Israel Seeks to Divert Palestinian Funds for Terrorists to Jewish Settlers

The bill, sponsored by the Defense Ministry, would reduce Israel's tax transfers to the Palestinian authority by the amount the Palestinian Authority spends on payments to terrorists and their families

The Israeli cabinet at their weekly meeting, February 1, 2018.
Olivier Fitoussi

The Ministerial Committee for Legislation will consider a bill on Sunday that would let the government reduce tax transfers to the Palestinian Authority by the amount the PA spends on payments to terrorists and their families.

Israel collects various taxes on the PA’s behalf and transfers the money to the PA on a monthly basis.

The bill, sponsored by the Defense Ministry, states that the government will be able to use any withheld funds for infrastructure work “for the benefit of residents of Judea and Samaria,” as the West Bank is known in Hebrew. The bill’s explanatory notes say this provision is intended “for the benefit of the entire population of the region.”

The government could also use the withheld funds to pay compensation or damages awarded by Israeli courts in suits against the PA or individual terrorists. In addition, the money could be used for projects aimed at preventing terror.

The bill would require the defense minister to give the security cabinet an annual report on how much money the PA paid to terrorists and their families, either directly or indirectly, that year. The security cabinet could then decide to withhold all or part of that sum from Israel’s transfers to the PA, temporarily freeze the funds, or transfer them to the PA as usual.

If the money is withheld, it will be deposited in a special fund managed by the government’s administrator general. He will be able to disburse the money in line with regulations that will be drafted by the justice, finance and foreign ministers and approved by the Knesset Constitution, Law and Justice Committee.

Palestinian president Mahmoud Abbas at the  Executive Committee at the Palestinian Authority headquarters in the West Bank city of Ramallah on February 3, 2018.
ABBAS MOMANI/AFP

Last month, after attorney Gal Cohen of the Defense Ministry’s legal department presented the bill’s main points to the Knesset Foreign Affairs and Defense Committee, committee chairman Avi Dichter (Likud) slammed the fact that the security cabinet will be able to decide not to withhold any of the money.

“This ‘flexibility’ in judgment, to the point of not deducting any funds at all, contracts the bill’s basic rationale,” he said at that meeting. “The Palestinian Authority has brought its financial situation upon itself by transferring 1.2 billion shekels [$340 million] – which amounts to seven percent of its budget – to terrorists, and therefore, its budgetary hole can’t be Israel’s problem."

“The absurd situation over there is that a Palestinian who engages in terrorist activity essentially immediately becomes a civil servant, and he or his family gets a regular monthly salary, with no discretion on the PA’s part,” he added. “Continuing to transfer money that funds both the terrorists and the weapons is like financing the hangman and the noose against ourselves.”

MK Elazar Stern (Yesh Atid), who submitted a private member’s bill on this issue that the committee has discussed over the past few months, offered more muted criticism.

“I understand that it’s necessary to leave the security cabinet, which I generally trust, with some flexibility,” he said, “and therefore, it might be possible to talk about percentages, about amounts. But there shouldn’t be a situation in which this [legislation] is completely neutered by this option.”