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Hungary's parliament passed a law in December which the ruling
right-wing Fidesz party said would prevent undue interference in
national politics by foreign persons or groups.
The new law set up an authority, the Sovereignty Protection
Office, to explore and monitor risks of political interference.
The law punishes banned foreign financing for parties or groups
running for election with up to three years in prison.
The Council of Europe panel, known as the Venice Commission,
said the Sovereignty Protection Office could not be considered
independent and this could lead to arbitrary and politically
motivated applications of the law.
"There is thus a high risk that the establishment and activities
of the Office will have a chilling effect on the free and
democratic debate in Hungary," it said in a statement.
It could "interfere with the privacy of any legal or natural
entity and engage in naming and shaming of this entity without
being subject to any control and without any review mechanism,"
the panel said.
The new law comes as nationalist Prime Minister Viktor Orban,
who has clashed repeatedly with the European Union over
democratic rights in Hungary, steps up his Fidesz party's
campaigning ahead of European Parliament elections in June.
Last month, the European Commission said Hungary's new
legislation violated EU laws on democracy and equal rights of EU
citizens, and that it would open an infringement procedure. U.S.
officials have also criticized the legislation.
In comments which could herald a further clampdown on
non-governmental organizations (NGOs) in Hungary, Tamas Lanczi,
the head of the new authority and a close ally of Orban, called
on Sunday for a tightening of legislation on donations to NGOs.
(Reporting by Anita Komuves; Editing by Gareth Jones)
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