EU Court Criticizes Hungary’s Attack on Foreign-Funded NGOs

(Bloomberg) -- Hungarian Prime Minister Viktor Orban suffered a setback in his clash with the European Union over democratic norms as an adviser to the bloc’s highest court slammed his crackdown on foreign-funded groups.

A controversial Hungarian law “introduces unjustified restrictions” on non-governmental organizations that receive donations from abroad, hampering the free movement of capital, Advocate General Manuel Campos Sanchez-Bordona of the EU Court of Justice said in a non-binding opinion on Tuesday.

He also called the law, which has been used to target groups linked to financier George Soros, an “unjustified interference” with fundamental rights.

The case pits Hungary against the European Commission, the EU’s executive authority, which sued the state in 2018 for imposing allegedly discriminatory, unnecessary and unjustified restrictions. The Luxembourg-based court follows advocate general opinions in a majority of cases.

The legal dispute coincides with the looming showdown between Orban and the European People’s Party, the EU’s biggest political group that’s considering expelling the Hungarian ruling party over the erosion of the rule of law.

Orban Unfazed

Orban’s Fidesz party said it’s standing by the 2017 law on NGOs as it “serves Hungary’s security and boosts the transparency of foreign-funded, pro-immigration Soros organizations,” according to an emailed statement.

Hungary’s Constitutional Court in 2018 opted against issuing rulings on the law, pending the outcome of the case. Orban, in power since 2010, has vowed to end liberal democracy in the nation and pledged to stick to the campaign against foreign-funded NGOs.

The premier has accused those groups of undermining his government partly by opposing his anti-immigration agenda. The legislation mandates that foreign-funded NGOs must register and display in public documents their foreign affiliation.

Affected organizations have said the aim is to try to discredit them. Orban in 2018 followed up with more draconian rules, dubbed the “Stop Soros” law, criminalizing the activities of individuals or NGOs that help asylum seekers the government considers to be “illegal immigrants.”

Soros’s Open Society Foundations, which funds dozens of non-governmental organizations around the world, moved its Budapest-based operations and staff to Berlin in response to the crackdown.

While the NGO law doesn’t name Soros -- who was born and raised in Budapest -- ruling party politicians first floated the idea of an NGO bill in January 2017, saying they wanted to “sweep out” organizations associated with the financier, including those that promote human rights and government transparency.

The case is: C-78/18, Commission v. Hungary.

To contact the reporter on this story: Stephanie Bodoni in Paris at sbodoni@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Andras Gergely, Andrea Dudik

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