Article Israel: Disclosure Requirements for Organizations Funded by Foreign Political Entities

(July 19, 2016) On July 11, 2016, the Knesset (Israel’s parliament) passed the Duty of Disclosure [for a Body] Supported by a Foreign Political Entity (Amendment) Law, 5776-2016 (Amendment Law), thereby amending a law on the topic enacted in 2011 (Disclosure Law). (Amendment Law, 5776-2016, available at the Knesset website (unofficial text, click on the link for issue no. 1005); Disclosure Law, 5771-2011, SEFER HAHUKIM [BOOK OF LAWS, the official gazette, SH] 5771 No. 2279, p. 362, available at the Knesset website (last visited July 13, 2016) (both in Hebrew).)

The Amendment Law adds additional disclosure duties for bodies the majority funding of which derives from donations received from foreign political entities. The Amendment Law will enter into effect on January 1, 2017, and will apply to donations received starting that day. (Amendment Law, § 7.)

Bodies Subject to Disclosure Requirements

The Disclosure Law applies the definition of a “foreign political entity” (FPE) found in the Amutot [Non-Profit Organizations] Law. (Disclosure Law, § 1; (Amutot [Non-Profit Organizations] Law, 5740-1980, SH 5740 No. 983 p. 210, as amended.)

Accordingly, an FPE is any of the following:

  1. A foreign country, including-

(a) an association, organization, or a group of foreign countries ( referred to below as an association of foreign countries);

(b) an organ, agency, or representative of a foreign country or of an association of foreign countries;

(c) a local or regional authority or a governing authority of a foreign country, or of a country that has entered an agreement with [another] foreign country (referred to below as a foreign entity);

(d) an association, organization, or group of foreign entities;

2. the Palestinian Authority…;

3. a corporation established by a law of one of the bodies detailed in sections (1) or (2) or [one in which] such a body holds more than half of a certain type of control in the corporation or that has appointed the corporation to act on its behalf …;

4. a foreign corporation whose financial report for the last fiscal year indicates it was funded mainly by bodies listed in sections (1) to (3). ( § 36A.(a).)

Disclosure Requirements Under the Disclosure Law

An amuta receiving funding from an FPE is subject to quarterly financial reporting requirements as to the identity of donors, the amount and objectives of the donations, and the conditions for their receipt. (Id. § 2.) The information submitted to the registrar of amutot will be published on the website of the Ministry of Justice and by the funded body if it has a website, and in any other way selected by the Registrar. Additionally, an amuta that received a donation from a foreign entity for the purpose of funding a special advertising campaign must publish, as part of its campaign, the fact that it has received the donation. (Id. §§ 4-5.)

Additional Disclosure Requirements Under the Amendment Law

The Amendment Law requires any amuta that has received most of its funding in the last fiscal year from a FPE to state this fact in a digital form determined by the Minister of Justice. (Amendment Law, § 4, adding § 5A(a) to the Disclosure Law.) Such an amuta must also conspicuously state in any of the following media that most of its funding derives from a FPE:

  1. any publically accessible publication designed to promote the amuta’s objectives including billboards, television, newspapers, the homepage of its Internet site, or its digital publications made widely and continuously available on the Internet;
  2. any written request by the FPE to a public service provider or an elected official, by letter or by digital mail, on issues related to the performance of their official duties;
  3. reports prepared and distributed by the amuta for public review. (Id. § 4, adding § 5A(b) to the Disclosure Law.)

The Amendment Law further requires that any report prepared and distributed by the amuta for public review must, in addition to publicizing the fact that its funding is derived mostly from FPEs, provide the names of the FPEs from which it has received the donations that are listed on the Registrar of Amutot’s website. (Id. § 4, adding § 5A(c) to the Disclosure Law.)

Moreover, a representative of an amuta g primarily funded by FPEs who actively participates in meetings held by any Knesset committee must inform the committee’s chairperson of his/her being a representative of such an amuta before the hearing commences, or during the hearing or in response to a question by a Knesset member if informing the chairperson in advance was not possible. (Id. § 4, adding § 5A(d) to the Disclosure Law.)

The Amendment Law provides for the imposition on an amuta that violates its disclosure obligations of a fine of ILS29,200 (about US$7,582). (Id. § 5(2)(b), adding § 64A(a)(9) to the Amutot Law.)

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