NGOs cry foul after Commission proposes new law for interest groups

The European Commission has unveiled a new law designed to force interest and lobbying groups working for non-EU actors to register on a transparency register as part of its plans to protect against malign influence in EU politics.

The draft directive on foreign interest groups was tabled as part of the Defence of Democracy Package announced by the European Commission on Tuesday (12 December).

It will require entities carrying out interest representation activities on behalf of a third country to register in a transparency register. The payments they receive and the activities carried out on behalf of the client would also have to be disclosed. The registers would be publicly accessible.

Presenting the bill to journalists on Tuesday, Vice President of the European Commission for Values and Transparency Věra Jourová insisted that the bill “is not a foreign agent law” but is designed to protect European democracy by imposing transparency obligations on funds or links to third countries on organisations that seek to impact public opinion and politics.

“It is answering a growing concern that the openness of our societies can be exploited,” said a Commission official, who added that the proposed law “does not have the objective to restrict free speech or freedom of opinion.”

However, the proposal was immediately criticised by civil society groups.

The proposal “will not bring the level of transparency needed to counter malign influence in EU democracies. In focusing only on interest representatives who receive certain types of foreign funding, this directive will not capture internal threats of undue influence, allow for easier circumvention by malign actors, and yield very limited data,” said Transparency International EU on Tuesday.

“What we are doing is introducing a set of transparency rules,” said Jourová. We are not in the criminal justice field, as is the case of similar laws in the USA and Australia.

There will be no criminal sanctions for non-compliance, with fines of up to 1% of the entity’s annual turnover or €1000 in the case of individuals.

The bill had initially been planned for the second quarter of 2023, but criticism from civil society groups pushed the Commission to conduct a lengthy impact assessment. However, the delays mean there is now only a three-month window for lawmakers in the European Parliament and EU Council of Ministers to debate, amend, and approve the new law.

“Today’s proposal will not only be ineffective, but it will also be dangerous. The Commission has rightly criticised these laws in the past, not least in Georgia and Hungary. Its new proposal now puts this international position at risk,” said Vitor Teixeira, Senior Policy Officer at Transparency International EU, in a statement.

That is a reference to similar legislation on foreign funding of NGOs in Hungary, which society and academics say have been used by Viktor Orban’s Fidesz government to crack down on NGOs that promote democratic and academic freedom and groups promoting LGBTQ+ rights.

“If the Commission really wanted to protect democracy, it would cast the net wide and raise transparency standards for all interest representatives—foreign-funded or not—rather than proposing a misguided foreign agent law that may well cause more problems than provide solutions,” he added.

“This is to make sure that it [foreign lobbying] is transparent, not to limit it. It is known, something that is known on behalf of a government,” explained the Commission official.

However, the EU executive has played down the suggestion that the proposed regime would have prevented the Qatargate ‘cash for influence’ scandal, which saw a handful of MEPs and European Parliament officials arrested and over €1.5 million in cash seized for allegedly helping the whitewash the human rights records of Qatar, Morocco and Mauritania.

Commission officials also played down the prospect of EU governments being able to use the new law to stigmatise particular groups.