further objectives relied on by the Hungarian government).

Now, the CJEU will make a decision. The fact that the Lex NGO is considered to be in breach of EU law also by the Advocate General strengthens our hope that the law targeting organizations daring to criticize the government, will fail at the Luxembourg court as well and the judgment will result in the Hungarian government having to repeal Lex NGO.

Amnesty International Hungary
Hungarian Civil Liberties Union
Hungarian Helsinki Committee

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