update deskIsrael-Palestinian Conflict

Smotrich OKs $116m transfer to Palestinian Authority

The decision was reportedly made as a tradeoff for Netanyahu's approval to legalize several outposts and approve building in Judea and Samaria.

Israeli Finance Minister Bezalel Smotrich in Jerusalem, May 30, 2023. Photo by Yonatan Sindel/Flash90.
Israeli Finance Minister Bezalel Smotrich in Jerusalem, May 30, 2023. Photo by Yonatan Sindel/Flash90.

Israel has transferred 435 million shekels ($116 million) in frozen tax revenues to the Palestinian Authority following the approval of Finance Minister Bezalel Smotrich, Jerusalem confirmed on Wednesday.

The decision to transfer the funds was allegedly made last week as a tradeoff for Prime Minister Benjamin Netanyahu’s approval to legalize several outposts and approve new construction in Judea and Samaria.

The supposed quid pro quo also saw Smotrich extend a waiver shielding Israeli banks with ties to Ramallah from lawsuits stemming from charges of supporting terrorism, preventing the P.A. economy’s collapse.

Earlier this week, Smotrich described his moves in Judea and Samaria as a “massive operation aimed at thwarting a Palestinian state.” The Religious Zionism Party leader previously accused Ramallah of “working against Israel with political terrorism.”

Under agreements signed with the PLO in the 1990s, Israel collects taxes and customs duties on behalf of the P.A.

The frozen millions remitted to the Palestinian Authority this week amount to some three months of tax revenue, minus the sum earmarked for the Gaza Strip and funds withheld due to the P.A.’s support for terrorism.

Speaking at Ramallah’s weekly Cabinet meeting on Wednesday, P.A. Prime Minister Mohammad Mustafa claimed that the body’s diplomatic campaign led Jerusalem to release the funds. The P.A. leader vowed to push the Jewish state to transfer some 6 billion shekels ($1.6 billion).

On Nov. 2, although agreeing to send the revenue to the P.A., Israel’s Security Cabinet voted to freeze funds equivalent to those the P.A. sends to the Gaza Strip. The decision came at the insistence of Smotrich, who feared the money could end up in the hands of Hamas terrorists.

The decision prevents Gaza-earmarked monies from being sent to Ramallah “under any circumstances” unless approved by Smotrich.

In addition, Israeli law requires Jerusalem to offset funds equal to the annual 1 billion shekels ($268 million) that go towards the P.A.’s “pay for slay” program, under which it pays monthly stipends to terrorists and to the families of slain terrorists.

Since the Oct. 7 massacre in Israeli communities near Gaza, the P.A. has added thousands of Palestinians to its list of people who qualify to receive terror stipends, an Israeli watchdog reported in January.

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