The European Union launched legal action against Hungary on Thursday because of new rules governing civic groups that receive funds from abroad.
The European Commission said that the law approved by Hungary's parliament in June could prevent nongovernmental organizations "from raising funds and would restrict their ability to carry out their work."
The commission also took a new step in another infringement procedure against Hungary launched in April over amendments to the law on higher education that could force Budapest-based Central European University to close or leave Hungary.
The commission said its conclusions about the higher education law did not change after Hungary's initial response and it still considers the law to be incompatible with EU standards such as academic freedom and the right to education.
Both cases are part of the Hungarian government's multifaceted campaign against Hungarian-American billionaire George Soros. He founded CEU in 1991 and his Open Society Foundations help support many of the groups affected by the NGO law. His ideal of an "open society" contrasts with Prime Minister Viktor Orban's expressed desire to turn Hungary into an "illiberal state."
The Hungarian government reiterated its position regarding the "Soros network" in its response to the commission's legal action.
"The government is ready to face infringement proceedings with relation to the NGO Act," said Justice Ministry State Secretary Pal Volner. "These are organizations that want to weaken Hungary's defense capabilities in the fight against illegal immigration."
Civic groups getting more than about $26,700 from abroad have to register with the courts, reveal detailed information about donors giving more than $1,850 and identify themselves as being foreign-funded on their websites and media publications.
The commission, the EU's executive body, also raised concerns about the NGO law regarding the free movement of capital and the protection of the personal data of donors.
"Civil society is the very fabric of our democratic societies and therefore should not be unduly restricted in its work," EU Commission Vice President Frans Timmermans said. "We have studied the new law on NGOs carefully and have come to the conclusion that it does not comply with EU law."
Hungary's government says it wants to ensure transparency among the NGOs, some of which say they won't comply with the regulations they believe are discriminatory. The government says foreign-funded NGOs that advocate for asylum seekers, like the Hungarian Helsinki Committee, are opposed to Hungary's interests.
Orban is a staunch opponent of migration and says a large influx of Muslim migrants would irrevocably change Europe's ethnic and cultural character.
In the CEU case, Orban and other officials said for months that the amendments were a purely educational matter. However, Orban's chief of staff revealed recently that the conflict was tied to Soros' advocacy for migration and refugees.
'We, CEU and Fidesz [the ruling party], peacefully coexisted side by side in the past years. The changes came about when George Soros announced a program about having to open Europe's borders and call in a million immigrants a year," Janos Lazar, Orban's chief of staff, said last week.
The government is also carrying out an anti-Soros media campaign, with billboards, posters and TV ads depicting a smiling Soros and the caption "Let's not allow Soros to have the last laugh!"
Hungarian Jewish groups have raised concerns about what they see as the campaign's anti-Semitic overtones.
Hungary has one month to reply to the commission's arguments, and both cases could be eventually referred by the commission to the EU Court of Justice.