S. 1780, the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018, allocates up to $1 billion in FY2018 FMF for Egypt, while stipulating that 25% of that amount (as opposed to 15% in previous annual appropriations legislation) shall be withheld until the Secretary of State certifies and reports to the Committees on Appropriations that the Government of Egypt is taking effective steps to advance democracy and human rights in Egypt. A waiver for this certification is included in the bill. H.R. 3362, the House version of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018, would provide $1.3 billion in FMF to Egypt. The bill does not include a withholding of FMF or certification requirement. It does require the Secretary of State to consult with appropriators "on any plan to restructure military assistance for Egypt."

President Sisi is standing for reelection in Egypt's upcoming March 26-28 presidential election against a relatively unknown politician (Mousa Mostafa Mousa) who, before his last-minute candidacy was announced, was on record as a Sisi supporter.⁶

Several candidates either withdrew from the race or were forced to withdraw after facing possibly politically motivated criminal charges. Two prominent, Mubarak-era military leaders, Ahmed Shafik (Shafiq) and Lieutenant General Sami Anan, were considered as potential challengers to the president. General Anan, a former chief of the general staff of the armed forces, was arrested three days after declaring his candidacy in January 2018 for breaching the laws of military service by failing to seek the military's permission before declaring his candidacy. Shafik, a former air force general, prime minister, and runner-up in the 2012 presidential election, withdrew from the race in late 2017 after authorities threatened him with allegations of corruption and sexual misconduct.⁷ Both men may have garnered some support from within the military and intelligence establishment, as well as from the private sector. The withdrawal/arrest of Anan and Shafik follows President Sisi's recent high-profile dismissals of top military and intelligence officials, suggesting that Sisi may be trying to further consolidate his position within the vast but opaque national security establishment.⁸

With no significant opposition to President Sisi's reelection bid, some have questioned whether Egypt's upcoming election can count as free and fair. A coalition of opposition parties and figures is calling for a boycott of the election using the slogan "stay at home" in order to depress turnout and delegitimize Sisi's rule. On January 23, 2018, Senator John McCain issued a press release concerning Egypt's upcoming election, noting the following:

The 2018 presidential elections offer an important opportunity for the Government of Egypt to include citizens in the political process and reopen the public sphere for real discussion and debate. All candidates for public office should have equal opportunity, including access to media and public space for campaigning. Instead, a growing number of presidential candidates have been arrested and forced to withdraw, citing a repressive climate and fear of further retribution. Without genuine competition, it is difficult to see how these elections could be free or fair.⁹

That same day, U.S. State Department spokesperson Heather Nauert remarked that "We support a timely and credible electoral process and believe it needs to include the opportunity for citizens to participate freely in Egyptian elections. We believe that that should include addressing restrictions on freedom of association, peaceful assembly, and also expression."¹⁰

In 2017, Egypt's economy grew at a modest rate of just over 4%,²¹ and benchmarks for 2018 are trending positively.²² Since the flotation of the currency and the signing of a three-year, $12 billion IMF loan in November 2016, Egypt's macroeconomic picture has stabilized despite high consumer inflation that has engendered public discontent, but not unrest.²³ The government has increased public salaries and pensions in an effort to ease austerity measures. Sectors such as energy, construction, and tourism grew steadily in 2017. In December 2017, an Egyptian and Italian partnership began commercial output from the Zohr natural gas field, the largest ever natural gas field discovered in the Mediterranean Sea.²⁴ Over time, increased natural gas production is expected to reduce Egypt's dependence on imports.

