PRESS RELEASE: European Commission adopts problematic foreign funding directive, ignoring civil society warnings

12 December 2023 | Defence of Democracy, Press

Despite widespread concerns expressed by the European Civic Forum and hundreds of civil society organisations (CSOs) in consultations, meetings and letters, the European Commission has proposed a foreign funding directive as part of its Defence of Democracy package.

The directive will create a register of entities that carry out “interest representation services” or activities on behalf of third countries to influence the “development, formulation or implementation of policy or legislation or public decision-making” in the internal market.

While the European Civic Forum shares the Commission’s concerns about any malign interference and disinformation, this foreign funding directive will be deeply harmful to democracy and will fail in its stated intention of exposing covert foreign interference in policymaking. This directive is likely to weaken the key role civic actors should play in vibrant and healthy democracies, in upholding the rule of law and defending fundamental rights, including from malign interference.

By linking covert foreign interference with all funding from third countries, the directive will likely result in the stigmatisation of CSOs who receive foreign funding. Additionally, the broad wording used in the directive covers any organisation receiving funding from third countries if they carry out an activity which “will influence the development, formulation or implementation of policy or legislation or public decision-making”. That means, for example, that funding from USAID, which is a lifeline for civic groups protecting the rule of law and democracy in Eastern Europe, will be covered by this directive.

Commenting on the announcement, Alexandrina Najmowicz, Secretary General of the European Civic Forum, said:

“Despite widespread calls to change track, the EU has decided to press ahead with a directive that will have serious negative consequences for democratic civil society in Europe and beyond.

By treating organisations with suspicion just because they receive funding that is “foreign”, the EU is setting a precedent that will be welcomed by authoritarian leaders around the world.”

The European Commission has dismissed the concerns of civil society, explaining that the stated intent of the legislation is to increase transparency. However, there are several examples of EU legislation that have failed to consider the impact on civil society, resulting in negative consequences. This includes the EU Anti-Money laundering directive, which has resulted in some CSOs being considered as “high risk“ for money laundering.

Another concern is that the directive will damage Europe’s role in protecting civil society and democracy in the world, as it mirrors foreign agent laws that the EU has actively opposed elsewhere.

There are also several documented examples of governments using the pretext of transparency and targeting so-called foreign influence to stifle civil society. Just last month, the Hungarian government proposed the “Regime Defence law” which could arbitrarily target any organisation or person it suspects of serving foreign interests and allegedly jeopardising Hungary’s sovereignty.

This is not the first time that this government has introduced legislation under the guise of foreign influence. The Lex-NGO law, introduced in 2017, was found to be in breach of EU law by the European Court of Justice (ECJ) as it placed “discriminatory, unjustified and unnecessary restrictions on foreign donations to civil society organisations, in breach of its obligations under Article 63 TFEU and Articles 7, 8 and 12 of the Charter of Fundamental Rights of the European Union.”

While the package includes a very welcome recommendation on civic engagement, the potential positive impacts of this are likely to be overshadowed by the foreign funding directive.

The recommendation encourages member states to take measures to protect, support and empower civil society to ensure thriving civic space. Importantly, it recommends that member states take measures to establish structured dialogue with civil society organisations within the policy making process, as is promised in Article 11 of the Treaty on European Union (TEU).

“The recommendation on civic engagement provides one silver lining in this problematic package. We hope this is a first step towards a comprehensive European Civil Society Strategy and a framework for structured civil dialogue, as promised in the Lisbon Treaty,” said Aarti Narsee, Senior Policy and Advocacy Officer, European Civic Forum.


About the ECF:

European Civic Forum (ECF) is a pan-European network of more than 100 associations and NGOs across 29 European countries. Founded in 2005 by our member organisations, we have spent nearly two decades working to protect civic spaceenable civic participation and build civil dialogue for more equalitysolidarity and democracy in Europe.

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Aarti Narsee, Senior Policy and Advocacy Officer: