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Apr 11, 2017 - Zoltán Kovács

Hungary’s draft legislation would require NGOs to improve transparency

Despite recent reports claiming that an “NGO crackdown” is under way in Hungary, the reported draft legislation confirms what the government of Hungary has been saying all along: this is about transparency in civil society. NGOs, not even those representing foreign interests, are not in jeopardy in Hungary.

Many democracies have seen political or economic interests, sometimes foreign, attempt to exploit vehicles like non-governmental organizations, because of the legitimacy that they offer, to influence public discourse and decision-making. According to current Hungarian legislation, political parties are prohibited from receiving foreign funding. NGOs, however, even though they engage in political activity, are not prohibited from receiving foreign funding and are not necessarily reporting it. New Hungarian draft legislation aims to address this problem of transparency.

“Hungarian citizens must be given the right to know about all public actors, who they are and who pays them. We have the right to know,” Prime Minister Viktor Orbán said about the new NGO regulations. “So we want transparency.”

In Hungary, there are more than 62 thousand civic organizations in a country of less than ten million inhabitants. Civic groups remain an essential part of a healthy democracy. But a clear distinction must be made between grassroots organizations made of “volunteers, trying to advance their neighborhood, the society” and “international networks, which call themselves civilians,” as the prime minister has said, those groups that “open up local offices in certain countries, hire activists, usually even pay them and…propagate international interests.”

Many responsible governments around the globe who understand the need for transparency and local accountability have taken measures to address this latter group.

According to draft legislation that became public April 2, 2017, civic organizations receiving donations above a certain threshold (7.2 million HUF, approximately 25 thousand USD) from foreign sources (except financial support from EU funds) would be required to report it. Those organizations would have 15 days to declare the support, which would then be listed in a public registry. These civic organizations receiving foreign funding would also be required to report it on their homepage and in their publications, and the financial reports would need to be made annually. If an organization fails to comply with the law, it would first receive a warning, then face a possible fine and suspension.

A prominent Hungarian weekly and vocal government critic, HVG.hu, reviewed the draft legislation thoroughly and reported that “it is practically not very dangerous,” and their legal experts found no basis for concerns about bureaucratic and administration burdens.

Some of the NGOs that receive foreign funding stirred controversy with their sensational claims about the new rules without knowing the details. Amnesty International argued that the new rules mimic Russian legislation and would have a detrimental effect on civil society. Any reasonable observer, armed with the facts, can see that they do not.

The draft legislation that has been made public clearly shows that the government would require a reasonable minimum of reporting from foreign-funded NGOs engaging in domestic political issues, requirements that are less onerous than FARA regulations in the US. The goal from the beginning has always been greater transparency.