According to the Economist Intelligence Unit, tourism grew by 3.9% during Egypt's last fiscal year, compared to a 28.5% contraction the year before, and the resumption of direct Russian flights to Egypt is expected to further boost the hospitality sector.²⁵ By late December 2017, Egypt's foreign exchange reserves had risen to $37 billion, a slightly higher return to its pre-2011 level. Over the long term, Egypt's fiscal picture remains a concern, though the IMF noted in January 2018 that Egypt had lowered its fiscal deficit. Overall, Egypt's gross debt is 91.3% of GDP, of which 74.6% is domestic and 16.7% is external.²⁶

In 2017, Egypt resumed previous attempts at forging greater Palestinian unity between Hamas (which controls the Gaza Strip) and Fatah (which controls the West Bank via the Palestinian Authority, or PA). Egypt sponsored Palestinian reconciliation talks and has backed a greater role in Gaza for former Fatah security chief Muhammad Dahlan.³⁹

In late 2017, the leading Palestinian factions took tentative steps toward more unified rule. In October, after days of negotiations in Cairo facilitated by then-head of Egyptian General Intelligence Khaled Fawzy, Hamas and the Fatah-led PA reached an agreement for the PA to assume greater administrative control over Gaza. The PA gained at least nominal control of Gaza's border crossings with Israel and Egypt in November, though it is unclear if a larger handover of control will take place, or whether the unity agreement—like similar agreements since 2007—will remain unimplemented.⁴⁰

Egypt's new approach toward Gaza appears to have had some limited success. According to one report, "as Egypt opened the border with Gaza more frequently this summer [2017], Hamas provided information to Egypt about Islamist militants who were fighting alongside the Islamic State in Sinai."⁴¹ As Hamas has engaged the Palestinian Authority in unity talks under Egyptian auspices, its relationship with Sinai-based terrorist groups such as SP has become adversarial. In January 2018, SP released a video calling on its supporters to attack Hamas.⁴²

President Sisi has come under repeated international criticism for an ongoing government crackdown against various forms of political dissent and freedom of expression. Certain practices of Sisi's government, the parliament, and the security apparatus have been contentious, including the following:

• the use of mass trials to prosecute political activists on criminal charges, without individual due process;
• the passage of an antiprotest law that infringes upon peaceful assembly;
• police brutality, the apparently deliberate use of torture by security forces, and reported enforced disappearances of political opponents;
• the use of criminal prosecutions, travel bans, and asset freezes against human rights defenders; and
• the passage of Law 70 of 2017 on Associations and Other Foundations, which institutes restrictions on Egyptian nongovernmental organizations (NGOs) and makes violations subject to criminal prosecution.

According to the State Department, "the most significant human rights problems [in 2016] were excessive use of force by security forces, deficiencies in due process, and the suppression of civil liberties."⁴³ Extrajudicial killings by police forces are alleged to have increased in 2017.⁴⁴

Some uncertainty remains over the status of the law's implementation. After a visit to the United States by a group of Egyptian lawmakers in fall 2017, one parliamentarian remarked that, "As we know, the executive regulations of the new NGO law—which was passed by parliament in November 2016—have not yet been issued and so the law has not gone into implementation."⁴⁶ In some cases, plaintiffs have successfully litigated against the state at the Supreme Constitutional Court, raising the possibility that those in opposition to perceived repressive new Egyptian legislation, such as the NGO law, could file suit.⁴⁷ The provisions in the law nonetheless are likely to have a chilling effect on civil society activism in Egypt, as do the still-active criminal charges imposed against U.S. and Egyptian employees of several U.S.-based democracy-promotion organizations (see below).

In September 2017, several audience members at a musical performance in Cairo raised rainbow flags, a symbol of lesbian, gay, bisexual, and transgender or LGBT pride. Images of the flags spread on social media, leading Egyptian government officials and religious figures to publicly condemn homosexuality as a threat to Egyptian society.⁴⁸ In the days and weeks following the concert, dozens of Egyptians were arrested. In November 2017, a court in Cairo found 14 individuals guilty of "inciting debauchery" and "abnormal sexual relations." Under current Egyptian law, openly identifying as homosexual is not explicitly a crime, though state prosecutors have used a 1961 prostitution law (prostitution law number 10 of 1961) to charge people suspected of engaging in consensual homosexual conduct with "habitual debauchery."⁴⁹ A 2014 report by the Law Library of Congress notes that under Egypt's penal code, homosexuality is punished as a "scandalous act," with detention for up to one year and/or a fine of up to 300 EGP (about US$43).⁵⁰

