On Tuesday, the Hungarian parliament repealed the law on financing civil organizations that receive support from abroad, and amended the law on higher education. Last year, the European Union’s Court of Justice found it to be in conflict with European Union law.
The provision to repeal the Civil Organizations Funding Act was included in the amendment of the “Civil Organizations That Perform Activities That May Affect Public Life”. At the same time, the amendment provides that the State Audit Office (ASZ), in the manner specified in a separate law, is to publish annual reports on these associations and institutions with an annual balance sheet totaling 20 million HUF (more than 250 PLN (thousand)). These regulations do not apply to religious, sports, and national organizations.
In 2017, Hungary adopted a law whereby civil organizations are registered by national authorities as “organizations receiving foreign support” when the amount of donations received in a given year reaches a certain threshold. When registering, they also had to provide the names of donors whose support amounted to at least 500,000 PLN. Ft (approx 6.5 PLN) and the specified amount of support. Then this information was made public.
The European Commission has appealed these rulings to the European Union’s Court of Justice. In June 2020, CJEU ruled that the act violated European Union law. The judges found it discriminatory because it introduced discrimination in the treatment of domestic and cross-border movements of capital, which could not be explained by any substantive difference. The judges also considered, among other things, that disclosing to the public information about people from other member states or other states that provide financial support to these associations and foundations may discourage the provision of support.
Referring to the rules adopted on Tuesday, 19 organizations, including the Helsinki Committee, Amnesty International and Transparency International, have expressed concern that the ASZ reports do not cover sports organizations, although some receive significant public funding. It has also been indicated that the primary function of the ASZ is to oversee public funds.
In justifying the new regulations, Deputy Prime Minister Zsolt Semjen emphasized that the government’s goal is to create standards compatible with EU regulations. He also emphasized, among other things, that the scope of ASZ’s terms of reference is a guarantee of professionalism and impartiality.
An amendment to the Higher Education Act, which CJEU found inconsistent with European Union law
On Tuesday, the Hungarian parliament amended the Higher Education Law, which the European Union’s Court of Justice declared inconsistent with European Union law. The revised document takes Bavarian legislation as a basis and distinguishes between universities in the European Economic Area and those without such a seat.
The latter will henceforth be able to carry out educational activities leading to the award of a diploma in Hungary only if the teaching there is equivalent to that in Hungarian universities and the admission requirements are compatible with the practice in Hungary. In addition, an agreement must be concluded between the Hungarian government and the government of the country in which the university is located.
In April 2017, the Hungarian Parliament adopted the Law on Higher Education, according to which only those foreign universities that grant diplomas outside the European Union, whose activities are regulated by an inter-state agreement and which have an educational institution in their country of origin, can operate in Hungary. According to critics, the bill was mainly directed against the Central European University (CEU) founded by American financier George Soros, and which was only studying in Hungary at the time.
Due to the fact that the Hungarian government did not sign an agreed agreement with the state of New York, CEU moved from employment in September 2019 to its accredited studies in the USA, i.e. most of the courses, from Budapest to Vienna.
CJEU in 2020: Law formulates disproportionate terms
In October 2020, CJEU found the old statute inconsistent with European Union law. It ruled, inter alia, that the law applied “arbitrary discrimination” and formulated “disproportionate” conditions that would “restrict academic freedom”.
When the Hungarian government introduced the amendment to the Higher Education Act, CEU informed that it had not changed its status and thus the university would remain in Austria, where – as assessed – the fundamental values of academic freedom are respected.
During the discussion on the amendment, Deputy Minister of Innovation and Technology Tamas Chanda asserted that dozens of foreign universities or so operating in Hungary were complying with the regulations, and that “Soros University” had not abided by the regulations, but rather than trying to comply with the law, he preferred to launch an international campaign against the Hungarian regulations.
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