The Knesset approved in the first reading Wednesday an Israeli version of the “Foreign Agent Registration Act” that requires non-governmental organizations to declare any money that they receive from foreign state entities. Ultra-leftist groups are very concerned by the bill, which would hamper the ability of groups supported by the European Union to operate freely without disclosing whom they are beholden to.

Twenty-three Knesset Members voted in favor of the bill and 12 opposed it. The bill now goes to the Law, Constitution and Justice Committee that will prepare it for the final readings.

The bill was proposed by Coalition Chairman MK Ze’ev Elkin (Likud). It is a watered-down version of his original bill, that would have taken away tax-exempt status from bodies that receive aid from foreign governments.

The bill in its current form requires a body that wishes to receive funds from a foreign government to register itself as a grantee of foreign funds with the registrar of non-profit organizations (NPOs, or ‘amutot’ in Hebrew).

Immediately upon receipt of a financial grant from a foreign state entity, the grantee must notify the registrar of the sum, its source and its purpose, as well as any commitments the body has given to the foreign entity.

If the grantee has an Internet website it must feature this information prominently upon it. The fact that the grantee received aid from a foreign state entity must also be featured clearly on any document it publishes pertaining to political activity. In addition, the grantee’s representatives must state that the grantee receives foreign aid, in their opening remarks in any political debate or meeting that is relevant to the purpose for which the aid was given.

The explanatory notes to the bill clarify that it is intended to increase transparency with regard to the funding of political activity in Israel by foreign state entities. While NPOs are already required by law to declare aid they receive from foreign states, such foreign grants are also given to bodies that are not NPOs, and therefore are not currently required to report them. The NPOs, too, can circumvent the requirement by using a third body for transfer of the funds or by only reporting the aid after a long time has passed, when the report is no longer relevant.

In addition, the current law does not require a grantee of foreign state funds to state their status in its documents and in the political activities it takes part in.

The Association for Civil Rights in Israel, a flagship grantee of the New Israel Fund, has been campaigning against the bill. ACRI claimed the bill was superfluous, but if the Knesset does decide it is necessary, the bill should force disclosure not just of grants from foreign state bodies, but also of grants from “an individual who is not an Israeli citizen, an Israeli citizen not residing permanently in Israel, or from any foreign corporation or other foreign legal entity.”

This, presumably, is an attempt to hamper the activity of nationalist groups that receive grants from Jews and other supporters who live abroad.

Journalist David Bedein, who has been lobbying for the bill for years, said it was “a great step forward.” He estimated that recent revelations by grassroots student organization Im Tirtzu about the New Israel Fund helped awaken Knesset members to the need for such a law. Bedein said that he had exposed, as early as 2001, that the EU was funding 40 radical groups within Israel.

The proposed law is based on the US’s Foreign Agent Registration Act that was passed in 1938 to hamper the ability of Nazi Germany to use American groups in order to further its aims within the US.