The Constitution, Law and Justice Committee, chaired by MK Simcha Rothman (Religious Zionism), convened on Monday and continued to prepare for first reading the Associations Bill (Amendment—Donation from Foreign State Entity), 2024, sponsored by MK Ariel Kallner (Likud).
In the updated version of the bill presented by the committee chair, it is stipulated that any non-profit association that declares that it does not engage in a long series of activities, including political activity, activity in the Knesset, demonstrations and criticism of the Government, will be excluded from the special taxation provision. An association that does not declare this will be subject to a 23% tax on donations from a foreign entity, similarly to company tax. An association that issues a false declaration will be subject to double tax and will have a financial sanction imposed on it. After two violations, the Registrar of Associations will be able to take action to dissolve the association. In addition, all non-profit associations that receive funding from a foreign entity will pay an enlarged fee in petitions to the High Court of Justice.
Committee Chair MK Rothman presented the updated version of the bill, saying, “Following the deliberations, we have fine-tuned the bill, but the rationale of the bill has been preserved perfectly. We welcome cooperation with foreign countries, mainly friendly ones; there are mutual ties and there are joint actions between Israel and countries around the world in many fields. The wording before you does not harm these activities and does not pertain to them, and there is no intention to do so. We will not accept political intervention by foreign countries. If someone wants to operate through France, Germany or even Qatar, let him declare it and he will be able to act.
“One of the main points of the bill deals with turning to the court. We reached the conclusion that a sweeping prohibition is too broad. Conversely, according to a report that we mentioned in recent meetings, 998 petitions with foreign funding were submitted over eight years, and they are flooding the court. The court is a rare resource, and if foreign countries or associations receiving foreign funding wish to use these resources, they will pay a realistic fee. I know that there is a memorandum of law dealing with financial sanctions on non-profit associations and companies for the benefit of the public, but we wanted to give a full picture with regard to foreign funding of non-profit associations,” said MK Rothman.
MK Kallner: “A total of NIS 1.3 billion were channeled by European governments over the past 13 years to non-profit associations dealing with politics and advancing controversial political agendas, which represent a very small population and receive huge resonance through the money of foreign governments. There were many comments on the initial bill—my intention was not to harm ‘uninvolved parties,’ there are many associations that do important work. Empowerment of civil society is welcome, but politics has to be out of the picture. Whoever breaks the transparency laws will be subject to significant sanctions. Whoever wants to deal with politics [while receiving] foreign funding will not receive an exemption. Subsidization of petitions to the High Court of Justice is intended for Israel’s citizens, and not for foreign governments.”
Minister of Finance Bezalel Smotrich: “The Government supports the bill with both hands and wholeheartedly. I have been dealing with this for years, since I was in Regavim, and the Im Tirtzu campaign, facing an insane industry of foreign countries that run roughshod over the freedom of choice of Israel’s citizens, nearly trying to buy with money the Jewish state. We are in favor of non-profit associations and donations, we are in favor of diplomatic measures, but we are not willing to accept by any means countries that pour money onto non-profit associations with the aim of influencing the country. Some to BDS, some to an ‘industry of petitions’ that clog up the Supreme Court. Those who fail time after time in democracy try to influence through foreign countries. There are accepted channels of ambassador and institutions. This is unacceptable. We need to fend off with a sharp stroke the illegitimate and impudent intervention in the State of Israel‘s affairs. They fight against Judea and Samaria, they fight against economic policy, and there is no precedent for this. No country would allow another country to intervene in its internal affairs.
“To say that we will only apply company tax to this is to say that it is legitimate, and makes it possible to work through lobbying firms, for example. A way has to be found to say that this is illegitimate. The most that I managed to pass in the 20th Knesset was a disclosure requirement, and this doesn’t work. If a foreign entity wants to donate to a hospital or to Holocaust survivors, that is legitimate. No one will harm Holocaust survivors. There are agreements between countries, and there’s no such thing as having a country operate within another country’s space without this having been signed in an agreement of understandings between the countries.
“We have to agree on rules of the game of democracy. You bear the name of democracy in vain in order to advance undemocratic measures, and we are the ones who rally to safeguard democracy time after time. Israel’s citizens are the sovereign, responsible for our fate, conducting the discourse on the street and in the ballot box. After you failed in the attempt to buy the hearts of the people of Israel, you mobilize other countries with millions in funding; that is the most undemocratic thing possible. The decisions will be made here, including on the matter of the deal. We have diplomatic relations, contrary to what you are trying to show, as if we are in isolation. We conduct an impressive diplomatic system with all the countries, trade and economic ties, all through accepted channels. The bill doesn’t silence anyone, it only establishes legitimate rules of the game. The bill must not give legitimacy and only exact a certain price. I urge you not to yield to demagoguery and scare tactics. Advance the bill as quickly as you can,” said Minister Smotrich.
