By Carol Morello | Washington Post

The State Department is withholding $195 million in military aid for Egypt and has completely withdrawn almost $96 million in other aid for the impoverished country as a sign of displeasure over human rights concerns and a new law placing strict restrictions on aid groups working in the country.

Secretary of State Rex Tillerson, who signed papers related to the funding earlier this week, notified Egyptian Foreign Minister Sameh Shourky of the decision in a phone call Tuesday, according to State Department officials who spoke on the condition of anonymity about the internal discussion.

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The largest chunk of funding is $195 million in military aid, which is supposed to help Egypt fight domestic security threats and fight terrorism. That unspent money would be returned to Congress at the end of the fiscal year, in another month. Instead, Tillerson authorized it to be put in a separate account and held in reserve until Egypt shows some progress on “key priorities” like human rights abuses and the new law that many nongovernmental organizations say makes their charity work illegal. Egypt should get the money eventually, the officials said.

In separate action authorized by Tillerson, the administration decided to take away from Egypt another $65.7 million in military aid and $30 in economic aid, and give it to other countries instead. The new recipients have not been determined yet.

“We wanted to send the message we’re not happy at the lack of progress in human rights and the NGO law,” a State Department official said. “We want to see improvements.”

U.S. officials, whenever they have met with their Egyptian counterparts, have for a long time made a point of mentioning their concerns about human rights abuses in Egypt. They were particularly worried about the impact of the NGO law passed by parliament late last year and ratified in late May by President Abdel Fatah al-Sissi.

The new law gives the government power to decide who can establish an NGO and what kind of work they do. It also requires that donations of more than about $550 be preapproved. Failure to inform the government in a timely fashion potentially carries penalties of up to five years in jail and $55,000.

Many rights groups say the law in effect prohibits them from doing their job, because it bans them from engaging in anything deemed harmful to national security, public order or morals – a vague definition that they say is intended to stifle dissent.

The government has accused human rights groups of trying to undermine the social order, and some are being investigated over the source of their funds.

A State Department official said the United States believed Egypt had in effect made a promise earlier this year that the law would never take effect. When Sissi signed it, diplomats believed they had been misled.

Egypt has been the second largest recipient of U.S. aid since it signed a peace treaty with Israel in 1979. It has received $80 billion in military and economic aid over the past 30 years. In 2013, President Barack Obama froze the supply of military equipment after the Egyptian army overthrew President Mohamed Morsi. When aid was resumed, Congress required that the secretary of state certify that Egypt was making progress in governing democratically.