The position of civil society is being addressed in the European Commission’s Defence of Democracy Package, that includes a proposal for a directive.

Consultation

A European consultation by the Commission, regarding that package took place in 2023. Undesirable money flows to civil society organisations are part of that package, although the importance of civil society was recognised:

Civil society organisations act as watchdogs when democratic foundations and institutions are threatened. They hold governments to account, protect and promote fundamental rights and, among other things, protect our societies from undue influence by combating disinformation. Similarly, active and engaged public participation, including through deliberative processes, is essential to the quality of democratic life.

(By the way, it is to be hoped that the European Commission does not count criticism of European policies and legislation as ‘disinformation’.)

It seems that the issue of ‘undesirable financial flows’ is mainly about lobbying, where it is interesting whether the package affects the many US- and UK-funded nonprofits operating in the EU. On the consultation, I wrote this article (Dutch) in May 2023.

Commission news release 12 December 2023

The Commission adopted the package on 12 December 2023, according to this news release from the European Commission. Some text from the release:

Today, the European Commission adopted a Defence of Democracy package, ahead of the 2024 European elections. The central piece of this package is a legislative proposal that will enhance transparency and democratic accountability of interest representation activities on behalf of third countries which are aimed at influencing policies, decision making and the democratic space. It also includes two recommendations which aim to promote free, fair and resilient elections and the participation of citizens and civil society organisations to policy-making.

The aim of this package is to tackle the threat of foreign interference with more transparency, while at the same time encouraging civic engagement and citizens’ participation in our democracies. (…)

Today’s proposal for harmonised rules aims to ensure a common high level of transparency and democratic accountability across the EU in relation to lobbying campaigns, as well as similar activities, performed by entities on behalf of a third country government.

The proposal foresees the following transparency requirements:

• Registration in a Transparency Register: entities carrying out interest representation activities on behalf of a third country will have to register in a transparency register. Member States will be asked to establish or adapt existing national registers for this purpose.
• Public access: key elements of the data on such interest representation activities will be publicly available, allowing for transparency and democratic accountability. This relates, for instance to the annual amounts received, the third countries concerned and the main goals of the activities.
• Record keeping: entities carrying out interest representation activities on behalf of a third country will be required to keep records of the key information or material related to the interest representation activity for a period of four years after the end of this activity.

The proposal includes proportionate rules and safeguards to avoid registration requirements being misused to limit fundamental rights, such as the freedoms of expression or of association, or to unduly restrict the civic space, namely:

• Independent supervisory authorities will be empowered to request limited records in duly justified cases only and in a proportionate manner;
• Authorities need to ensure that no adverse consequences arise from registration;
• Possibility to derogate from the publicity of information in duly justified cases;
• The full harmonisation under the proposal prevents Member States from maintaining or introducing additional requirements and practices.

With this proposal, the Commission seeks to contribute to setting standards, not only in the EU, but also on a global scale, on how to address foreign influence in a streamlined and proportionate way, fully respecting fundamental rights. (…)

Next steps

The Commission looks forward to the full engagement of the European Parliament and the Council to make decisive progress on all legislative proposals in the democracy area before the European parliamentary elections; and for the wide circle of national actors involved, public and private, to ensure the implementation of the European Democracy Action Plan and of this new Defence of Democracy package. (…)

Today’s Defence of Democracy package includes a Directive on transparency of interest representation on behalf of third countries, a Communication reviewing the work done under the European Democracy Action Plan, a Recommendation on inclusive and resilient electoral processes in the Union and enhancing the European nature and efficient conduct of the elections to the European Parliament, and a Recommendation on promoting the engagement and effective participation of citizens and civil society organisations in public policy-making processes. The Commission also published today the results of a complementary Eurobarometer survey on Democracy.  

Comments

The question is how broadly the Commission interprets the concept of interest representation. Does it include Open Ownership’s (UK- and US-funded) lobbying for global beneficial ownership registers?

Is it not Foreign Agents Law?
Emilia Korkea-aho wrote for Verfassungsblog: “This Is Not a Foreign Agents Law” The Commission’s New Directive on Transparency of Third Country Lobbying. She mentions that in the plenary debate the Commissioners seemed eager to clarify that the Proposal for a Directive on Transparency of Interest Representation on behalf of Third Countries is not foreign agents law, and:

But the more a statement is repeated, the less credible it appears. Rather, the opposite appears to be true. And so, the devil is not in the name, it lies in enforcement. Despite the Commission’s assertion that full harmonisation of the Directive prevents Member States from gold-plating or potentially worse activities, the Commission has limited control over how Member States apply and enforce their national laws. This is the biggest risk of the proposal.

More information:

• Commission page on Protecting democracy.
• Commission page Documents on Defence of Democracy.
• Commission: Proposal for a Directive on Transparency of Interest Representation on behalf of Third Countries, 12 December 2023.
• Commission: Recommendation on promoting the engagement and effective participation of citizens and civil society organisations in public policy-making processes, 12 December 2023.
• Council: ‘Defence of European Democracy’ legislative package – Policy debate, 19 January 2024.
• European Parliamentary Research Service (EPRS): briefing, February 2024.
• Council: Proposal for a Directive on Transparency of Interest Representation on behalf of Third Countries – Policy debate, 12 June 2024.