The Venice Commission said the Hungarian legislation on defence of national sovereignty violated international standards and needed to be amended to provide for "certain exceptions" and "more precise definitions".

The advisory body to the Council of Europe scrutinised the provisions of the law prohibiting foreign funding in election campaigns and establishing the Sovereignty Protection Office in late 2023.

It acknowledged that the prohibition of foreign funding in election campaigns was in line with international best practices "in principle", but said provisions in the legislation extended "beyond electoral campaigns to cover political activity in a broader sense and campaigns for social change".

The reason and need for such a broad approach "have not been substantiated by the Hungarian authorities", according to the opinion.

Last month, the European Commission launched an infringement procedure over the legislation approved in late 2023, saying it violates many EU laws and infringes several fundamental rights enshrined in the EU Charter of Fundamental Rights, such as the right to respect for private and family life, the right to protection of personal data, the freedom of expression and information, the freedom of association, the electoral rights of EU citizens, the right to an effective remedy and a fair trial, the privilege against self-incrimination and the legal professional privilege; the requirements of EU law relating to data protection and several rules applicable to the internal market.

The law criminalises receiving foreign funding for political purposes, which some fear could stifle political opposition and cut off their funding.

Hungary’s opposition received foreign funding, primarily in micro donations from US-based NGO Action for Democracy (AD) during the 2022 election campaign. The money was transferred to the Hungary Belongs to Everybody (MMM) movement, set up by Peter Marki-Zay, the joint prime minister candidate of the opposition in the last election.

As the financing did not directly go to political parties, the foreign financing per se was in line with the legal regulations of the time. Yet, the State Audit Office (ASZ), led by a former Fidesz MP, levied a combined HUF520mn (€1.34mn) fine on half a dozen parties less than four months before the EP and local government election.

The Sovereignty Protection Office commenced operations in February 2024. Critics contend that the legislation confers extensive powers upon the office to investigate both individuals and organisations, with minimal oversight. This lack of oversight raises concerns regarding the potential suppression of dissent and freedom of speech.

Tamas Lanczi, the head of the office and a loyal ally of Viktor Orban, attempted to downplay criticisms in his initial interviews. He stated that his office would primarily undertake analytic and fact-finding tasks and would refrain from initiating probes or imposing sanctions.

Lanczi emphasised that the office would collaborate with other agencies, aiming to make any potential violations public and report them to the relevant state authorities. Additionally, he mentioned that the office could draw the attention of lawmakers to any legal deficiencies or the necessity for regulatory action.

In a recent interview, he suggested that it would be timely to reassess the criminal offense of treason. He proposed discussing the relevant legal passages with Hungarian courts to ascertain their interpretation. Lanczi hinted that this could be used against opposition parties, who in his view campaigned to block EU funds to Hungary, frozen because of corruption and the demise of rule of law.