Some Egyptian lawmakers have proposed legislation to criminalize same-sex sexual activity. According to Amnesty International, a proposed bill would "define homosexuality for the first time and sets harsher penalties of up to five years imprisonment—or even up to 15 years if a person is convicted on multiple charges under different provisions of the law.... If passed, this law would further entrench stigma and abuse against people based on their perceived sexual orientation."⁵¹ In November 2017, Minority Leader of the United States House of Representatives Nancy Pelosi wrote a letter to Egyptian Speaker of the House Ali Abdel Aal Sayyed Ahmed calling on him to "denounce the ongoing assault on civil liberties in Egypt, and in particular condemn this law and these attacks on the LGBT community. We call on you to facilitate the release of the innocent LGBT men, women and allies who still languish in jail."⁵²

For years, the minority Coptic Christian community in Egypt has called for equal treatment under the law, asserting that its adherents face professional and social discrimination while the community as a whole is subject to occasional sectarian attacks by citizen vigilantes and terrorist groups. An additional area of concern for Coptic Christians has been state regulation of Coptic Church construction. Coptic Christians have long demanded that the government reform long-standing laws (some dating back to 1856 and 1934 respectively) on building codes for Christian places of worship, which many contend are overly restrictive.

Article 235 of Egypt's 2014 constitution mandates that parliament reform these building code regulations. In 2016, Parliament approved a new church construction law (Law 80 of 2016), that expedited the government approval process for the construction and restoration of Coptic churches, among other structures. Although Coptic Pope Tawadros II welcomed the law,⁵³ others claim that it continues to be discriminatory. According to Human Rights Watch, "The new law allows governors to deny church-building permits with no stated way to appeal, requires that churches be built 'commensurate with' the number of Christians in the area, and contains security provisions that risk subjecting decisions on whether to allow church construction to the whims of violent mobs."⁵⁴

President Trump has sought to improve U.S. relations with Egypt, which were perceived as strained under President Obama.⁶¹ Overall, President Trump has emphasized the importance of partnering with Arab leaders seen by many observers as autocratic in order to combat transnational terrorism, contain Iran, and pave the way for resuming Israeli-Palestinian peace negotiations. As part of the Administration's de-emphasis on pressing its partners for democratic reforms, President Trump stated in a May 2017 speech that "We are adopting a principled realism, rooted in common values and shared interests.... Our partnerships will advance security through stability, not through radical disruption."⁶² Nevertheless, Administration officials have raised concerns about Egypt's new NGO law (see above) and the continued detention of American citizens in Egypt (see below).

One discernable difference between the Trump and Obama Administrations has been the frequency of U.S.-Egyptian high-level dialogue. In 2017, Presidents Trump and Sisi interacted frequently, personally meeting three times and conducting five official phone calls.⁶³ According to official readouts of their meetings, both sides focused on an array of bilateral issues, including Egypt's role in facilitating Palestinian reconciliation, the continuation of U.S. foreign assistance to Egypt, and the possible expansion of U.S.-Egyptian trade and investment.

In early 2017, the United States signaled a willingness to resume U.S. participation in Exercise Bright Star, a biennial multinational military training exercise cohosted by the United States and Egypt that helps foster the interoperability of U.S. and Egyptian forces and provides specialized training opportunities for CENTCOM in the Middle East.⁶⁴ In February 2017, General Joseph L. Votel, Commander of the United States Central Command, remarked that "It is my goal to get that exercise back on track and try to re-establish that as another key part of our military relationship."⁶⁵ In September 2017, an estimated 200 U.S. soldiers participated in Bright Star 17 at Mohamed Naguib Military Base in Egypt, where U.S. and Egyptian forces conducted battle simulations involving U.S.-origin major defense equipment, such as Egyptian F-16s and M1A1 Egyptian tanks.⁶⁶ This marked the first time since October 2009 that the United States participated in Exercise Bright Star. In 2011, Bright Star was cancelled following the "Arab Spring" uprising. In 2013, a day after the Egyptian military and police launched a crackdown against the Muslim Brotherhood, President Obama suspended U.S. participation in Bright Star.

