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Committee chairman MK Simcha Rothman leads a Constitution, Law and Justice Committee meeting at the Knesset, in the Israeli parliament on July 21, 2025. Photo by Yonatan Sindel/Flash90

Israel Is Muzzling Its Internal Opposition

A new law threatens to use the taxing of foreign donations

“I am among the founders of an organization that is still operating, Women against Violence, and I — we — could not have succeeded in bringing up this issue of violence and offering the services that we provide to Arab women without foreign support … simply because the state was not willing to take upon itself the basic responsibility to protect women. This is still the case and it’s even getting worse.” So said Hadash Member of Knesset Aida Touma-Sliman in a heated hearing of the Constitution, Law and Justice Committee held on 5 May this year dedicated to an alarming legislative initiative. The initiative passed a preliminary hearing in the Israeli Knesset in February 2025, and since then is in the process of being prepared for its first reading (out of three).

Under the pretext of defending Israel’s democracy and sovereignty, the initiative seeks to severely debilitate, or in some cases disable, the operation of many civil society organizations in Israel who are fighting against the Israeli occupation and apartheid, and for human rights and democracy. If this initiative, a proposed amendment to the NGOs Law, is approved by the Knesset, another milestone on the road to eliminating Israel’s democratic character and turning it into a full authoritarian state will have been achieved.

The current formulation states that organizations that receive foreign donations exceeding a certain (yet to be determined) amount must attach a written commitment to refrain from engaging in a vast and diverse array of activities for three years to their financial report. Generally, these include activities which certain civil servants are forbidden to engage in by Israeli Law, activities which lobbyists are forbidden to engage in or need a permission from a designated Knesset committee, and what Israeli Law defines as electoral activities. According to the proposed amendment, NGOs who decline to sign a declaration or violate it will be obliged to pay a 23- to 46-percent tax on donations from foreign state entities. Furthermore, two consecutive sanctions for violating legal obligations will constitute grounds for dissolving an NGO.

In the context of the Association Law, donations from a “foreign state entity” are donations whose source is a foreign state, union, or group of foreign states like EU and UN bodies. Thus, foreign state entities include local embassies, church foundations when their funds originate from their respective states, and other state-funded organizations.  When it comes to Germany, the term also applies to the German political foundations, including the Rosa Luxemburg Foundation.

It is important to re-iterate that all the restrictions and sanctions presented above apply to NGOs whose donations from foreign state entities exceed a certain amount, but do not apply at all to organizations that receive most or all of their funding from private donors or Israeli state or public institutions.  This distinction is telling, as it is the critical, progressive, and left-leaning NGOs that receive donations from foreign state entities, whereas foreign funding of right-leaning NGOs comes mostly from private donors. Moreover, critical organizations like B’Tselem and Breaking the Silence are often cited in arguments for the proposed legislation.

Thus, the amendment stands to severely restrict the work of many different organizations working to advance human rights, democracy, equal citizenship, marginalized communities, the rights of the Palestinian minority in Israel, and anti-occupation and peace building organizations. Looking closely at the specific activities the proposed amendment refers to underscores the detrimental blow it will inflict on the effected organizations.

It might seem reasonable and even desirable to forbid NGOs from engaging in activities such as political parties or election propaganda, offering benefits to Knesset members, or misleading, pressuring, or threatening them. But where should we draw the line between, for example, legitimate criticism, and harming the dignity of the Knesset or one of its members? Or between legitimate pre-election debates and illegal electoral influence? If allowing or prohibiting these activities is debatable, other prohibitions in the amendment are a clear violation of democratic freedoms. These include the prohibition to organize a public gathering of a political nature, to preside or speak in such a gathering, or to publicly criticize government or ministries policies. Further up for discussion as prohibited activities are calls for boycotting Israel, cooperating with a declared terror organization or individual, activities de-legitimizing the state of Israel and negating Israel as a Jewish State.

Thus, the proposed amendment severely restricts, if not completely disables, much of the critical and advocacy activities at the core of the affected organizations. With a 23-  to 46-percent tax on donations from foreign state entities, it is safe to assume that democratic states will not agree to make any further donations, making it effectively impossible for NGOs to receive contributions from what has historically been one of their main sources of income, human rights and democracy-building programmes operated by Israel’s allies, as well as state-funded aid organizations, including EU and UN bodies.

