Qatar and the Palestinian Authority have agreed on a broad framework to again transfer Qatari funds to the Gaza Strip, but Palestinian banks are holding up its implementation, a senior PA official said on Thursday.
“The agreement exists, but there are a number of difficulties posed by the banking system, which will take some investigation to solve,” PA minister Ahmad Majdalani told The Times of Israel, adding that he had signed the agreement with Qatar’s Gaza envoy, Mohammad al-Emadi.
Since 2018, Qatar has provided over $300 million in subsidies to Gaza, which is ruled by Doha’s Hamas clients. Israel allowed the funds into the tightly blockaded coastal enclave in exchange for quiet on its southern border.
The Qatari projects funded fuel for Gaza’s only power plant and hospitals to shore up the enclave’s damaged healthcare system. They also brought in hundreds of millions in cash payments to both 100,000 poor Gazan families and to Hamas’s civil servants.
Resuming the transfer of Qatari cash has emerged as a stumbling block in the ongoing negotiations to rebuild the Gaza Strip, now battered by the recent fighting between Israel and Hamas. Since the escalation, Israeli politicians have vowed that there will be no return to the status quo ante.
“We are also working on a solution that will allow humanitarian assistance to the residents of Gaza without suitcases full of dollars,” Prime Minister Naftali Bennett told the cabinet in July.
The tentative agreement revealed by Majdalani has prompted concern among Palestinian banks, which are said to be worried about being slapped with sanctions should their money go to Hamas. The international community largely boycotts the terror group and cracks down on financial institutions that deal with it.
A possible way around the sanctions would be to transfer the money through post offices in the Strip, instead of the banks, a recommendation that has been passed along to PA officials, a source familiar with the negotiations told The Times of Israel.
However, Palestinian Monetary Authority chief Firas Milhem said on Thursday that he had not been informed of any potential agreement for Qatar’s Gaza subsidies to be transferred by Palestinian banks.
In a thinly veiled reference to the potential sanctions for dealing with Hamas, Milhem said that Palestinian banks were required to follow international guidelines.
“The Monetary Authority and its banks are committed to applying the best international standards, especially know-your-customer rules,” Milhem said in a statement.
According to Majdalani, Qatar has informed Israeli authorities of the agreement between Doha and Ramallah. Majdalani said the agreement solely relates to supporting impoverished Gazan families and does not include any payments to Hamas officials.
“We have not received any opposition [from Israel]. Right now we are just examining the matter of implementation,” said Majdalani, when asked whether Israel had objected to the proposed mechanism.
Israel has demanded closer oversight over the list of 100,000 Gazan families that receive support through the mechanism, including the ability of the Shin Bet to strike the names of those it deems to be affiliated with Hamas.
Majdalani did not respond to a question on whether Hamas and Qatar would still be allowed to determine the funds’ recipients. Israel would likely object to such an accord, seeing it as a way for at least some Hamas officials to receive payments indirectly.
Israel’s Defense Ministry did not respond to a request for comment on the matter, nor did a spokesperson for Bennett.
According to the Kan public broadcaster, Qatar preferred to transfer the funds to the Palestinian Authority — rather than the United Nations — because the PA was prepared to charge less overhead. Ramallah’s banks were prepared to skim just 1.5 percent interest, while the UN demanded as much as 8%, Kan said, citing Palestinian sources.