The commission acknowledged that the bill before parliament could be useful in the fight against money laundering and the financing of terrorism.

The commission said the bill “wisely” refrains from labelling foreign-funded NGOs as “foreign agents”. It added, however, that the mounting of a “virulent campaign by some state authorities” against foreign-funded NGOs may raise concern that certain provisions in the bill may leave the door open for discrimination.

In the document, the Venice Commission advises Hungarian authorities to consult civil groups about the contents of the bill before it is passed into law.

The commission, however, welcomed that under the bill, sanctions on NGOs that fail to disclose the source of funding they receive from abroad would be imposed in a gradual process.

The opinion added, at the same time, that any sanctions imposed must be in line with the principle of proportionality and should only be imposed in the cases of the most serious breaches of obligations.

The Venice Commission established that the three-year period NGOs are required to go without foreign funding in order to qualify for deregistration as foreign-backed groups was too long and “appears to be arbitrary”. It recommended that the duration should be reduced to one year. Under the bill, the requirement to register as a foreignbacked group would apply to NGOs receiving more than 7.2 million forints (EUR 23,400) a year from foreign donors.

The commission also considers the obligation by NGOs to declare that they receive funding from abroad on all their press products and publications excessive. It also noted that the bill does not apply to sports or religious organisations or groups that do not qualify as NGOs, such as political parties.

Earlier this week, the ruling Fidesz party’s parliamentary leader said parliament would vote on the bill on June 12. Lajos Kósa, the leader of ruling Fidesz, said the commission’s recommendations were worth weighing.

Republished with permission of Hungary Matters, MTI’s daily newsletter.