Law establishing Sovereignty Protection Office violates EU law-Advocate General at CJEU issues opinion

According to the Advocate General at the Court of Justice of the European Union, the Hungarian law establishing the Sovereignty Protection Office violates EU law. The opinion issued on Thursday is not the final ruling, but such opinions usually indicate the expected outcome. During the announcement, more than a dozen points of EU legislation were listed that the Advocate General believes the Hungarian law violates.

Shortly after the Hungarian Parliament passed the legislation in 2023, the Sovereignty Protection Office was established. This office can essentially investigate anyone or anything it believes poses a threat to Hungary's sovereignty.

A few months later, the European Commission launched infringement proceedings because it believed that the Hungarian law violated several primary and secondary EU laws, including the EU's democratic values and the Charter of Fundamental Rights. After the usual two rounds of correspondence failed to resolve the issue, the EU's quasi-government filed a lawsuit against the Hungarian state in October 2024.

The European Commission requested the EU court to rule that by adopting the law, the Hungarian state had failed to fulfil its obligations under EU law.

A bill signed by numerous Fidesz representatives last year would have further broadened the powers of the Sovereignty Protection Office. For now, the bill has been put on hold, but it did succeed in more people than ever offering their financial support to independent media by donating one percent of their personal income tax.

According to Thursday's press release, Advocate General Juliane Kokott recommended that the Hungarian state be found to have failed to fulfill its obligations under EU law in several respects by adopting the law on the protection of national sovereignty. The Hungarian government's objection regarding lack of jurisdiction should be rejected because the law could affect the application of EU law. The Advocate General found indirect discrimination in the Office's investigative and publication powers and in its obligations to cooperate.

“Measures to prevent, inter alia, interest representation activities, activities intended to influence domestic democratic discourse and processes in the interest of other States and foreign actors, and information manipulation and disinformation coming from those States or actors, should be recognised as legitimate. The powers conferred on the Office are, nevertheless, in part, not proportionate to the legitimate aim of protecting domestic democratic discourse and processes.”

According to the Advocate General, the legislation violates two of the four fundamental principles of the EU single market, namely freedom of movement and freedom of capital. "The threat of an investigation and of its findings being published in accusatory or stigmatising reports, and the risk of criminal proceedings, have a chilling effect and may lead to self-censorship by journalists and/or publishers and press organisations. The duty to cooperate in identifying anonymous sources also has a chilling effect. The law also interferes with the freedom of expression and information enshrined in the EU Charter of Fundamental Rights, based on the opinion. For organisations and associations, those measures make their activities, their financing and the achievement of their objectives more difficult, which constitutes an interference with the freedom of association.

The Advocate General also found the legislation to be contrary to the EU Data Protection Regulation because it empowers the Sovereignty Protection Office to process personal data without imposing proportionate, sufficiently clear, and precise restrictions in relation to the public interest objectives to be achieved.

The opinion of the Advocate General is not equivalent to a judgment, but it usually indicates the outcome in advance. If the Hungarian state is found at fault and does not change its position, the European Commission may initiate further proceedings to impose a penalty. The Hungarian state will either pay this penalty or the amount will be deducted from the EU subsidies due to Hungary, together with interest.

The sovereignty protection law also came up during the hearing in the lawsuit filed by the European Parliament against the European Commission for having accepted the Hungarian judicial reform package in 2023. The Commission's decision deemed that certain conditions – which froze almost the entire €22 billion in catch-up subsidies and are also required for the regular payments of the €10.4 billion recovery fund to Hungary – have been met. The Advocate General's opinion on the EP lawsuit was also released on Thursday, recommending that the Commission's decision be overturned.