Bulk of funds will be placed on reserve in government account, other money will be given to other US allies

The U.S. will not distribute $290 million in aid to Egypt over human rights concerns, a State Department official confirmed Tuesday.

The bulk of that sum -- $195 million in foreign military financing -- will be held in an account that can be accessed at any time, the official told Anadolu Agency on condition of anonymity because she was not authorized to discuss the matter publicly.

"These funds will be held in reserve until we see progress from Egypt on key priorities," the official said.

An additional $65.7 million in military aid and $30 million in economic aid will be reassigned to other key U.S. allies.

Driving the decision are Egypt's implementation of a controversial law restricting the work of non-governmental organizations (NGOs) in the country and a lack of progress in human rights, according to the official.

The administration has to certify to Congress that Egypt is making progress on advancing human rights and democracy in order to disperse Egypt's annual $1.3 billion in military aid or seek a waiver on national security grounds.

Egyptian President Abdel Fattah al-Sisi ratified the NGO law in May, vexing Washington, which had opposed its implementation over concerns that it would be another major blow to the country's civil society.

Under the law, NGO activity is strongly restricted, and noncompliance could result in a five-year prison term and thousands of dollars in penalties.

Cairo has repeatedly accused rights groups of working to foment unrest in the country.

Egypt is a vital U.S. ally, and Washington has provided the country with nearly $80 billion in military and economic aid over the past 30 years.

The country's peace agreement with Israel was a landmark development in the region, and Cairo's control of the Suez Canal is a major logistical asset. Egypt has become the second largest recipient of U.S. military aid after its peace deal with Israel.

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