Advocates of the proposed amendment claim that direct financial support of Israeli NGOs by foreign state entities constitutes indirect foreign influence on the State of Israel and undermines sovereignty and independence. They treat the NGOs as envoys advancing their foreign state donors’ agenda and interests, and not as local autonomous entities with agendas of their own.

A closer look at the proposed amendment and statements made by its advocates suggests that defending democracy might not be the primary motivation. If it indeed seeks to prevent foreign influence, then why does it only target donations from state entities? While it is true, as the amendment’s advocates claim, that states have diplomatic channels through which they can exert influence, their donations to civil society organizations are strictly regulated and unsupervised, unlike private donations. Private donors also seek to exert political influence through donations. A case in point is the Kohelet Forum, which receives most of its funds from private foreign donors and advances a right-wing conservative agenda through position papers and policy recommendations.

Interestingly, the Israel Democracy Institute could not find equivalents to such funding bans in other Western democracies, except in the eroding democracies of Hungary and Poland. These two states apply measures to restrict the activities of critical CSOs. However, these measures are far less extreme than the proposed amendment, and do not distinguish between state and private foreign donations. In Hungary, for example, CSOs reliant on foreign funding are obliged to declare as much on their website and other platforms. In Poland, measures mostly restrict government financial support, which is given mostly to organizations that advance Christian or “patriotic” values.

In order to understand the deeper meaning of the proposed amendment and grasp its grave implications, we need to take the broader context into account.

Legislative attempts to target organizations who receive more than half of their funds from foreign state entities are not new. Previous proposals to tax foreign donations were taken off the table, mostly due to international pressure. Under the pretext of transparency, legislation approved by the Knesset between 2008 and 2016 gradually increased reporting requirements on such donations — from specific and frequent reporting to the Registrar of CSOs up to the obligation for CSOs to explicitly state their foreign support in publications and public appearances.

Another legislative attempt to attack those who criticize Israel’s policies and practices in the Occupied Territories is by criminalizing assistance to the International Criminal Court. A proposed bill titled “Protection of Israeli Public Officials from the Action of the International Criminal Court in The Hague against the State of Israel” passed a preliminary hearing in the Israeli Knesset in February 2025 and is now being prepared for its first reading. This rather elaborate bill’s definition of what constitutes such assistance is currently quite broad, and may change during the legislation process. Currently, it calls for punishments of up to five in prison imprisonment or, in the case of delivering classified information, a life sentence.

The bill seeks to make it impossible for any individual or organization in Israel to publish material that could be used against Israeli officials at the ICC. Nearly all B'Tselem’s work, for example – reporting, researching and publishing on serious violations of Palestinians’ human rights – could be considered an offense. As a representative of Breaking the Silence explained in February, such assistance could even include soldiers’ testimonies published on their website, as these testimonies could theoretically be cited in cases brought against Israel’s leaders at the ICC. 

According to Prof. Itamar Mann, an expert in international law, the bill could also apply to research findings if they demonstrate Israeli responsibility for war crimes, crimes against humanity, or the crime of genocide, and reach the ICC. Such legislation, he explains, might deter graduate students from researching in these areas. Indeed, if the bill becomes a law, even if the final draft is less broad in scope, it is likely to have a significant chilling effect.

This sort of legislation is one aspect of a wider campaign not only to financially debilitate but also delegitimize and restrict pro-human rights, pro-democracy, and anti-occupation organizations. Right-wing politicians, civil society organizations, journalists, and other actors have launched smear campaigns and put pressure on venues to cancel progressive events. MK Simcha Rothman, a member of the Religious Zionist Party and chair of the Constitution, Law and Justice Knesset Committee, practiced what he preached. Referring to the original formulation of the amendment that focused on taxation of donations from foreign state entities, he said that the proposal addressed the symptom - donations from foreign state entities - and not the disease. The disease, according to Rotman, lies in the very activities of CSOs like B’Tselem. He used his prerogative as the committee’s chair to put forward his own draft amendment, which seeks to restrict the activities of these NGOs.

