The European Union is criticizing a new Israeli law that increases regulation of many human rights organizations, saying it risks "undermining" Israel's democratic ideals.

The law, passed late Monday, imposes new reporting requirements on nonprofit groups that receive more than half of their funding from foreign governments.

While its supporters say the law is meant to increase transparency, it applies almost exclusively to liberal groups that are critical of Israeli policies and often receive EU funding. More hawkish groups are largely exempt, since they tend to receive funding from wealthy private individuals.

In a statement Tuesday, the EU said the new law "seems aimed at constraining the activities of these civil society organizations working in Israel."

"Israel enjoys a vibrant democracy," it added. "This new legislation risks undermining these values."