UPDATE 2-Hungary to set up courts overseen directly by government

Hungary passed a law on Wednesday to set up courts overseen directly by the justice minister, a move critics said would allow political interference in judicial matters and further undermine the rule of law.

The administrative courts will take over cases about government business such as taxation and elections currently handled in the main legal system. The government said the courts would be presided over by independent judges who would be able to handle cases more efficiently.

The justice minister will have big powers in appointing the judges and will oversee the courts' budgets. Rights groups said that compromised the separation of the executive and judicial powers in what they see as a further step towards authoritarianism by right-wing Prime Minister Viktor Orban.

"(The law) is a serious threat to the rule of law in Hungary and runs counter to values Hungary signed up to when it joined the European Union," the rights group Helsinki Committee said in a statement.

"As the Bill undermines the separation of powers, the boundaries between the executive and judicial power in Hungary will be blurred and it could pave the way for the government's political interference."

In September the European Parliament voted to impose sanctions on Hungary for flouting EU rules on democracy, civil rights and corruption. Hungary rejected the accusations.

The government has already asked for the opinion of the Venice Commission, a group of constitutional law experts of the human rights body Council of Europe and on Wednesday it said it would assess the commission's views and might make changes to the legislation if required.

Replying to Reuters questions, the Justice Ministry said the government "would assess the opinion of the Venice Commission and -- if necessary -- could carry out potential corrections (to the law)."

It also said administrative courts belonged under the direction of the justice minister in several European countries.

The new administrative courts, including a separate new supreme court, will start operating in 2020.

"Like any other court, public administration courts will be filled with independent judges solely governed by the word of the law," the government's spokesman said on his blog.

(Editing by Robin Pomeroy, Richard Balmforth)

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