MK Karine Elharrar (Yesh Atid): “You live in an imaginary world. Thank you indeed for accepting the fact that the families of the hostages march because they want their loved ones, when you aren’t advancing a deal. At the start of your political career you were much more social-minded. You know that civil society organizations that deal with women’s rights, the rights of people with disabilities and the LGBTQ+ community, sometimes receive money from foreign non-profits. If there were no Bizchut organization, there would be no ruling on the matter of Shahar Botzer, which determined that there would be elevators in schools. A great many other rights would not be advanced. What is your solution for all the rights that the Government doesn’t feel like advancing?”
Minister Smotrich: “That is not legitimate. There’s a serious value-based debate over each of the issues you mentioned. We advanced many rights during my term of office, but that is not the point. Foreign countries will not decide whether an elevator for accessibility is needed. Foreign countries will not dictate to the State of Israel what the social, economic or political views are.”
Ministry of Foreign Affairs Director General Eden Bar Tal: “We think that there is room for legislation that will prevent the intervention of foreign countries in central and vital Israeli interests. Along with this, it’s important to enable positive activity, in fields that are important to Israeli interests, and through the definition of these key fields, the structure of the rules and the wording can be derived. It will be easier to create consensus or understanding on these fields. On foreign affairs and defense issues, intervention should be prevented that is aimed at delegitimization and boycotts against Israel and Israelis, the state’s identity, including issues of change due to immigration to Israel, citizenship for infiltrators and more. Another point is intervention designed to spark disturbances. We propose that random acts will not mark an association in a sweeping manner, [such as] a random act committed by the guest of an association, who comes and says something that does not reflect the goals and actions of the association. That is to avoid pouring out the baby with the bathwater. I would like to point out that the draft does not address activity that is carried out indirectly, meaning that it is possible to circumvent the law very easily. Regarding the amount, we would propose that it should not be symbolic. It should be significant, or for the percentage of the association’s revenue to be very high.”
MK Gilad Kariv (Labor): “We’re talking about a tax on foreign funding while a country that hosts the leaders of Hamas is engaged in funneling millions into the pockets of the Prime Minister’s close associates. [Prime Minister MK Benjamin] Netanyahu (Likud) brought billions in foreign money to fund Hamas, built a bureau of Qatari agents in the inner sanctum of the executive branch, he is inviting foreign intervention by the US administration in his trial—and now a smoke-screen bill is being brought here on the intervention of foreign governments in the state, which is continuing at this very moment. The bill only appears to be proportionate. It talks about 23% instead of 80%, but it’s much worse [than before] because it stains the core activity of political non-profit associations as illegitimate.”
Colette Avital, Chair of the Center of Organizations of Holocaust Survivors in Israel: “For the past 73 years, the Claims Conference has been giving Israel funds that the State of Israel did not provide to the survivors. Without it, thousands of survivors would not have received a penny until today. If these funds are deletigimized, it means that the state will have to give all these funds. Does the Ministry of Foreign Affairs want to absolve of responsibility the governments of Germany or France, which continue to transfer funds? The wording of the section should be revised to ensure that the Claims Conference is not taxed.”
Committee Chair MK Rothman: “Either we will make an exception for anything that is part of a bilateral agreement, or we will make a specific exception for the Claims Conference. I give my word that philanthropic aid to Holocaust survivors will not be taxed.”
MK Aida Touma Sliman (Hadash-Ta’al): “I founded and managed a non-profit association of women against violence for 20 years. When it began to operate, no one in my society wanted to talk about the murder of women or sexual assault against women. We didn’t receive donations, because the state didn’t support and didn’t see the Arab women. We set up shelters for women and an assistance center, much of it with the support of foreign countries, and we did engage in lobbying. We were impeccably loyal to our society and to the values we presented. I don’t need to be with a writ of loyalty not to criticize the Government that doesn’t tend to its citizens; not to criticize a deranged minister who has caused the highest crime rate and the highest number of murders.”
Committee Chair MK Rothman: “A great amount of demagoguery can be generated regarding the bill, as we have seen, but we can unite over a very simple statement, that in a democratic state, in a democratic discourse, the citizens of Israel should play a role. And whoever think that perhaps, because his position is less popular in Israel, he should be given a huge megaphone to shout through, and it will be written on the megaphone ‘donated by foreign countries’—he is not advancing anything except for foreign involvement and harm to Israeli democracy. This is something that we must stand against together as a fortified wall.”
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