NGOs blacklisted under the foreign agent law are turning down foreign funding, leading to a sharp drop in their numbers this year, President Vladimir Putinsaid Monday.

The 2012 foreign agent law requires non-governmental organizations that receive foreign funding to register as “foreign agents.” Critics say the law is a part of a broader effort to silence groups critical of the Kremlin’s human rights record.

“Their number has declined from 165 to 89. That’s just 0.39 percent of all NGOs registered in Russia,” Putin was cited by the state-run RIA Novosti news agency as saying at the Presidential Council for Civil Society and Human Rights.

Four times fewer non-profits were blacklisted in 2017 than the previous year, either because the “foreign agent” NGOs declined to engage in political activities or gave up foreign funding, he said.

“The NGOs are embarking on the second path fairly actively,” Putin said, pointing out that groundwork has been laid for them to receive state funding instead of utilizing funding from abroad.

Annual presidential grants for NGOs alone have grown by 22 billion rubles over the past 5 years, a sevenfold annual increase, he added.

The foreign agent law has faced criticism in the past for its imprecise phrasing, forcing many of the “foreign agents” grappling with the stigma of the Soviet-era styled label to either shut down or reshuffle operations.