Legislation recently frozen by Prime Minister Benjamin Netanyahu that would significantly limit Israeli civil society groups’ ability to accept donations from foreign governments is “dead,” a senior US official told The Times of Israel on Thursday.
“They had every intention to pass this… but now it’s dead,” the official said, indicating a level of permanence that had not been vocalized by Israeli or US officials to date.
A Likud official also speaking on condition of anonymity asserted that the directive by the premier to remove the coalition bill from the Ministerial Committee of Legislation’s agenda for Sunday was merely temporary. Likud MK Ariel Kallner, who drafted the legislation, has since pledged to continue his efforts to ensure that it passes.
But the senior US official suggested that Kallner should not get his hopes up: “It’s very hard to bring this stuff back once it’s postponed.”
Spokespeople for Kallner and Netanyahu did not respond to requests for comment.
The Biden administration aggressively lobbied both publicly and behind the scenes against the bill alongside nearly a dozen countries in Europe that give millions of dollars a year to various civil society organizations operating in Israel and the West Bank, particularly ones that seek to promote the conditions necessary for a future peace agreement between Israel and the Palestinians.
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.
If passed, the legislation 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.
Left-wing rights groups — such as B’Tselem, Breaking the Silence, and the New Israel Fund — have long been targeted by the Israeli right-wing and even the political center over their exposure of alleged Israeli human rights abuses against the Palestinians.
Right-wing lawmakers have sought to criticize the largely left-wing organizations by highlighting their source of funding and arguing that it represents interference in Israel’s internal affairs.
Left-wing activists in turn point out that right-wing civil society groups also take funding from foreign investors. Those donors might be individuals as opposed to countries but the funds are often transferred with far less transparency, the left-wing activists maintain. Israel also funds civil society groups abroad with various political motivations.
Such Knesset legislation has been proposed in the past but, amid pushback from abroad, has never been approved.
The initiative appeared 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.