These intensified efforts to silence criticism of the Israeli regime are directed not only towards Israeli organizations and activists but also towards international groups. In February 2025, the Israeli Knesset approved an expansion of the criteria to bar non-citizens from entering or residing in Israel. Under this law, individuals or organizations that, according to Israeli authorities, deny the events of 7 October or the Holocaust or have expressed support for prosecuting members of Israel’s armed forces before international courts can be denied entry.  This legislation builds upon a 2017 amendment that barred entry to individuals or organizations advocating for boycotts against Israel.​ As an open letter by nine Palestinian CSOs in Israel stated, in practice, Israel has long used such restrictions to prevent the entry of human rights defenders, legal professionals, and civil society actors critical of its policies.

In December 2024, the Israeli government decided to establish an inter-ministerial team responsible for registering international NGOs who mainly engage in assisting Palestinians and recommending whether their foreign workers should be allowed to stay. The decision gives officials broad authority to reject the registration of international NGOs, using a far-reaching set of guidelines. Among the criteria: whether an NGO or its employees have ever called for a boycott of Israel, denied its existence “as a Jewish and democratic state”, or expressed support for legal proceedings against Israeli citizens in international courts for acts carried out while serving in the military or any security agency.

Aid groups say they are particularly worried about a provision requiring them to submit the names, contact details, and identification numbers of Palestinian staff, as submitting this information might put them at risk. Furthermore, as part of their missions, international NGOs advocate for the rights and protection of civilians under international humanitarian law. The broad new directives, which the Israeli government says do not constitute an exhaustive list, could be used to penalize the most outspoken critics of Israel’s conduct in Gaza.

A press release published in May 2025 and signed by 55 organizations operating in Israel and the Occupied Palestinian Territories calls Israel’s new registration measures a grave threat to humanitarian operations and international law. These new rules, they say, are part of a broader, long-term crackdown on humanitarian and civic space, marked by a series of actions that restrict humanitarian access, compromise staff safety, and undermine core principles of humanitarian action.

On the Road to Authoritarianism

The Israeli state is passing these measures after launching a genocidal attack on Gaza and while advancing ethnic cleansing and annexation of the West Bank through military operations and settler violence, as well as the implementation of fundamental changes in the structural and procedural control of the West Bank. It is in this context that one should understand the grave implications of the proposed amendment.

As the Israeli government implements its extreme and destructive right-wing agenda in the Occupied Territories and seeks to repress any criticism or resistance, most opposition politicians and the wider public have, until recently, either shown support or simply lacked interest. This is due, partly if not mostly, to the long-term strategic decline of liberal and progressive actors and concurrent expansion of right-wing power. The elites in Israel — with the active participation of politicians, civil society organizations, research institutes, and other actors — have changed.  Over the last two decades or so, advocates of a right-wing agenda gradually took over senior positions in key institutions like the army, academia, the legal system, and the media, heavily shaping Israeli public opinion and discourse. The juridical overhaul advanced by the current government, undermining the system of checks and balances and leading Israel towards an authoritarian regime, can be seen as a culmination of this process.

Several prominent civil society organizations submitted position papers expressing their opposition to the bill, including the Israel Democracy Institute, the Association for Civil Rights in Israel, the LGBTQ+ Coalition, Brothers in Arms, and others. The Citizens’ Commission for Investigating Hamas Crimes of 7 October also expressed its opposition, explaining that its archive exists thanks to support from the German Embassy in Israel. At the time of writing, progressive actors were engaging in intensive efforts to lobby against the amendment. These efforts seem to be bearing some fruit, as the legislative process is receiving media attention, while opposition MKs, not only from Hadash but also from centrist parties like Yesh Atid, the Democrats and The National Unity faction, publicly voice their opposition.

Without underestimating the importance of these local efforts and developments, past experience shows that what succeeded in averting previous attempts to impose harmful measures on critical and progressive NGOs was international, and specifically American and possibly German pressure on Israel. With Trump as US President, it seems unlikely that the US administration will put up much opposition. It remains to be seen what the position of the EU and Germany will be.

The proposed legislation might seem a minor issue in the face of the deep humanitarian and political crisis in Gaza, the grave developments in the West Bank, and the continued implementation of the juridical overhaul in Israel. However, this legislation targets, among others, exactly those civil society organizations that dedicate their efforts to demanding Israel fulfil its moral and legal obligations and pressuring the international community to hold Israel accountable. Therefore, the international community should strongly oppose this detrimental and anti-democratic initiative.  

Author

Tamar Almog is a project manager at the Rosa Luxemburg Foundation's Israel office in Tel Aviv.

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