Likud bill targeting NGOs’ foreign funding shelved amid international uproar

Proposed law that would radically limit donations to human rights groups pulled from ministerial agenda on Sunday, following outcry from allies including US, France, Germany

Members of the left-wing NGO Breaking the Silence hold images  allegedly showing abuses by the Israeli military, during a tour in the West Bank city of Hebron, November 2, 2022. (Flash90)
File: Members of the left-wing NGO Breaking the Silence hold images allegedly showing abuses by the Israeli military, during a tour in the West Bank city of Hebron, November 2, 2022. (Flash90)

A contentious bill that would significantly limit Israeli civil society groups’ ability to accept donations from foreign governments has been shelved, at least temporarily, following sharp criticism from key Israeli allies including the US, Germany and France.

The bill was pulled from the Sunday agenda for the Knesset’s high-level Ministerial Committee for Legislation, although it may be returned for the government’s consideration at a later date. Likud sources said that Prime Minister Benjamin Netanyahu was responsible for the decision to withdraw the bill. The premier was said to be reticent to advance the ally-angering legislation while still waiting for a coveted invite to the White House, among other diplomatic considerations.

Citing a “diplomatic source,” several Hebrew-language media outlets reported as early as Saturday that the proposed law would not come before the panel, as initially scheduled. The bill, drafted by Likud MK Ariel Kallner, was set to be “reexamined in light of the concerns expressed by a few countries,” said the source, cited by Walla.

Netanyahu is personally involved in Israel’s response to the objections lodged with the Prime Minister’s Office and the Foreign Ministry, a senior diplomatic official told Channel 13 on Thursday.

The bill states that any nonprofit group that engages in public advocacy two years before or after receiving a donation from a foreign government will lose its status as a public institution and will no longer be eligible for tax exemptions. In addition, those non-profits will be hit with a 65 percent income tax.

The bill would likely cripple the ability of human rights organizations to operate in Israel and the West Bank, as many of them rely on funding from foreign governments.

An illustrative photo of a banner supporting the Breaking the Silence organization, in Tel Aviv, July 1, 2017. The banner reads ‘We are all breaking the silence.’ (Tomer Neuberg/Flash90)

It is viewed as targeting left-wing groups that are considered adversaries by Netanyahu’s right-wing government.

Human rights organizations — such as B’Tselem, Breaking the Silence and the New Israel Fund — have long been targeted by the Israeli right wing for their exposure of alleged Israeli human rights abuses against Palestinians.

Right-wing lawmakers have often cited foreign funds for such groups to delegitimize them as the ostensible face of foreign meddling in Israel’s internal affairs.

Left-wing activists point out that right-wing civil society groups also take funding from foreign investors. Those donors might be individuals, not countries, but the funds are often transferred with far less transparency, the left-wing activists claim. Israel also funds civil society groups abroad.

Knesset legislation similar to Kallner’s bill has been proposed in the past but has never been approved amid pushback from abroad. If it can return to the coalition’s agenda, the new initiative appears to have a better chance of becoming law given the hardline, pro-settler makeup of Netanyahu’s coalition.

A pledge to pass such a bill was also included in the coalition deal Likud signed with the far-right Otzma Yehudit party.

Meanwhile, Likud and Otzma Yehudit will move forward with a government resolution to assert “Zionist values” over all matters of government policy and in particular those relating to the settlement enterprise, despite the expected international criticism and the attorney general’s likely opposition.

The resolution would also hand benefits to those who perform military service.

Advanced by Negev, Galilee and National Resilience Minister Yitzhak Wasserlauf of the far-right Otzma Yehudit party, the resolution bases the Zionist values it seeks to promote on those expressed in the controversial Basic Law: Nation-State of the Jewish People, which caused outrage among the country’s minorities when it passed in 2018.

That law asserts that only the Jewish people have the right to national self-determination in the State of Israel, and sees “the development of Jewish settlement” as a national value which it will encourage and advance.

Members of the far-right Otzma Yehudit party, including party leader and National Security Minister Itamar Ben Gvir as well as Negev, Galilee and National Resilience Minister Yitzhak Wasserlauf hold a party meeting at the illegal West Bank settlement outpost of Evyatar, February 27, 2023. (Courtesy: Otzma Yehudit)

Ynet reported Saturday that the Prime Minister’s Office and the senior officials in the Justice Ministry were holding intensive talks on crafting a draft resolution that would establish “the values of Zionism” as “guiding values” for the country.

US and European allies are fiercely opposed to the resolution, according to Ynet, but there is wider support for it among cabinet ministers.

Wasserlauf’s proposed resolution appears to be expressly focused on the issue of advancing Jewish presence in the West Bank and throughout Israel, with the text of the resolution stating that it is applicable to government agencies involved in land allocation and construction planning, such as the Israel Land Authority and the National Council for Planning and Construction.

A separate Otzma Yehudit proposal, which would ban waving the Palestinian national flag on Israeli campuses, is expected to come before the Ministerial Committee on Legislation on Sunday, said a representative for the party. Army Radio, however, reported on Sunday morning that the panel will likely defer declaring its stance on the bill, functionally shelving it for a further period of time.

Otzma Yehudit, led by National Security Minister Itamar Ben Gvir, is an ardent opponent of Palestinian statehood in the West Bank and a strong advocate for the expansion of Israel’s settlements in the territory, and the party included a specific clause in its coalition agreement to legalize some 70 illegal settlements built without government authorization.

It appears likely that a central objective of Wasserlauf’s resolution will be to further expand settlements.

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