Address by Mr. László Trócsányi Minister of Justice of Hungary before the European Commission for Democracy through Law, Venice Commission of the Council of Europe,111th plenary session. Venice, 16 June 2017

Honourable members of the Commission,


And I would have liked to say « dear colleagues » as from 2005 until 2013 I served this Commission as a substitute member. Therefore, I am well-placed to appreciate the value and the quality of its work! Your legal work became a primary and key reference on the European continent. An advisory body like the Venice Commission is all the more crucial as the challenges that are caused by our “living together” are numerous and more and more complex.

However as you have noticed during your study of the legislative proposal, this is a sensitive and even a taboo subject with fuzzy, indirect, obscure and at the very least distant repercussions. We all know that. There are a multitude of organisations that vary in size and advocate for a wide range of causes. Hungarian civil society is flourishing…  In Hungary there are more than 60 000 NGOs. Amongst these organizations we can distinguish, on the one hand, entities that are purely local and, on the other hand, those who constitute a local branch of transnational organisations whose activities go far beyond the State borders. Whereas the first type pursue local goals and often dispose only of national financial resources, the second type receive for the most part substantial foreign subsidies in order to empower themselves to play a decisive role in the public arena. Working together through a network and being present in strategic decision-making centres, these transnational NGOs have been involved for decades in the transformation of the classical geometries of power. Their activities contribute to the emergence of new forms of legitimacy and exercise of power and turn upside down the very basis of the classic constitutional law, representing real challenges for the 21st century. Players of the participatory democracy fulfil essential tasks of informing, training, protecting and defending the citizens. They participate in the development, the implementation and the evaluation of public policies. In order to facilitate the exercise of the right of association, our country amended in December 2016 the law on NGOs, especially the rules on their registration. Hence, the judge only carries out a formal and not substantive control.

The organisations have thus a set of tools in order to exert a real impact on the majoritarian democracy by influencing, disturbing it and even calling it into question. As Bertrand Mathieu, Professor at the Sorbonne Law School and Vice President of the International Association of Constitutional Law rightly points out, this new form of legitimacy, imposing itself on the sovereign people and the power emanating from it, is more oligarchic than democratic since NGOs do not stem from the will of the people or from the expression of the majority. I would like to warmly recommend you his work “Constitution: rien ne bouge et tout change” in which he puts into perspective the various changes in constitutional law that reflect the evolutions of the political and the civil society. The people and forces controlling certain organisations are not always clear. Rumours are increasingly being spread in the press to denounce the pressure and intimidation exercised through non-State organisations on the democratically elected political actors by powerful foreign influences, for example in the United States or in France.

The issue of the organisational responsibility becomes pressing as organisations might affect major political, economic and security interests of a State or constitute an important link in the emergence of phenomena such as money laundering and terrorism. With globalisation, financial flows and capital movements have diversified and far exceed national borders, mostly escaping State control. Equipped with rights to perform their fundamental tasks in society, NGOs also have, alongside their prerogatives, obligations towards the society.

However, no international and national legislative instrument addresses the issue of NGO funding directly. Beyond the enshrinement of the freedoms of association and expression, no mention is made in the main international treaties or the national constitutions. Only some soft law documents consider non-governmental organisations in a more detailed way. To date, there is no case law on this topic. In Europe, a critical reflection is taking currently place on this subject. In 2016, the Secretary General of the Council of Europe requested the Venice Commission to carry out an analysis of the legal standards about the financing of NGOs in force in the Member States of the Council of Europe. This analysis is still on-going, as I understand. It will be a key element for European lawyers.

Furthermore, last March the European Parliament proposed a motion for a Resolution on the budgetary control of financing NGOs from the EU budget asking for more transparency and financial responsibility.

It is indeed fair to demand accountability from all actors in power, whether State or non-State actors. It was in this international and European context that the legislative proposal examined by you has been drafted. As the first country in the European Union to take this path, Hungary appreciated your encouragement and recommendations. In view of the absence of legal references in the field and the sensitivity of the subject, the Hungarian government, on its own initiative, contacted Mr. Jagland, Secretary General of the Council of Europe. Members of my team and I spoke to experts from the Council of Europe. For its part, the Parliamentary Assembly requested the Venice Commission to evaluate the legislative proposal. Through these two communication channels, Hungary has been open and cooperative throughout the discussions. The Ministry of Justice reviewed all the relevant documents of the Venice Commission and drew the attention of the deputies to the legal challenges.

Because of the legal vacuum and the absence of European constitutional heritage on the issue, the responsibility and the importance of your expertise are all the more significant. As you have not failed to point out in your opinion, it is necessary and legitimate to adopt such a law that requires NGOs to be more financially transparent.

And I would like to take the opportunity here to thank you for your efforts to analyse this legislative proposal while trying to understand the national context. Your review has prompted us to broaden our framework of consideration and horizons of reflection. The opinion has in fact contributed to the parliamentary debates and led to the adoption of a more balanced law. We have received your opinion on 2 June and the parliamentary debates and the vote on the law were postponed so that we could take your recommendations into consideration.


Please let me now address you these words as Minister of Justice and Professor of Law and focus on the legal dimensions of your study. The latter precisely distinguishes the rather political aspects from the proper legal analysis. As legal experts, we will all agree that our entire attention must be dedicated to legal issues and not to the political context that is fluctuating and inconstant. Does the Commission's Statute not state in its first Article that its field of action is that of “the guarantees offered by law in the service of democracy” and that one of its objectives is to “promote the rule of law”? To dwell on the context, we would miss our fundamental mandate of studying the essence of the subject that interests us here, that is, the limits and conditions of a governmental control over foreign funding of non-governmental organisations.