The detention of American citizens in Egypt has continued to be an issue in U.S.-Egyptian relations under the Trump Administration. In April 2017, Egypt released detained Egyptian-American aid worker Aya Hijazi, who, along with her husband, had been imprisoned pretrial for nearly three years. After she returned to the United States, President Trump hosted Ms. Hijazi in a ceremony at the Oval Office. He later claimed that the government of Egypt had complied with his request for her release, asserting that he succeeded where the former Administration had failed.⁶⁷

On January 20, 2018, Vice President Michael Pence traveled to Egypt and met with President Sisi to discuss various issues in bilateral relations, including Egypt's detention of two American citizens.⁶⁸ According to the Vice President, "I raised specifically the situation for two Americans who are currently being held, imprisoned here in Egypt—Ahmed Etwiy and Mustafa Kassem—who have been imprisoned here since 2013. And President Al Sisi assured me that he would give that very serious attention in both cases."⁶⁹

During summer 2017, the Trump Administration took various steps toward reducing U.S. foreign military and economic assistance to Egypt, reportedly out of U.S. concern over Egypt's new legal restrictions on nongovernmental organizations (NGOs) and its reported ties to the Democratic People's Republic of Korea (DPRK, or North Korea). On July 5, 2017, President Trump called President Sisi and, according to a White House readout, "discussed the threat from North Korea," with President Trump stressing "the need for all countries to fully implement U.N. Security Council resolutions on North Korea, stop hosting North Korean guest workers, and stop providing economic or military benefits to North Korea."⁷⁰ The President's focus on Egyptian-North Korean cooperation could relate to allegations that Egypt may have violated various United Nations-imposed sanctions on trade with North Korea as well as a prohibition on arms transactions with North Korea.⁷¹

On August 22, 2017, various news sources reported that the Trump Administration, having felt (in the words of one unnamed official) "blindsided" by President Sisi's approval of the new NGO law, planned to take several actions regarding U.S. foreign assistance to Egypt.⁷² Various outlets characterized these actions as a delay or diversion of up to $300 million in U.S. foreign assistance. The following is a summary of the Administration's actions.

• Waiver Issued. In August, Secretary of State Rex Tillerson issued the national security waiver contained in Section 7041(a)(3)(B) of P.L. 114-113, the Consolidated Appropriations Act, 2016. This waiver allows $195 million in withheld FY2016 Foreign Military Financing (FMF) funds (out of a total of $1.3 billion appropriated) to be obligated without the Secretary having to certify whether the government of Egypt is taking several steps to advance democracy and human rights. The United States and Egypt may now use these funds (which would have expired October 1, 2017) to sustain prior purchases of major U.S. defense equipment, though according to the State Department, rather than being immediately available for Egypt, the $195 million will be held in reserve until the Administration sees progress on democracy in Egypt. An Associated Press story notes that when the Secretary of State issued the waiver on August 22, he also submitted a congressionally mandated report to the appropriations committees detailing the justification for the waiver, including how Egypt is failing to protect free speech, investigate abuses by its security forces, or grant U.S. monitors access to the Sinai Peninsula.⁷³ The State Department has declined requests from human rights groups to make the report public.
• Intention to repurpose $65.7 million in FY2017 FMF. The Administration also plans to redirect $65.7 million in FMF for Egypt elsewhere. This action is tied to an informal hold placed on FY2014 FMF by Senator Patrick Leahy over his reported objections to the Egyptian government's human rights conduct and its use of U.S.-supplied military equipment in counterterrorism operations in the Sinai.⁷⁴ Since the State Department has determined that FY2014 FMF to Egypt can no longer be repurposed, it reportedly intends to redirect $65.7 million in FY2017 FMF for Egypt.
• Obligating $155.635 million in Economic Aid. On August 23, 2017, the United States Agency for International Development (USAID) notified Congress of its intent to obligate a total of $155.635 million in Economic Support Fund (ESF) aid for Egypt. This obligation is comprised of ESF funds from various fiscal years, of which $111.75 million would come from FY2016 Overseas Contingency Operations (OCO) funds. In FY2016, Congress appropriated "up to" $150 million in FY2016 ESF for Egypt, though it appears that the Administration has indicated that it will not obligate the full $150 million for FY2016. One report suggests that USAID may reprogram $20 million in FY2016 ESF for Egypt to support water programs in the West Bank.⁷⁵

