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Israel backing away from bill to rein in foreign-funded NGOs

Among the countries reportedly expressing concern about the bill were Germany, France, Great Britain, Sweden, Belgium, Ireland and the United States.

Prime Minister Benjamin Netanyahu addresses the weekly Security Cabinet meeting, Jan. 29, 2023. Photo by Haim Zach/GPO.
Prime Minister Benjamin Netanyahu addresses the weekly Security Cabinet meeting, Jan. 29, 2023. Photo by Haim Zach/GPO.

The Israeli government will likely shelve proposed legislation aimed to curb NGOs that receive funds from overseas, following criticism last week from European governments and also the United States, according to Israeli media reports.

The “Nonprofits Law,” which appeared on the Knesset schedule last week, would strip the nonprofit status from foreign-funded NGOs seen as interfering in Israeli domestic policy. Donations to those groups would be taxed at a rate of 65%.

Prime Minister Benjamin Netanyahu delayed advancing the bill, which was to have been brought to the Ministerial Committee for Legislation on Sunday.

Among the countries reportedly expressing concern about the bill were Germany, France, Great Britain, Sweden, Belgium, Ireland and the United States.

Germany’s Ambassador to Israel Steffen Seibert tweeted on May 25: “The draft bill on NGO taxation is a matter of grave concern to us and to many of Israel’s international partners. Lively and unhindered relations between civil societies are of essential value in our liberal democracies. We will continue to raise the issue with our Israeli friends.”

According to Ynet, British Foreign Secretay James Cleverly and German Foreign Minister Annalena Baerbock reached out to Israeli Foreign Minister Eli Cohen over the weekend to ask Israel to refrain from approving the law. Cohen told them that Israel will not accept interference in its internal affairs, nor foreign interference in the Israeli-Palestinian conflict, the paper reported.

U.S. State Department spokesman Matthew Miller said during a May 24 press briefing in reaction to the Israeli bill that “as a general matter, the United States supports the essential role of NGOs that are part of civil society.

“We believe that they are critical to democratic, responsive and transparent government, and we firmly believe that civil society should have the opportunity and space to operate and raise resources around the world,” he added.

Israel’s Army Radio reported that the White House told Netanyahu that if he wanted a meeting with U.S. President Joe Biden and American assistance in advancing ties with Saudi Arabia, he must withdraw the proposed legislation.

The Nonprofits Law was submitted by Likud Knesset member Ariel Kallner, and enjoys widespread support among coalition members.

Speaking of the bill in January, Kallner said, “Foreign political subversion must be put to a stop…. There is no legitimacy for the interference of states in the internal affairs of the State of Israel through the financing of non-profit organizations.”

Politically conservative NGOs in Israel published an open letter on Sunday protesting the news that the bill would be shelved.

“We received with astonishment the report about the removal from the government’s agenda of the debate over instituting a tax on NGOs supported by foreign entities due to pressure,” the letter stated.

“We, the NGOs of the national camp, who fight every day for the Jewish-national identity of the State of Israel, against those funded radical organizations and well-oiled systems, call on you, the government of Israel, to pass immediately the law to contain and oversee those organizations, which cause deep damage to the country with the help of the biggest antisemites and Israel-haters abroad,” the letter said.

Among the signatories were the groups Im Tirtzu, Betzalmo, Nachala, Lavi and Hotam.

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