Today, the European Commission is referring Hungary to the Court of Justice of the EU for its law on foreign-funded NGOs. This is the third step in the infringement procedure. It follows the letter of formal notice sent by the Commission on 14 July and the reasoned opinion issued on 4 October this year. The Commission has decided to start legal proceedings against Hungary for failing to fulfil its obligations under the Treaty provisions on the free movement of capital, due to provisions in the NGO Law which indirectly discriminate and disproportionately restrict donations from abroad to civil society organisations. These provisions, which apply by reference to the foreign source of the capital, place a number of administrative formalities and burdens on the recipient of capital and are liable to have a stigmatising effect on both recipients and donors. Thus, they may dissuade people from making donations from abroad to civil society organisations in Hungary. The free movement of capital is one of the four fundamental freedoms of the European Single Market.
