Israel said set to transfer NIS 800m loan to PA to offset coronavirus losses
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Israel said set to transfer NIS 800m loan to PA to offset coronavirus losses

Finance Minister Kahlon reportedly says he was directed by PM to make fund available to cash-strapped Palestinian Authority; right-wing group decries ‘unthinkable’ transfer

Palestinian Authority President Mahmoud Abbas at his headquarters in the West Bank city of Ramallah on May 7, 2020. (Nasser Nasser/Pool/AFP)
Palestinian Authority President Mahmoud Abbas at his headquarters in the West Bank city of Ramallah on May 7, 2020. (Nasser Nasser/Pool/AFP)

Israel will reportedly begin transferring a loan of NIS 800 million ($228 million) to the Palestinian Authority on Sunday to help offset financial losses caused by the coronavirus pandemic.

The government notified the High Court of the transfer on Thursday, the Israel Hayom daily reported, saying the funds will be transferred in several installments over the coming months.

According to the report, Finance Minister Moshe Kahlon said Prime Minister Benjamin Netanyahu had directed him to provide the PA with the loan.

The move was said to be made in coordination with Defense Minister Naftali Bennett and National Security Adviser Meir Ben-Shabbat.

Palestinians shop while wearing protective masks amid the ongoing coronavirus pandemic in the West Bank city of Ramallah, on May 7, 2020. (Abbas Momani/AFP)

Israel collects customs duties and other taxes on behalf of the Palestinian Authority and transfers the funds to the Palestinians each month. These transfers cover a sizable chunk of the Palestinian government’s budget.

Over the last two years, Israel has deducted the amount the PA pays to Palestinians accused of terror offenses from the tax revenues it collects. Last year, the PA rejected all the tax transfers in protest, but it relented months later.

The right-wing advocacy group Lavi slammed the reported decision to transfer the funds to the PA as “unthinkable.”

“The transfer of close to NIS 1 billion to the Palestinian Authority for the purpose of paying terrorist salaries is unthinkable,” it told the newspaper.

On Thursday, a report said that at least one bank operating in the West Bank has blocked access to accounts of Palestinians convicted of terror offenses, days before an Israeli military decree imposing sanctions on banks for financially rewarding terrorism takes effect.

The move prompted the Palestinian Authority to form a committee to fight the Israeli measure and PA Premier Mohammad Shtayyeh said Friday an agreement had been reached with banks to unfreeze the accounts.

Many Palestinians who served time in Israeli prisons for terror offenses have complained in recent days that they have been unable to access their accounts to receive monthly stipends paid out by the Palestine Liberation Organization, and have been told to switch banks if they want to continue receiving them, the Haaretz daily reported Thursday.

Israel has long tried to clamp down on hundreds of millions of dollars in stipends paid out to Palestinians convicted of security offenses or the families of attackers, which it says encourages terror. Ramallah has vowed to continue the payments, describing them as a form of social welfare and compensation for what it claims is an unfair military justice system.

Palestinians receive their salary in one of the banks in Ramallah, West Bank on May 17, 2011. (Issam Rimawi/FLASH90)

The new military order, signed in February, applies substantial parts of Israel’s anti-terror law to the West Bank. The law states that any person or body handing financial aid to anyone, with the purpose being to facilitate, advance, fund or reward terror-related offenses, is committing a crime that carries a punishment of up to 10 years in prison and a fine.

Israel has previously deducted the presumed total worth of the stipends from tax revenues it collects on behalf of the PA, prompting a long standoff with Ramallah.

There are 13 banks operating in the West Bank areas ruled by the Palestinian Authority. Seven of them are Palestinian-owned, five are Jordanian and one is Egyptian.

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