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Jun 08, 2017 - Zoltán Kovács

Case Closed: Venice Commission says Hungary’s draft NGO law pursues ‘legitimate aim of ensuring transparency’

The draft law “pursues the legitimate aim of ensuring transparency of civil society organisations”.

The Hungarian Parliament prepared a draft law on NGOs that aims to improve transparency among civil society groups, specifically those receiving funding from outside of Europe. Hungary’s Ministry of Justice decided at the end of April to turn to the European Commission for Democracy through Law – also known as the Venice Commission – for a professional legal opinion on the draft law before it goes to a vote in the Hungarian Parliament.

Last Friday, the Venice Commission published its opinion, and what they said about Hungary’s draft NGO law will surprise some. For example:

The draft law “pursues the legitimate aim of ensuring transparency of civil society organisations,” according to the Commission, which is an advisory body to the Council of Europe. It “may also contribute to the fight against money laundering and the financing of terrorism.”

“[E]nsuring transparency of NGOs receiving funding from abroad in order to prevent them from being misused for foreign political goals,” the Commission wrote, citing an earlier opinion, “pursues a prima facie legitimate aim and can be considered to be ‘necessary in a democratic society in the interest of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others’”.

Furthermore, it is “legitimate for States to monitor, in the general interest, who the main sponsors of civil society organisations are,” according to the Venice Commission. “It could also be legitimate, in order to secure transparency, to publicly disclose the identity of the main sponsors.”

The draft legislation came under heavy political fire soon after its conception earlier this year. It aimed to address a problem – lack of transparency of foreign funding of groups operating as NGOs – that has become a source of concern for many countries around the world, from the United States to Israel. The Hungarian draft law, unlike the one in the United States, proposed relatively lighter reporting requirements and, contrary to the Israeli and Russian laws, avoids labeling foreign-funded NGOs as “agents”. Unlike a proposal in the European Parliament, it does not consider taking away public funding from these NGOs. Hungary’s draft law says that NGOs that receive funding from outside of Europe that exceeds a certain level must publicly declare that they receive funding from abroad in their materials and the registry. That’s pretty straightforward and clearly in line with what the Venice Commission says is a “legitimate aim”. (More details on the draft legislation available here and here.)

The Venice Commission did raise some critical points and recommended a few modifications. For example, the Commission suggests that the length of the deregistration period of an NGO be reduced from three years to some shorter period and that the four stages of the sanctions against groups failing to comply be modified for greater proportionality. Otherwise, the Venice Commission opinion welcomed “the fact that all the important decisions (on the fine, dissolution and cancellation) are taken by a judicial organ”.

The Commission also pointed out that the draft law could have a stigmatizing effect on those NGOs that receive foreign funding. We disagree. The draft, as noted above, does not apply the term foreign “agents” to these groups and the Commission’s concern would seem to be a contradiction to the opinion’s fundamental finding that “it is legitimate, in order to secure transparency, to publicly disclose the identity of the [NGOs’] main sponsors.”

The governing parties in Parliament will support a large part of the Venice Commission’s recommendations, according to Gulyás Gergely, Fidesz deputy group leader. The law will be put to a vote next week, June 12.

We will likely see some small, technical changes prior to the vote, but the Venice Commission opinion pretty much puts the matter to rest. To all those who had been ringing the alarm bells that the Orbán Government is carrying out a “crackdown” on NGOs, this opinion from the Venice Commission says, well, not true.

On the contrary, the Commission said, the draft law pursues a legitimate aim of improving transparency of NGOs. What’s more, it is legitimate for a state to monitor the main sponsors of NGOs and legitimate to publicly disclose the identity of the main sponsors. It’s also not only legitimate but “necessary in a democratic society” to require transparency of NGOs receiving funding from abroad in order to prevent them from being misused for foreign political goals.”

Case closed.