HUNGARY: the ‘stop Soros’ draft laws target the wider CSO sector

(ECNLOn January 18 the Hungarian government introduced a package of three draft laws targeting civil society organisations under the title Stop Soros. Following the 2017 law on transparency of foreign-funded organisations, this package of draft laws is yet another restrictive measure Hungarian CSOs have to face. It fits into the EU-wide pattern of threats and pressures targeting civil society, which the European Union Agency for Fundamental Rights (FRA) outlined in its recently published report

Overall, the draft package has very vague provisions and it is not clear how they will be implemented. The three draft laws of the “Stop Soros” package are named as:

  • Draft law on the social responsibility of organisations supporting illegal migration;
  • Draft law on immigration financing duty;
  • Draft law on immigration restraint.

The package affects many areas. Below we highlight few provisions that are not only targeting those who apparently engage in ‘illegal migration’, but also hidden provisions which target the wider group of CSOs:

1. CSO sector further stigmatised

If adopted, the Package will introduce a new category of CSOs called “organisation supporting illegal migration”. They will need to notify the court about foreign funding received or used to support unlawful entry, relocation and residence to Hungary and submit reports on how such funding was spent, including the list of persons and organisations receiving personal benefits and reimbursement of costs. The government will create a public list of such organisations and require them to disclose the amount and aim of foreign funding on their website and press materials. Foreign funding will need to be kept on separate bank accountsbanks will need to report about transfer activities to the National Bank and the prosecutor each month.  This will lead to further stigmatisation, likely discourage citizens’ engagement and support to CSOs and add even more financial and administrative burdens on CSOs because of the increased reporting requirements.

2. Foreign funding taxed

“Organisations supporting illegal migration” would have to pay a so-called ‘migration financing duty’of 25% of the foreign funding annually. This significantly threatens CSOs’ ability to receive funding from abroad and also reducing funding that they may be able to use to implement activities or provide services.

3. Supporters sanctioned

The proposal provides legal grounds to restrain persons from the border zone or in justified cases the entire territory of Hungary for activities that aid illegal entry or stay of third country citizens, or giving financial or in-kind support for such activities. This will disconnect citizens from supporting CSOs (e.g., through volunteering, or individual donations) out of fear of being sanctioned.

4. Services for those in need threatened

While the package seemingly focuses on organisations that support illegal migration, it will have a significant impact on the financial and operational ability of broader group of CSOs. It introduces stricter requirements on organisations having the so-called public benefit (charity) status. In addition to the existing rules, the proposal demands that at least half of the funding received by such organisations during a reporting year must come from Hungary. Furthermore, organisations must now show that funding they receive from 1% designation (a scheme which allows taxpayers to designate 1% of their personal income tax to a CSO and stimulates individual giving) reaches at least half of the foreign funding. So far, approximately 20% of CSOs have this status.

If adopted, this will lead to public benefit organisations – especially those predominantly relying on foreign funding – facing difficulties to meet the criteria. The public benefit status grants organisations with tax and other benefits; losing their status will deprive them of such benefits and make their operations difficult to sustain. Importantly, this will mean less services to people living in Hungary. Public benefit organisations are required by law to provide tasks that fall under government competence. By obtaining the status and related benefits, such organisations have been able to provide significant services to different groups and fill in gaps where government has lacked resources or decided not to prioritise (e.g., homelessness, education, social service delivery, development).

ECNL is deeply concerned about the draft laws, as they are discriminatory and violate fundamental rights and freedoms, including freedom of association. Restrictions on foreign funding will discourage private giving to affected organisations both from domestic and foreign resources.  The law is basically taxation of donors and donations and will affect donations coming from entities from EU countries as well.  The proposals will have an ultimate impact on the citizens and others in need of public benefit services, and will further stigmatize and delegitimize Hungarian civil society.

The package is now open to public consultation without indicating a deadline for submitting written comments. According to the plans of the government, the package will be adopted in February. The draft laws foresee details to be regulated through implementing regulations in the form of government decrees – this means more discretion without appropriate oversight. ECNL continues to work with different partners to analyse the impact and support response.

You can read the legislative package below:

Originally published on ECNL

Featured image by ECNL