Updated

The governments of Germany and the United States expressed concerns Wednesday about a law passed by Hungary's parliament that regulates civil society groups.

The bill passed Tuesday requires groups that receive more than 7.2 million forints ($26,200) a year from abroad to register and publicize the fact.

The law is nominally meant to increase transparency among civic groups, but critics say it is part of Prime Minister Viktor Orban's efforts to stifle dissent and increase control over public discourse.

German Foreign ministry spokesman Martin Schaefer said Germany was "very concerned" by the law as it suggests that Hungary views foreign funding of civil groups as a "hostile, or at least unfriendly, act."

Schaefer told reporters in Berlin on Wednesday that Germany would watch closely what impact the new law has on civil society in Hungary.

In Budapest, the Hungarian capital, the U.S. Embassy said the United States was "troubled" by the legislation, which could "stigmatize" local NGOs.

The law "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 embassy said. "If signed into law, this legislation will constitute a step backward from the principles of freedom of association and expression ... and from our shared commitments to supporting civil society."

The law is part of a wider conflict between Orban and Hungarian-American financier George Soros, whose Open Society Foundations support some of the NGOs targeted by the bill, including the Hungarian Helsinki Committee, a human rights advocate, and corruption watchdog Transparency International. The government sees the groups as "foreign agents" working against Hungarian interests.