EC advances infringement procedure over Hungary's Sovereignty Defence Act

EC advances infringement procedure over Hungary's Sovereignty Defence Act
Tamas Lanczi was appointed to head the Sovereignty Defence Office. / bne IntelliNews
By Tamas Csonka in Budapest May 24, 2024

The European Commission stepped up an infringement procedure against Hungary over legislation on the defence of national sovereignty, sending a "reasoned opinion" on the matter on May 23 as a reply by Budapest did not alleviate its concerns.

The EC launched the infringement procedure by sending a letter of formal notice in February, just three months after the approval of the legislation.

Hungarian lawmakers approved the controversial act designed to protect national sovereignty and interests from external threats in late December. It gives the government new powers to investigate and prosecute activities deemed to be against Hungary's interests, but critics said it aims to intimidate and silence critics of the government.

The law established a Sovereignty Defence Office, tasked with preparing an annual report scrutinising the activities of organisations that could use foreign funding to influence the outcome of elections. It introduced criminal sanctions for people found guilty of taking or concealing prohibited foreign campaign financing.

The acceptance of foreign funds for political purposes, or the attempt to conceal them, would be punishable by up to three years in prison.

Fidesz's aim with the legislation was to cut off opposition from foreign financing sources, be it micro-donations from private individuals or in the form of larger sums from foreign donors ahead of the 2024 local government and EP elections. The ruling nationalist party had planned to use the issue of national sovereignty as its main campaign theme, but the political landscape changed dramatically after the Fidesz paedophile scandal in February.

After the resignation of the president and the justice minister Peter Magyar, the former husband of Judit Varga emerged and in just three months he has emerged as the leading force of the opposition. The ruling party is campaigning with a Stop War slogan, accusing its opponents in Hungary and Europe of a pro-war stance for supporting Ukraine’s bid to defend itself against Russian aggression.

Hungary now has two months to respond and take the necessary measures. Otherwise, the Commission may decide to refer the case to the Court of Justice of the European Union.