For FY2018, the President is requesting a total of $1.38 billion in foreign assistance for Egypt, nearly all of which would come from the FMF account. The $75 million FY2018 Economic Support and Development Fund (ESDF) request for Egypt is well below prior year appropriations, and Egypt has not received less than $100 million in U.S. economic assistance since the late 1970s.

As Congress considers FY2018 assistance to Egypt, one question is whether the Trump Administration is prepared to reverse or otherwise modify the 2015 Obama Administration decision to phase out cash flow financing and limit the use of FMF to only counterterrorism, border security, Sinai Peninsula security, and maritime security programs.⁷⁷ Successive Administrations have used cash flow financing to permit Egypt to set aside almost all FMF funds for current year payments only, rather than set aside the full amount needed to meet the full cost of multiyear purchases.⁷⁸ During the 2015-2018 phaseout of cash flow financing, Egypt has made several purchases of major defense equipment from non-U.S. suppliers, including Russia (see above) and France.⁷⁹

Prior to President Sisi's visit to the United States in spring 2017, there had been some speculation that the Trump Administration could reverse the previous Administration's phaseout of cash flow financing. According to one senior White House official in March 2017, "We'll discuss with Egypt whether cash-flow financing is something they need or not, but it is also something that would be a process of our internal budget discussions that are ongoing. So we can't really get ahead of the budget planning now."⁸⁰ Several months later, during a June 2017 hearing before the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade, Vice Admiral Joseph Rixey, the Director of the Defense Security Cooperation Agency, noted that cash flow financing authority for Egypt had been phased out by the previous administration. He added, "that was removed. Now we will not execute a [foreign military sale] case until the cash is there....That policy is still in place."⁸¹

While critics of Egypt's human rights record have opposed a reinstatement of cash flow financing to Egypt, others have suggested that it could be restored under certain conditions.⁸² According to David Schenker, an expert on Arab politics at The Washington Institute and reportedly a potential nominee for Assistant secretary of State for Near Eastern affairs, "Washington could reinstitute cash flow financing, which was scrapped in 2015 after the military coup, but only for equipment that the U.S. Department of Defense deems related to counterterrorism and border security operations."⁸³ Under cash-flow financing arrangements, Foreign Military Sales (FMS) cases for Egypt were undertaken before being fully funded in anticipation of additional appropriations in future years. P.L. 115-31 requires the Secretary of State to report to the committees on appropriations on any plan to restructure U.S. military assistance for Egypt, including a description of any planned modifications regarding the procurement of military equipment.

Lawmakers may continue to influence the nature of the evolving U.S.-Egyptian bilateral relationship either through the appropriations process or through regular congressional oversight.

Egypt's poor human rights record has sparked regular criticism from U.S. officials and some Members of Congress. During a 2017 Senate Appropriations Subcommittee on State, Foreign Operations and Related Programs hearing on U.S. assistance to Egypt, Subcommittee Chairman Senator Lindsey Graham remarked, "I really worry about a consolidation of power that is basically undemocratic."⁸⁴ During that same hearing, other witnesses were critical not only of Egypt's human rights record, but of the totality of U.S.-Egyptian relationship.⁸⁵

Since FY2012, Members have passed appropriations legislation that withholds the obligation of Foreign Military Financing (FMF) to Egypt until the Secretary of State certifies that Egypt is taking various steps toward supporting democracy and human rights. In the 115^th Congress, S. 1780, the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018, would allocate up to $1 billion in FY2018 FMF for Egypt, while stipulating that 25% of that amount (as opposed to 15% in previous annual appropriations legislation) shall be withheld until the Secretary of State certifies and reports to the Committees on Appropriations that the Government of Egypt is taking effective steps to advance democracy and human rights in Egypt. A waiver for this certification is included in the bill. H.R. 3362, the House version of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018, would provide $1.3 billion in FMF to Egypt. It would also permit FMF to be transferred to an interest-bearing account in the Federal Reserve Bank of New York. The bill does not include a withholding of FMF or certification requirement, but it requires the Secretary of State to consult with appropriators "on any plan to restructure military assistance for Egypt."

