LexNGO2021 – A look into Hungary’s LexNGO2021 on its first anniversary

On 18 June 2020, the Court of Justice of the European Union declared that Act LXXVI of 2017 on the Transparency of Organisations Supported from Abroad (“LexNGO 2017”), which stigmatised certain civil society organisations (CSOs) as “foreign-funded organisations”, violated EU law. However, for over 10 months, the governing majority failed to comply with the judgment, and repealed the LexNGO2017 only in May 2021, as of 1 July 2021.

However, at the same time, the Parliament’s governing majority adopted Act XLIX of 2021 on the Transparency of Organisations Carrying out Activities Capable of Influencing Public Life (“LexNGO 2021”), which entered into force on 1 July 2021. No public consultation or direct consultation with CSOs preceded the adoption of the new law.

The LexNGO 2021 and accompanying amendments made CSOs operating as an association or a foundation whose annual balance sheet total in a given year amounts to at least 20 million HUF (cca. 52,000 EUR) subject to inspection/audit by the State Audit Office (with certain exceptions). The State Audit Office shall audit these CSOs from the aspect of lawfulness, and shall disclose its conclusions in a public report, the content of which cannot be challenged before the court. The new rules

1. violate affected CSOs’ freedom of association and freedom of expression,
2. unduly discriminate against CSOs falling under their scope, and
3. violate the constitutional provisions pertaining to the mandate of the State Audit Office, given that under the Fundamental Law the State Audit Office is mandated to audit the administration and use of public finances.

For more information, see our information note about the LexNGO 2021:

LexNGO 2021 – a look into Hungary’s second anti-NGO law on its first anniversary

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In December 2021, eight affected civil society organisations (including the HHC) submitted a constitutional complaint against the new provisions to the Constitutional Court. As of 12 May 2022, this complaint is pending

On 17 May 2022, the day before the first anniversary of the adoption of the LexNGO 2021 by the Parliament, the State Audit Office began checks on dozens of NGOs, asking for our accounting and cash management policies.