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Hungarian Law on the Transparency of Organisations Supported from Abroad: What is at stake?

On 13 June 2017, Hungary’s Parliament adopted the Law on the Transparency of Organisations Supported from Abroad (i.e., foreign funded organisations), legislation widely viewed by intergovernmental and civil society organisations (CSOs) as a major obstacle to the work of Hungarian CSOs and their interactions with civil society domestically and internationally. The law came into effect on 27 June.

The Law introduces a new status of “organisation supported from abroad” which applies to all Hungarian associations and foundations that receive funding from any foreign sources (e.g., individuals, foundations, government aid agencies, direct EU funding) above 7,2 million HUF (approx. €23,500) in a tax year. Such organizations must notify the court to be registered as “organisation supported from abroad”. The organizations will also be publicly labelled: they must indicate their status on their web site, publications, press materials, and the status will be published on the CSO Registry and on the electronic portal of the Ministry of Human Capacities. CSOs will be burdened with additional reporting requirements on their foreign resources – e.g., they 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 donor’s names, location, etc. Failure to comply with the law (e.g., to notify the court) will result in high fines and possibly termination.

This is the first law of its kind in a European Union country. There is concern about what this new Law foreshadows: in other regions, similar laws have resulted in limited access to funding – not only because of the laws, but also due to parallel negative campaigns by governments, condemning foreign funding recipients. Such an environment also makes the labelled CSOs vulnerable to further restrictive legal measures.

In our briefer, we highlight five key concerns about the new Law:

  • Why is it a threat to civil society’s survival?
  • How does it stir distrust and suspicion?
  • How does it threaten services for those most in need?
  • Which international standards does it violate?
  • And whether it is really about transparency?

To read what is next for Hungarian civil society and see the full briefer, please click on the picture above.