Hungary clamps down on foreign financing, dealing a severe blow to NGOs

Hungary has officially become Europe’s first “illiberal democracy”, an outcome Prime Minister Viktor Orban all but promised a few years back.

The Hungarian parliament passed a law on June 13 enacting Transparency for Organisations Funded Abroad. This bill has been heavily criticized. It tightens the control over nongovernmental organizations that receive funding from abroad.

Organizations that receive foreign funding of more than 7.2 million Hungarian Forints per year (approximately US$26 000) must be listed in a public register. Foreign donors are required to be identified.

Organizations that do not comply may face financial sanctions or closure.

In Budapest, thousands of people marched to protest the law and to support NGOs. The government in Poland is also putting pressure on NGOs.

Amnesty International’s branch in Hungary, which is directly affected by the new legislation, called the new law “the latest in a escalating crackdown against critical voices, and will hinder critically important work of civil society groups”.

Displays of authoritarianism

Orban’s strategy targets civil society by imposing laws and regulations that are debilitating but presented as “technical requirements” necessary to promote national security or transparency.

Other countries have implemented similar provisions, which often represent a sneaking Authoritarianism. They limit freedom of association and expression and silence critical voices.

The government has admitted this. Szilard Németh, a politician of the right and deputy chairperson of the national security committee in parliament, was cited in the Guardian and Reuters as stating the proposed law would target NGOs that receive funding from organizations related to American-Hungarian philanthropist and businessman George Soros. His Open Society Foundations support pro-democracy groups around the world.

George Soros, an American-Hungarian philanthropist and businessman, is a well-known philanthropist. World Economic Forum/Wikimedia CC-BY-SA

Zoltan Kovacs, the government’s spokesperson on April 25, also mentioned “so called NGOs”, saying Open Society Foundations funded groups that work on immigration issues.

The law on civil society comes after a quick-track law that targeted the Soros-founded Central European University. This law could force the prestigious institution to abandon Budapest. Soros called the Orban government “mafia”.

A tried-and-tested tactic

Restriction of foreign funding has become a common tool for governments to suppress civil society. The International Centre for Non-Profit Law reported that 36% (or a total of 36) of the restrictive civil society laws passed globally between 2012 and 2014 focused on international funding.

The international standards stipulate that associations must be allowed to receive, seek and use foreign or global funding and should not be stigmatized for doing so.

People protested against the bill that would undermine Central European University in April 2017. Bernadett Szabo/Reuters

In 2016, the UN Human Rights Council expressed concern over the trend of funding restrictions. Thomas Carothers of the Carnegie Endowment for Peace, an expert on the subject, described the attacks on foreign financing as the ‘leading edge of broader crackdowns against civil society.

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