A bill introduced by a member of Hungary's ruling Fidesz party is designed to gut civil society and strangle freedom of expression and democratic governance, Human Rights Watch said today. The proposed law, which should be rejected, gives sweeping powers to a government-appointed body to label foreign-funded civil society and media organizations as threats to national sovereignty and subject them to draconian, punitive measures.
The bill "On the Transparency of Public Life," empowers the Sovereignty Protection Office, a government-appointed body, to recommend any legal entity receiving foreign support, including European Union funds, be placed on a government-maintained watchlist. These organizations would be prohibited from receiving donations through the 1 percent income tax designation, a common source of funding, and would be required to obtain legal declarations from every donor that the funds are not of foreign origin. All foreign support funds must be pre-approved by Hungary's anti-money laundering body (part of the tax authority). This applies to existing foreign grants which would be frozen and could take months to be reviewed.
"The Hungarian government is escalating its campaign to silence dissent and dismantle independent civil society ahead of next year's elections," said Hugh Williamson, Europe and Central Asia director at Human Rights Watch. "The European Union has to recognize the grave threat to the rule of law the Hungarian government poses, and act firmly before the flame of democracy is snuffed out."
This is the latest in a long line of assaults on rule of law and democratic governance in Hungary. Since 2010, Prime Minister Viktor Orbán has used his parliamentary supermajority to systematically erode democratic checks and balances.
The bill requires civil society and media organizations' leaders, founders, and oversight board members to submit asset declarations and be designated "politically exposed persons," currently applied mainly to parliament members and government officials, subjecting them to further scrutiny, including tax audits, asset investigations, and financial inspections.
The anti-money laundering body can issue fines of up to 25 times the amount received. Failure to comply can result in the organization's dissolution, with its assets transferred to the state. This effectively ends foreign funding as a viable source of revenue for Hungarian civil society and media groups.
The Sovereignty Protection Office would be able to conduct on-site inspections and search homes. The office could seek police assistance to conduct the inspections, raising serious concerns about privacy and due process. The 2023 Sovereignty Protection Act gave the office the power to investigate anyone the authorities deem to be pursuing vaguely defined "foreign interests." A case over this law initiated by the EU Commission in October 2024 against Hungary before the Court of Justice of the EU is pending.
The bill provides no meaningful legal recourse, raising potential violations of the right to a fair procedure and effective legal remedy. A decision by the tax authority to refuse to allow foreign funding can be challenged but only directly to the Supreme Court and even a reversal would not address the other more significant harm.
The bill treats all foreign funding - including from the EU - as potentially harmful to Hungary's sovereignty. Any activity capable of influencing public opinion is deemed a potential threat, particularly those that could affect voter intent or democratic debate.
This means work by any organization - including media organizations, political parties, and intergovernmental bodies - that highlights abuses by the Hungarian government could be potentially liable to sanctions. By framing public debate and criticism of the government as existential threats to the state, the Hungarian government is attempting to crush the pluralism that sustains democracy with a bill that bears the hallmark of the infamous Russian foreign agent legislation, Human Rights Watch said.
The bill comes on the heels of problematic fundamental law and other law changes adopted in April, which pose serious threats to lesbian, gay, bisexual, and transgender (LGBT) people, the freedom of assembly, and the rights of some Hungarians with dual citizenship.
Orbán's government has undermined judicial independence, restricted independent media and civil society, vilified migrants and asylum seekers, continued unlawful border pushbacks, limited access to asylum, targeted LGBT people with discriminatory laws, and rolled back protections for women and girls. Over the past six years, Orbán has increasingly governed by decree, invoking successive states of danger or emergency to bypass parliamentary oversight and consolidate executive power.
Efforts by EU institutions to hold the Hungarian government accountable - through infringement proceedings, European Union Court rulings, and the suspension of EU funds -have so far had limited effect. In 2018, the European Parliament triggered the article 7 procedure against Hungary, citing a systemic threat to the EU's core values as set out in the Treaty on European Union. If upheld, such a breach could lead to the suspension of Hungary's voting rights in the EU Council. EU member states should take this most recent attack on the rule of law and democratic governance as a clear signal and use the upcoming General Affairs Council meeting in May 2025 to immediately move article 7 proceedings forward to a vote, Human Rights Watch said.
If the bill is adopted by parliament, the European Commission should immediately open new infringement proceedings against Hungary for the rights abusive and anti-democratic law. In the meantime, the commission should seek interim measures to suspend the effect of the earlier Sovereignty Protection Act given the role of the Sovereignty Protection Office as an instrument against civil society and media and potentially to be vested with further powers under the new bill.
"Hungary is being dragged deeper into authoritarianism by a government that has shown blatant disregard for the fundamental values of the European Union." Williamson said. "The EU Council has to stop stalling on article 7 and take robust action on Hungary before it is too late."
