Summary: Hungary becomes the first country in the EU to adopt a ‘foreign agent’ law

27 June 2017: Hungary’s Law on the Transparency of Organisations Supported from Abroad comes into effect today. This is the first time an EU country has introduced legislation requiring NGOs to register if they receive foreign funding. SRT grantee the European Center for Not-for-Profit Law (ECNL) is conducting advocacy around the new law and has written a briefing raising awareness of its implications.

The law, adopted on 13 June, introduces a new status, ‘organisation supported from abroad’, which applies to all Hungarian associations and foundations that receive funding from any foreign sources above 7.2 million HUF (approx. €23,500) in a tax year. These organisations must notify the court to be registered as an ‘organisation supported from abroad’. They must indicate their status on their website, publications and press materials, and the status will also be published in the Hungarian Civil Society Organisation Registry and on the electronic portal of the Ministry of Human Capacities.

Organisations receiving foreign funding will also have additional reporting requirements on their foreign resources – they will have to report on each transaction they have had with donors who have contributed at least 500,000 HUF (approx. €1,600) per tax year, and provide donors’ names, locations and other information. Failure to comply with the law will result in high fines and possibly termination.

In other regions, similar laws have resulted in limited access to funding, not only because of the laws, but also due to parallel campaigns by governments condemning foreign funding recipients. Such an environment also makes the labelled organisations vulnerable to further restrictive legal measures.

ECNL’s director, Katerina Hazi-Miceva Evans, said, ‘this is an unprecedented action within the EU. It sets a negative example, and we are already seeing early warning signs of similar rhetoric emerging in other countries in the neighbourhood. The changing environment requires a coordinated and robust approach from all players, including not just CSOs, but the EU, donors, and the public’.

Further details from ECNL’s website: http://ecnl.org/hungarian-law-on-the-transparency-of-organisations-supported-from-abroad-what-is-at-stake/