The Central European University, founded by Hungarian-born philanthropist George Soros, suspended programmes for asylum seekers with immediate effect on August 28, becoming the first casualty of the Hungarian government’s controversial immigration levy.

The CEU on Tuesday announced the suspension of its Open Learning Initiative (OLIve), and the administration of its European Union-funded Marie Curie Research Grant on migration policy in Central and Southern Europe. The OLIve programme was open only to refugees and asylum seekers legally residing in Hungary and this year 55 would have started the course.

Hungarian lawmakers in July approved a 25% duty to be levied on funds received from abroad by organisations deemed to be supporting what the government terms “illegal migration”.

The law defines pro-immigration activities as media campaigns and seminars, building and operating networks, and propaganda activity presenting immigration in a positive light.

The European Commission has launched an infringement procedure against Hungary over the legislation, and the same time the EC referred the country to the Court of Justice of the European Union (CJEU) for non-compliance of its asylum legislation with EU law.

The Commission concluded that Hungary is "failing to fulfill its obligations under the EU Treaties, EU laws and the Charter of Fundamental Rights of the European Union."

“The CEU has been forced to take this action in response to Hungarian legislation in respect of refugees and immigration which came into effect on August 24," the university administration said in a statement on Tuesday.

"CEU’s action follows advice from our tax advisers in respect of potential liability for a 25% levy on our immigration-related programmes," it added. 

The fate of the university remains uncertain as parliament has yet to ratify an agreement signed by the university that would allow its future operation in Budapest.

Hungary tightened rules governing the operations of foreign universities in the country requiring them to operate on the basis of an interstate agreement and to run a campus in the country in which they are based. The CEU has met these criteria and awaits the ratification of the agreement.

The European Commission has also launched infringement procedures against the amended higher education law last year, which was widely perceived as specifically targeting the CEU, founded by US-Hungarian financier Soros, who also funds various liberal NGOs in Hungary.

The government has vilified the 88-year-old Jewish philanthropist, claiming his network of NGOs is working to flood Europe with illegal migrants. 

The controversial tax follows the footsteps of the “Stop Soros” legislation, which criminalises support for illegal immigration, punishable by imprisonment for up to 90 days. In the case of repeated offence and financing of illegal immigration it could lead to imprisonment of one year.

The crackdown on liberal NGO's fits into the vision of Prime Minister Viktor Orban, who has openly declared plans to establish an illiberal state in Hungary.