I shall try to answer briefly each of your legal recommendations and to clarify the final version proposed by the Hungarian Parliament and adopted last Tuesday, 13 June. The final text takes into account, as far as possible, your remarks and observations.

First of all, let me emphasize that there has been in Hungary a public debate for months on the draft law. In early February, the head of the parliamentary group of FIDESZ, Lajos Kósa, announced in a press conference the intention of the parliament to amend the Law on NGOs with a view to ensuring greater transparency. A week later, I presented to the parliamentary group the results of the legal comparative analysis on the transparency of NGOs. At the end of February, I was in Brussels to take part in a meeting of the LIBE Committee during which we discussed this subject with several NGOs. On 7 April 2017, the parliamentary group submitted its legislative proposal. The Ministry of Justice and its Secretary of State invited the main NGOs concerned by the law. These and other organisations submitted their comments which were incorporated into the legislative text. We believe that this criticism concerning the public consultation can only be considered as secondary, since a public and open debate has been held for several months.

Secondly, I would like to remind you that as regards the scope of the law, specific laws are already in force concerning sport and religious organisations: Law 1/2004 on Sports and Law 206/2011 on Freedom of Conscience and Religion and Churches. If the law were to apply to the former, it would be tantamount to discriminating between sport or religious organisations and other types of sports groupings and churches which had not taken the form of an organisation. Moreover, religious organisations are subject to another fundamental freedom, namely the freedom of conscience and religion, and are therefore subject to a special regime. In the light of national particularities, the parliament finally excluded from the scope of the law the organisations of national minorities recognised in the constitution.

We have also made the necessary amendment in the legislative text and reduced to one year the period during which a civil society organisation should not receive foreign funding of more than HUF 7.2 million in order to initiate the procedure of unsubscribing. This change, which you have suggested, makes indeed the registration and deregistration procedures more consistent.

On the other hand, we have also modified the existing obligation in the proposal to record any foreign funding, no matter how small. As recommended by the Venice Commission, only the data of the most important sponsors should be recorded individually. According to the amended version of the law, the most important sponsors are those who have provided at least the sum of 500 000 HUF, that is more or less 1600 euros.

Moreover, regarding the obligation to mention in their press products and publications that the organisations receive foreign support (more than HUF 7.2 million), we do not consider it to constitute stigmatisation that could negatively affect the activities of the concerned organisations. As with projects funded by EU funds, we sincerely believe that this is more of an asset or positive publicity. This compulsory mention does not in fact have a negative connotation and therefore cannot constitute a threat to freedom of association, as it was the case in the Russian case and the Federal Act on Foreign Agents (see Opinion on Federal Law no. 121-FZ  on non-commercial organisations ("Law on Foreign Agents"), on Federal Laws no. 18-FZ and no. 147-FZ and Federal Law no. 190-FZ on making amendments to the criminal code ("Law on Treason") of the Russian Federation adopted by the Venice Commission at its 99th plenary session, Venice, 13 and 14 June 2014, paragraphs 54 to 65). On the contrary, this reference is neutral and contains only factual communication, the fact that the organisation receives foreign funding worth more than HUF 7.2 million. It does not specify where the money comes from or the exact amount received. This obligation only serves the purpose of transparency and does not go beyond that objective. As recommended by Principle 7 of the 2014 Joint Guidelines of the Venice Commission's and the OSCE on Freedom of association [laying down the freedom to seek, receive and use resources], this mandatory reference is not an excessive burden and would therefore not be liable to paralyze or interfere with the activities of organisations, including those working in the field of human rights, democracy and the rule of law. (See Opinion on federal law no. 129-FZ on amending certain legislative acts (“Federal law on undesirable activities of foreign and international non-governmental organisations”) adopted by the Venice Commission at its 107th Plenary Session, Venice, 10-11 June 2016, point 14)

Finally, as regards the sanctions imposed on organisations that do not comply with the obligation to register, the latest version of the law makes the principle of proportionality, as advised by your expertise, more visible by explicitly mentioning it. Thus, the law simply refers to the system of general rules of sanctions in force for associations.

We all agree that this is a difficult but urgent legal topic to be regulated. Notwithstanding the legal vacuum on the financing of non-governmental organizations, the Hungarian legislature has decided to take up this challenge by building on your expertise. It wanted to respond to this challenge because the interests of our citizens are at stake! Europe lives a complex time with pressures and influences coming from everywhere. And this phenomenon is first and foremost positive! Problems arise when these uncontrolled influences affect our most cherished interests and our survival, not only as a State, but also and above all as human beings with dignity and free to orientate their destinies. Uncontrolled financial flows constitute one of the greatest dangers and current challenges. Standards are adopted one after the other by the European institutions to regulate and control the financial framework of independent professions, companies... All the professional occupations are scrutinised...

This development of European law, which reflects enhanced transparency requirements, is based on the democratic correlation between power and knowledge, on the idea that citizens have the right to know under what conditions power is exercised. In the same way as they have the right to know from public authorities the conditions of the exercise of institutional power, citizens are entitled to receive from civil organisations information on the circumstances of the exercise of non-institutional power, the so-called counter-power.

First EU Member State to legislate on this important issue, others will probably follow our example in the near future. Other European governments have already expressed this wish. We warmly welcome the preparation of the report of the Venice Commission on the financing of NGOs. We would be pleased to be able to contribute to this analysis and to guide other States wishing to take this path.

Thank you!

(Ministry of Justice)