Egyptian activists who worked with civil society groups stand inside a cage during their trial in Cairo on February 26 2012.
The sentences follow trials which came in the wake of raids in 2011 on the offices of foreign non-governmental organisations, many which had operated without licences under ousted president Hosni Mubarak but which the new authorities deemed were receiving funds illicitly.
The Cairo criminal court sentenced 27 defendants in absentia to five years.
Five defendants who were present in the country, including one American, were sentenced to two years behind bars and ordered to pay a fine of 1 000 Egyptian pounds (around $143.)
The remaining 11 defendants were each given one-year suspended sentences. The court also ordered the permanent closure of the branches of the NGOs where the staffers worked.
These include US-based NGOs Freedom House, the International Republican Institute and the National Democratic Institute, as well as the German Konrad Adenauer Foundation.
The defendants, who were charged with receiving illicit foreign funds and operating without a licence, have said they will appeal the sentences.
Last year's crackdown on foreign NGOs led to a crisis in relations between Egypt and Washington, which Cairo had tried to defuse by allowing some of the NGO activists, mainly foreigners, to leave the country.
Until then, Washington had hinted that trying the activists could jeopardise its more than one billion dollars in annual aid to Egypt, much of it to the military.
The verdict comes as Egypt debates a new law regulating NGOs that has been fiercely criticised by civil society groups.
Draft NGO law
"Today's Egypt NGO verdict– an unjust verdict based on an unjust law, and the new draft NGO law would not produce a different outcome," said Sarah Leah Whitson, executive director for the Middle East and North African Division of Human Rights Watch.
President Mohamed Morsi, who referred the Bill to the Islamist-dominated senate last week, pledged that he "does not aspire to control civil society," in a departure from Mubarak's strongman tactics.
Morsi, once a political prisoner under Mubarak and leader of the formerly banned Muslim Brotherhood, has insisted that he must reform a corrupt inherited bureaucracy and instil transparency.
His aides say that the NGO Bill was drafted in that spirit.
But many NGOs, already wary of the Islamist president, say it is an attempt to assert control over the foreign funding of projects such as human rights advocacy.
The draft law will create a steering committee, headed by the social affairs minister, that must approve requests for foreign funding.
It will be able to turn down the requests from NGOs if it deems a project illegal. Foreign funding, for example, may not be used for political campaigning.
The draft law would "curb the right to freedom of association through legal restrictions even more severe than those imposed by the Mubarak regime," said a statement signed by 40 NGOs.
Response
Western powers such as the United States, a major funder of NGOs in Egypt, are closely monitoring the issue.
In a statement, the US State Department said it was "concerned" by the civil society draft law which "imposes significant government controls and restrictions on the activities and funding of civic groups".
"The United States believes the proposed law is likely to impede Egyptians' ability to form civic groups that are critical to advancing freedoms, supporting democracy, and acting as appropriate checks on the government," it said.
EU Foreign Policy chief Catherine Ashton said she "fears that the draft law still contains elements that can unnecessarily constrain the work of NGOs in Egypt and hinder our capacity as a foreign donor to support their work".
"The draft law has to be in line with international standards and obligations of Egypt," she said. – AFP