Amid West Bank Crisis, U.S. Warns Palestinian Authority Is Failing Fiscal Transparency Requirements

The U.S. State Department's annual report comes as Israel attempts to weigh new measures to prop up the Palestinian Authority in order to prevent a spillover of terrorism and crime as the West Bank faces new economic lows

Ben Samuels
Ben Samuels
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A view of the Palestinian Kufr Aqab suburb of east Jerusalem near the West Bank city of Ramallah, on August 25, 2022.
A view of the Palestinian Kufr Aqab suburb of east Jerusalem near the West Bank city of Ramallah, on August 25, 2022.Credit: ABBAS MOMANI / AFP
Ben Samuels
Ben Samuels

WASHINGTON - The U.S. deemed the Palestinian Authority as failing to meet the minimum requirements of fiscal transparency, as Palestinian, American and Israeli officials all become increasingly concerned over the PA's control over the West Bank.

According to the State Department's annual fiscal transparency report, the PA failed to provide complete data on its budget within a reasonable period. Noting its budget was not approved by the legislature, the State Department noted information on its debt obligations was incomplete.

Further, the report noted that the PA's supreme audit institution lacked independence and its audit reports were not publicly available within a reasonable period and failed to cover the entire annual executed budget. The State Department called on the PA to publish its executive budget proposal, as well as completing its enacted budget and end-of-year report in a timely manner.

It further called on the PA to provide complete and timely information on debt obligations and to ensure the independence of the supreme audit institution. It also requested to publish supreme audit institution reports of the entire annual executed budget within a reasonable period.

The annual report comes amid a deteriorating status quo within the West Bank, where the PA has struggled to maintain security while undergoing an economic crisis that has only further weakened its control and legitimacy.

Barbara Leaf, the highest ranking U.S. diplomat for the Middle East, recently visited Israel and the West Bank where she implored all parties to stabilize the PA in order to prevent a major crisis. Israeli officials have been weighing new measures to prop up the PA in order to prevent a spillover of terrorism and crime, with Israel Defense Forces Chief of Staff Aviv Kochavi warning that conditions have "created fertile ground for the growth of terrorism."

Israel is mulling raising the ceiling on the number of Palestinians working in Israel while boosting direct financial aid to the PA. The PA, meanwhile, has blamed Israeli military raids into Palestinian cities as the cause for the PA's weakened position, and that Israel's actions only serve to weaken the PA rather than strengthen it.

Israel has also appealed to third-party countries, such as Qatar, to push the PA to bolster its security activities, while asking countries like the U.S. and Egypt to apply diplomatic pressure on the Palestinian leadership.

Haaretz has reported that the volatile circumstances that could embroil Israel and the Palestinians in another long period of escalation – a third intifada or a slightly more restrained version of it – has consistently arisen in conversations with senior security officials: the Shin Bet security service, Military Intelligence, the IDF Central Command and the office of the Coordinator of Government Activities in the Territories.

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