Israel has transferred hundreds of millions of shekels to Ramallah that the Palestinian Authority uses to pay terrorist stipends violates Israeli law and contradicts statements by Defense Minister Benny Gantz. This is according to Israeli NGO Palestinian Media Watch’s analysis of an official P.A. report submitted to Western states.

Israel collects taxes on behalf of the P.A. as part of a mechanism outlined in the 1993 Oslo Accords. It then transfers the funds monthly to Ramallah. But in July 2018, Israel began deducting the amount that the P.A uses to pay terrorists after the Knesset passed a law to that effect. In the effort to discourage the Palestinian “pay for slay” practice, Jerusalem has frozen 1.3 billion shekels ($417.26 million) in tax funds since the law went into effect.

In September, Israel transferred 500 million shekels (around $160 million) to Ramallah, in addition to the tax funds it collects for the P.A. every month. The move followed a meeting between Gantz and P.A. leader Mahmoud Abbas at the end of August.

Soon after the meeting, the Coordinator of Government Activities in the Territories, the Israeli governing body that operates in the West Bank, clarified that the 500 million shekels had, in fact, been a loan. It said that the funds were an advance on future tax payments, and as a result, money would not be coming out of Israeli taxpayer’s pocket.

According to an English-language budget-performance report for the month of September, compiled as part of Ramallah’s commitment to transparency to donors and the international community, Israel transferred a total of 1.7 billion shekels (around $545 million) to the P.A. that month alone.

In the report’s appendices, the P.A. made note of the 500 million shekels that it received from Israel, but said that 100 million of those 500 million had been an advance on future payments, while the P.A. had been owed the other 400 million in payments from “previous months.”

According to Ramallah, then, Israel had not actually provided an advance on future tax funds as claimed, but rather transferred money that it owed the P.A. In other words, Ramallah made clear in the official report that it had no intention of repaying 80 percent of the funds that it received from Jerusalem.

The analysis is even more troubling when taking into account that, following Gantz’s meeting with Abbas, the P.A. claimed that the defense minister had agreed to return “some of our funds held by Israel.”

If the P.A.’s budget report is correct, the Israeli government has in effect transferred one-third of tax funds that it was legally required to withhold, despite Abbas’s continued payments to terrorists.

In a statement, Gantz said: “As previously stated, the loan was provided from future repayment funds that the Palestinian Authority was supposed to have received from Israeli tax collection.”

PMW founder and director Itamar Marcus said, “The dispute between Israel and the Palestinian Authority as to the nature of the 400 million shekels is unreasonable. Could it be that Israel transferred nearly half a billion shekels to the P.A. without a written agreement indicating it was a loan? Israel must demand that the P.A. correct the budgetary report to reflect that this is a loan.”

The P.A. routinely spends hundreds of millions of dollars on payments to terrorists imprisoned in Israel and to the families of terrorists killed while carrying out attacks against Israel. The PA’s “pay for slay” policy is a widely condemned practice that takes a growing cut of Ramallah’s budget—funded by donor countries in the West and the Arab world—every year.

“Pay for slay” has earned the P.A. scathing international criticism but Abbas has vowed to keep up terrorists’ payments, even it if bankrupts the P.A.

JNS contributed to this article, which first appeared in Israel Hayom.

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