In the first stage of this procedure, the Brussels Budapest sent a formal letter with questions about innovations and looks forward to clarification within one month. If necessary, the Commission may apply to the court of the European Union.

The new Hungarian law requires the establishment of a register of NGOs that receive annual funding from abroad in the amount of 24 thousand euros. In addition, in all of its publications, these NGOs will need to specify that they are "organizations with foreign support", and they are required to provide reports on its activities to the local authorities.

The Commission after examining the law has concluded that it violates the right to freedom of Association, creates unfair restrictions on the free movement of capital, and compromises the right to protection of privacy and personal data.

Controversial higher education law

In addition, the Commission moved to the second stage of the penalty procedure against Budapest because of the higher education act, under which foreign universities in addition to branches in Hungary, must have an office in the country of accreditation. Thus, Central European University (CEU), founded by American philanthropist George Soros, is illegal because it has the status of a foreign private University accredited in the United States, despite the fact that its only office is located in Budapest.

The European Commission has sent questions to the Budapest in this regard on 27 April and received a reply on 25 may. The Brussels has not changed its position, according to which Hungarian legislation violated several European laws. EC waits for a new response from Budapest during the month.