The European Union has criticized the new NGOs ‘’Transparency Law’’ adopted by the Knesset, Israel’s parliament, that imposes new reporting requirements on nonprofit groups that receive more than half of their funding from foreign governments.

In a statement, an EU spokesperson said, ‘’the reporting requirements imposed by the new law go beyond the legitimate need for transparency and seem aimed at constraining the activities of these civil society organisations working in Israel.

‘’Israel enjoys a vibrant democracy, freedom of speech and a diverse civil society which are an integral part of the values which Israel and the EU both hold dear. This new legislation risks undermining these values,’’ the statement.

‘’ We call upon Israel to continue to promote its active NGO sector and to refrain from actions which may complicate the space in which civil society organisations operate and which may curtail freedom of expression and association.’’

In Washington, State Department spokesman John Kirby said the US was concerned the legislation could have a "chilling effect" on the activities of non-governmental organizations.

The new law requiresNGOs to state that they rely on foreign funding in all communication with public officials and on TV, newspapers, billboards and online.

Representatives of these groups must also declare they depend on foreign contributions to the heads of Knesset committees when participating in meetings.

The Israeli government has long accused the EU of meddling in Israeli affairs by funding such groups.

Gerald Steinberg, president of NGO Monitor, a watchdog group that has pushed for greater transparency of foreign-funded nonprofits, said ‘’this law is strictly symbolic and political," he said. "There are essentially no new restrictions."

He said he believes the best solution would be for Israeli and European lawmakers to hold a dialogue and together set guidelines for how money should be spent.

Critics of the law in Israel, including opposition leaders in the Knesset, say that the law specifically targets left-leaning human rights NGOs, which typically oppose government policy.