H.R. 3219, the Make America Secure Appropriations Act, 2018 (passed in the House on July 27, 2017), would make Defense Department appropriations available from the "Counter-Islamic State of Iraq and the Levant Train and Equip Fund" to Egypt for border security to counter the Islamic State of Iraq and the Levant and their affiliated or associated groups.

H.Res. 113—Among other things, calls for the President to reinstate cash flow financing (CFF) to Egypt in 2018, and afterward.

H.Res. 673—Among other things, urges the Government of Egypt to "enact serious and legitimate reforms to ensure Coptic Christians are given the same rights and opportunities as all other Egyptian citizens."

S.Res. 108—Among other things, urges the President of the United States and the Secretary of State to "engage the Egyptian Government on new ways to advance the bilateral relationship economically, militarily, diplomatically, and through cultural exchanges, while ensuring respect for the universal rights of the Egyptian people."

S. 68 (H.R. 377 in the House)—The Muslim Brotherhood Terrorist Designation Act of 2017 would require, not later than 60 days after the date of the enactment, that the Secretary of State, in consultation with the intelligence community, submit a detailed report to Congress indicating whether the Muslim Brotherhood meets the criteria for designation as a foreign terrorist organization under Section 219(a) of the Immigration and Nationality Act (8 U.S.C. 1189(a)). If the Secretary of State determines that the Muslim Brotherhood does not meet the criteria, the bill requires a detailed justification as to which criteria have not been met.

S. 266 (H.R. 754 in the House)—The bill requires that the Speaker of the House of Representatives and the President pro tempore of the Senate make appropriate arrangements for the posthumous award, on behalf of Congress, of a gold medal of appropriate design to Anwar Sadat in recognition of his achievements and heroic actions to attain comprehensive peace in the Middle East.

As the Trump Administration begins its second year in office, U.S. relations with Egypt seem poised to move beyond an introductory posture and toward routine engagement focused on a broad set of issues, such as the Israeli-Palestinian conflict and counterterrorism. Barring any major developments in the Israeli-Palestinian arena, the current relationship lacks any signature project that binds the United States and Egypt together. Moreover, as President Sisi continues his consolidation of power and as the economy slowly recovers, Egypt seems to be continuing to pursue a more independent foreign policy that seeks to balance its relationships with great power states, Western Europe, and the Arab Gulf monarchies. Some Egyptians have even speculated about relations with the United States being based less on shared interests and more on transactional considerations.⁸⁶

For U.S. policymakers and Members of Congress, Egypt may not be the Middle East region's top priority when compared to thwarting Iran and dealing with crises such as the conflict in Syria. Nevertheless, there are potential flashpoints worth considering. Terrorism within Egypt may continue, and it is unclear whether the Egyptian government is willing to work more closely with the U.S. military and adjust its counterterrorism doctrine to more effectively confront nonstate actors such as SP. Egypt also is embroiled in regional disputes with Nile Basin countries, such as Ethiopia, which is nearing completion on the $4.2 billion Grand Ethiopian Renaissance Dam, a major hydroelectric project which Egypt believes will cut its share of the Nile once the dam is filled. In Gaza, while Egypt has played a positive role, further reconciliation between Hamas and the Palestinian Authority is stalled. Should another Israel-Hamas confrontation occur, Egypt would invariably be looked to as mediator.

U.S. economic aid to Egypt is divided into two components: (1) USAID-managed programs (public health, education, economic development, democracy and governance); and (2) the U.S.-Egyptian Enterprise Fund. Both are funded primarily through the Economic Support Fund (ESF) appropriations account.

