The United States on Wednesday said it was "troubled" by the Hungarian parliament's passage of legislation that it said unfairly burdened a targeted group of Hungarian civil society organizations.
Hungary's ruling Fidesz party on Tuesday passed a bill that tightened regulations on foreign-funded non-governmental organizations, requiring them to register with authorities and publicly declare their foreign-funded status.
"Many of [the NGOs] focus on fighting corruption and protecting human rights and civil liberties," the U.S. embassy in Budapest said in a statement.
"This new law, particularly in the context of government rhetoric portraying civil society organizations receiving foreign funding as acting against the interests of society ... will have a chilling effect on the ability of Hungarians to organize themselves and address their concerns to the government in a democratic manner."
The new law comes amid a general crackdown on dissent and heightened verbal attacks by the government of Prime Minister Viktor Orban on NGOs, especially those funded by billionaire financier George Soros, an American with Hungarian roots.
Orban, who has locked horns with Western partners over several issues including the freedom of education, the press and the courts said the NGOs served foreign interests.
Orban faces elections in 2018.
Several NGOs declared a boycott of the law and said they would take the matter to international courts.
The Hungarian government has said the main issue was the NGOs' work around the recent massive wave of immigration into Europe, something Orban said these organizations encouraged.
Migration was, however, far from the only focus of these organizations, which have helped expose corruption and represented journalists amid Orban's increasingly oppressive handling of the media.
"If signed into law, this legislation will constitute a step backward from the principles of freedom of association and expression embodied in NATO, the EU, and [the Organization for Security and Cooperation in Europe], and from our shared commitments to supporting civil society," the embassy statement said.
European liberals and Hungarian opposition politicians have also criticized the law as undermining freedoms Hungary has secured since the fall of Communism in 1989.
Green-Liberal European Parliament member Benedek Javor called on President Janos Ader not to sign the bill into law.
"The president must know, as he has lived in a liberal democracy before, how many ways this bill hits democratic norms, and what a slap in the face it is not only for the NGOs but the citizens that they represent," Javor said.