The legislation is viewed as a threat to political opponents, media and civil society.
The European Commission has launched legal action against Hungary for its recent enactment of laws on “protecting national sovereignty”.
The European Union executive said on Wednesday that it has sent a formal notice to Budapest informing it that the legislation violates the bloc’s democratic values and fundamental rights. Opponents of Prime Minster Viktor Orban’s authoritarian regime claim the new laws threaten to stifle his political rivals, as well as critical media and civil society.
The Commission has been at loggerheads with Orban for years over Hungary’s rule of law, and more recently over his efforts to block aid to Ukraine. It was widely expected to launch such an infringement procedure after the laws were passed by the Hungarian parliament, dominated by the ruling Fidesz party, in December.
The nationalist Orban insists that the legislation, which clamps down on the foreign funding of political candidates, as well as any body or individual with influence over public discourse, is vital to curb foreign influence.
Political candidates violating the rules on funding will face up to three years in prison.
The newly established Office for the Defence of Sovereignty, led by a government appointee, has the power to probe recipients of foreign funding. It can demand public and private information from targets, as well as Hungary’s intelligence services.
Critics warn that the laws, viewed as similar to draconian laws implemented by President Vladimir Putin in Russia, hand Orban the power to set the security services on opponents and critics.
The Commission said that the law violates a wide range of fundamental values, including the principle of democracy, the right to privacy, protection of personal data, freedom of expression, information and association, and the right to a fair trial, among others.
“The setup of a new authority with wide-ranging powers and a strict regime of monitoring, enforcement and sanctioning also risks to seriously harm democracy,” a Commission spokesperson said.
Hungary will have two months to respond. The letter of formal notice is the first step under the EU’s infringement procedure, which can lead to a lawsuit in the EU’s Court of Justice and potentially fines.
The United States has previously warned that the law offers the government “draconian tools that can be used to intimidate and punish those with views not shared by the ruling party”.
Analysts tell Al Jazeera that the EU will very likely force Orban to scrap the legislation eventually but warn that, in the meantime, it will have a chilling effect on the political opposition, independent media and civil society.