The United States will deny Egypt $95.7 million in aid and delay a further $195 million because of its failure progress on respecting human rights and democratic norms, two sources familiar with the matter said.
The decision reflects a US desire to continue security co-operation as well as frustration with Cairo’s stance on civil liberties, notably a new law regulating non-governmental organisations widely seen as part a growing crackdown on dissent, said the sources, who spoke on condition of anonymity.
US officials were especially unhappy Egyptian President Abdel Fattah al-Sisi allowed the NGO law to go into effect in May. Human rights groups and activists said it effectively bans their work and makes it harder for charities to operate.
Egyptian officials assured US officials earlier this year the law, which restricts NGO activity to developmental and social work and introduces jail terms of up to five years for non-compliance, would not go through, the sources said.
Spokespeople for the White House and the State Department were not immediately available for comment.
Egypt is an important Mid-east partner for the United States because of its control of the Suez Canal and its border with Israel.
The sources said the administration had decided to “re-programme” $65.7 million in fiscal year 2017 Foreign Military Financing funds (FMF) and $30 million in fiscal year 2016 Economic Support Fund (ESF) funds. “Re-programming” means these funds would be used for other purposes and would not go to Egypt.
The administration made a separate decision to withhold $195 million in fiscal year 2016 Foreign Military Financing funds which, had it not acted, would have expired and ceased to be available at the end of the current fiscal year on September 30.
The second decision illustrated the administration’s ambivalence towards Egypt.
Under US law, the administration is required to withhold 15%, or $195 million, of the $1.3 billion it gives Egypt annually in FMF funds unless it can certify Cairo is making progress on advancing human rights and democracy. The administration can issue a national security waiver allowing the funds to go through.
This year, the administration again decided it could not certify Egyptian progress on rights and chose to issue the national security waiver but is still withholding the $195 million.
That money now goes into an account pending Egyptian improvement on human rights and democracy. This means Egypt could eventually get the money if its record on democracy and civil liberties improves.
“Strengthened security co-operation with Egypt is important to US national security,” said one source, adding Secretary of State Rex Tillerson felt “it was in the interests of the US to exercise the waiver.”
“We remain concerned about Egypt’s lack of progress in key areas, including human rights and the new NGO law,” the source said.
Egyptian rights activists said they face the worst crackdown in their history under Sisi, accusing him of erasing freedoms won in the 2011 Arab Spring uprising that ended Hosni Mubarak’s 30-year rule.
Egyptian lawmakers said the NGO law was needed to protect national security. The Egyptian government has long accused human rights groups of taking foreign funds to sow chaos and several are facing investigation over funding.