For FY2017, USAID estimates that of the $155.6 million in ESF it has obligated for Egypt, an estimated $7 million will be directed toward democracy, good governance, human rights, and political competition; $48 million for basic and higher education; $30 million for the Egyptian-American Enterprise Fund (EAEF); and the remaining funds for various economic development, trade, macroeconomic growth, agriculture, private sector competitiveness, and water programs.¹⁰⁰ Aside from the EAEF, USAID's Higher Education Initiative (HEI) has received the most programmatic ESF assistance from USAID for Egypt since 2011.

U.S. funding for democracy promotion activities and good governance has been a source of acrimony between the United States and Egypt for years. Though the two governments have held numerous consultations over the years regarding what Cairo might view as acceptable U.S.-funded activities in the democracy and governance sector, it appears that the sides have not reached a consensus. Using the appropriations process, Congress has acted to ensure that "democracy and governance activities shall not be subject to the prior approval by the government of any foreign country."

Democracy assistance implementers face severe barriers to operating openly in Egypt. In 2013, an Egyptian court convicted and sentenced 43 people, including employees of the National Democratic Institute (NDI) and the International Republican Institute (IRI), for allegedly spending money on behalf of organizations that were operating in Egypt without a license. In response, in annual aid appropriations measures, Congress has placed conditions on U.S. economic assistance. Most recently, Section 7041(a)(2)(B) of P.L. 115-31, the Consolidated Appropriations Act, 2017, mandates that the Secretary of State withhold an amount of Economic Support Fund (ESF) to Egypt determined to be equivalent to that expended by the United States Government for bail, and by nongovernmental organizations for legal and court fees associated with democracy-related trials in Egypt until the Secretary certifies that Egypt has dismissed the convictions issued by the Cairo Criminal Court on June 4, 2013.

To the extent that USAID continues to fund democracy and governance programs for Egypt, most programs fund Egyptian government activities rather than those of civil society. The agency notified Congress in August 2017 that it intends to support the following programs with FY2016 ESF (OCO) and Democracy Fund funds:¹⁰¹

• $1.3 million to support the Government of Egypt's Ministry of Investment efforts to eliminate conflicting and obsolete investment regulations in order to help reduce corruption.
• $2.0 million to support the Egyptian Ministry of Justice to enhance technical judicial capacity in economic courts.
• $1.7 million to support the High Elections Committee to increase voter awareness, improve administration of electoral processes, and expand public understanding and participation. The implementing partner is the International Foundation for Electoral Systems (IFES).
• $1.0 million to address gender-based violence (GBV) in Egypt by supporting activities such as awareness campaigns and community level mentoring to empower women and girls. The implementing partner is UN Women.
• $1.0 million in FY2016 (DF) to address violence against girls, including female genital mutilation (FGM). Activities could include outreach to improve knowledge of the harm that practices such as FGM, early marriage, and domestic violence bring to children. They could also provide lawyers, advocates, and civil society organizations with tools to combat such practices.

In reaction to the political upheaval and economic dislocation that swept across the Arab world beginning in late 2010, the Obama Administration and Congress considered how best to support Arab citizens demanding political and economic change. After popular uprisings unexpectedly unseated authoritarian governments in Tunisia and Egypt in early 2011, the Administration and Members of Congress debated the appropriate types, scope, and scale of U.S. "transition" assistance. They found common support for the use of enterprise funds, which are private-sector entities funded by the U.S. government whose purpose is to promote the development of the private sector in foreign countries. They achieve this goal through a range of assistance instruments, including equity investments, microcredit lending, technical assistance to entrepreneurs, leveraging of private sector investment capital, and other means. Shared support for enterprise funds stemmed, in part, from a sense that socioeconomic grievances—such as high unemployment, bureaucratic red tape, and high-level corruption—were potent drivers of regional unrest.

In May 2011, then-President Obama laid out his Administration's initial response to the so-called "Arab Spring" by remarking that U.S. officials are "working with Congress to create Enterprise Funds to invest in Tunisia and Egypt. And these will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall."¹⁰² In December 2011, Congress authorized the establishment of enterprise funds in Tunisia and Egypt (P.L. 112-74, Division I, §7041(b)).¹⁰³