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Israel: Law on Freezing Revenues Designated for the Palestinian Authority Implemented

(Mar. 27, 2019) On February 17, 2019, the Israeli Defense Cabinet reportedly decided to deduct 500 million new Israeli shekels (about US$138.2 million) from the revenues transferred to the Palestinian Authority (PA) on the basis of Israeli domestic legislation for implementing the Israeli-Palestinian Interim Agreement (the Paris Protocol). (Noa Landau  & Jack Khoury, Israel Freezes Transfer of 500 Million Shekels of Palestinian Authority Taxes, HAARETZ (Feb. 17, 2019); Gaza-Jericho Agreement, Annex IV, Protocol on Economic Relations Between the Government of the State of Israel and the P.L.O., Paris, Apr. 29, 1994. Implementing Israeli legislation includes the Implementation of the Agreement on the Gaza Strip Law and the Jericho Area (Economic Arrangements and Miscellaneous Provisions) (Legislative Amendments) 5755-1994, Ch. E, SEFER HAHUKIM [SH] [BOOK OF LAWS (official gazette)] 5758 No. 1497 p. 66, as amended, and Implementation of the Agreement regarding the Preparatory Transfer of Powers to the Authority (Legislative Amendments and Miscellaneous Provisions) Law, 5755-1995, Ch. B., SH 5758 No. 1526 p. 325.)

The government’s authority to freeze revenues derives from legislation passed on July 8, 2018—the Freezing of Funds Paid by the Palestinian Authority in Connection with Terrorism from Revenues Transferred by the Israeli Government (Law 5778-2018 (FFPA Law)), SH 5778 No. 2730 p. 732 (in Hebrew)).

The decision to implement the authority to freeze funds follows the publication of a “fees list” paid by the PA to persons held in Israeli prisons for terrorism offenses. (Yoav Ziton, PA Fees List Paid to Terrorists Exposed, YNET (Jan. 1, 2018) (in Hebrew).)

FFPA Law

The FFPA Law requires that the Minister of Defense submit for the approval of the Ministerial Committee for Matters of National Security (Ministerial Committee) a report at the end of each year detailing the “amount paid by the PA in connection with terrorism” in that year. In addition, the Minister must present the report to the Knesset Foreign Affairs and Defense Committee. (Id. § 3(a).)

The FFPA defines an “amount paid by the PA in connection with terrorism” to include money or monetary value, paid by the PA directly or indirectly

  1. [t]o a terrorist operative, during his imprisonment or detention or after his release, or to members of his family, for being a terrorist operative; [and]
  2. [t]o a prisoner or a detainee who is not a terrorist operative during his imprisonment or detention or after his/her release, or to his/her family, due to the commission of or attempt to commit an offense that causes harm to state security or public security. (Id. § 2 (translated by author).)

For the purpose of implementing the FFPA, a “terrorist operative” is generally defined as a person convicted or held in custody under charges of specified terrorism offenses. (Id.)

The FFPA requires the freezing of an amount equal to one-twelfth of the total funds paid by the PA in relation to terrorism in the previous year from monthly revenues transferred by the government of Israel to the Palestinian Authority. Frozen funds may be transferred to the PA, in full or in part, in the event that the report indicates that the PA has not made payments in connection with terrorism in the year covered by the report. A decision by the Ministerial Committee to transfer frozen funds must be published. (Id. § 4(a–b).)