The legislation, spearheaded by Viktor Orbán's ruling party and approved by the parliament in mid-December, empowers the state to investigate people and organisations suspected of undermining the country's sovereignty, with potential convictions of up to three years in prison.
The implementation of the law rests on a new government office that will collect information on groups of individuals that receive foreign funding and are perceived to influence the public debate. Hungary's secret services are compelled to assist the office.
The provisions of the bill, particularly its vaguely-worded mandate and lack of judicial oversight, have raised serious concerns from civil society and media outlets, who fear they will be unfairly targeted for refusing to follow Orbán's political dogma.
The European Commission echoed these considerations and said on Wednesday that the law "violates" a wide range of fundamental values, such as the principle of democracy, the right to a private life, the protection of personal data, freedom of expression and association, and the right to a fair trial, among others.
Hungary has two months to reply to the Commission's objections. The letter of formal notices is the first step under the infringement procedure, which can lead to a lawsuit and daily fines before the European Court of Justice.
The United States had previously criticised the law, decrying its "draconian tools that can be used to intimidate and punish those with views not shared by the ruling party."
The new clash between Brussels and Budapest comes mere days after a high-stakes summit that saw Orbán lift his veto on a €50-billion special fund for Ukraine, following a pressure campaign from his fellow leaders and the European Parliament.
As part of the negotiations that preceded the summit, Orbán had demanded the immediate release of the roughly €21 billion in EU funds that the European Commission has withheld over persistent rule-of-law deficiencies inside Hungary.
This story is developing.
