Why is El Salvador’s President Bukele targeting foreign-funded nonprofits?

A new law, championed by President Nayib Bukele, is seen by advocates as an effort to stifle dissent in El Salvador.

Human rights groups, politicians and experts have sharply criticised a law approved by El Salvador’s Congress as a censorship tool, designed to silence and criminalise dissent by nongovernmental organisations critical of President Nayib Bukele.

The law proposed by Bukele bypassed normal legislative procedures and was passed on Tuesday night by a Congress under the firm control of his New Ideas party.

Bukele first tried to introduce a similar law in 2021, but after strong international backlash, it was never brought for a vote by the full Congress.

Bukele said the law is intended to limit foreign influence and corruption. It comes after the government took a number of steps that have prompted concerns the country may be entering a new wave of crackdowns. Critics warn that it falls in line with measures passed by governments in Nicaragua, Venezuela, Russia, Belarus and China.

Here are more details about the root of the criticism:

What does the law say?

Anyone — individual or organisation, local or foreign — who acts in the interest of a foreign entity or receives foreign funding to operate in El Salvador is required to register under the law.

Every payment, whether in cash, goods or services, made to such groups will be subject to a 30-percent tax. The final law passed does not specify how the money from the tax will be used.

While the United States also has a law that requires individuals working on behalf of foreign entities and governments to register, Bukele’s is far broader in scope and grants him greater powers. It is fairly common in poorer countries in Latin America to depend on international aid dollars, as it is often difficult to raise money in their own countries.

Analysts say a broad definition of a “foreign agent” in the law could cover:

• Human rights organisations
• Community associations
• Independent media outlets
• Foreign-funded startups or businesses
• Religious groups
• International aid agencies

New rules governing NGOs

The law creates a new government body called RAEX, or Registry of Foreign Agents, which will have wide powers, including setting requirements for registration, approving or denying applications, revoking or refusing to renew registrations and demanding documents or information at any time.

Some NGOs can apply for exceptions, but RAEX will decide who can operate in the country. About 8,000 NGOs operate in El Salvador and often depend on foreign donations due to a lack of funds available in the Central American nation.

Some of those groups have long been at odds with Bukele and have criticised some of his actions, including his decision to waive key constitutional rights to crack down on the country’s gangs and seeking re-election despite clear constitutional prohibitions.

The rules NGOs will have to adhere to the following:

• They must register with RAEX and report the source and purpose of all donations.
• They must keep complete accounting records, use the banks for transactions and follow anti-money laundering laws.
• They cannot operate without registering.
• They cannot engage in political activities or actions seen as threatening public order or national security.
• They cannot use foreign donations for undeclared activities or share information on behalf of foreign donors without labelling it as such.

Violations of the rules can lead to fines between $100,000 to $250,000 and possible closure.

Why now?

Critics say Bukele revived the law because he has now consolidated power across all branches of government. His political alliance with US President Donald Trump has also emboldened him.

Bukele announced the law shortly after a protest near his home ended in a violent crackdown by police that saw two people arrested.

In addition, it comes after a number of moves by Bukele that have raised concerns that the self-described “world’s coolest dictator” is cracking down on dissent.

• Just two days before the law passed, the government arrested an anticorruption lawyer with the human rights organisation Cristosal — one of Bukele’s most outspoken critics — on corruption charges.
• The government arrested the heads of bus companies for defying an order from Bukele posted on his social media.
• Journalists with the investigative news organisation El Faro said they had to flee the country after receiving word that the government was preparing orders for their arrest, after they published reports on the president’s links to gangs.

What are critics saying?

• Opposition legislator Claudia Ortiz called the law “an authoritarian tool for censorship“ and said it hands the president excessive levels of control. “It’s obvious that exemptions will only be given to groups that align with the government, while those who expose corruption or abuse will be punished,” she said.
• Lawyer Roxana Cardona of the NGO Justicia Social y Controlaría Ciudadana said: “The Foreign Agents Law seeks to suppress organisations that promote civic participation or support marginalised groups the state ignores.”
• Eduardo Escobar, director of Acción Ciudadana, added: “This is part of the government’s increasing repression. It affects constitutional rights like freedom of expression and freedom of association.”
• Lawyer and analyst Bessy Ríos said: “The goal is to control the funding of civil society, especially organisations critical of the government.”