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Yoav Dudkevitch/TPS on 2 May, 2024
‘The Crisis Has Been Postponed,’ Ramallah Says of Brief Israeli Banking Waiver
Jerusalem, 3 November, 2024 (TPS) -- Israeli Finance Minister Bezalel Smotrich’s decision to extend by one month a waiver permitting Israeli banks to process shekel transfers with Palestinian banks will force the Palestinian Authority to use informal channels or other international intermediaries, an official at the Palestinian Ministry of Finance told The Press Service of Israel.
“This may disrupt financial transfers, delay or even prevent the transfer of salaries to tens of thousands of Palestinians working in Israel and it may also be difficult for Palestinian companies to receive their payments from their Israeli counterparts,” the official said.
Under US pressure, Smotrich signed off on the waiver, but only for one month, not for a full year as urged by officials in Ramallah and Washington. The waiver allows Israeli banks to process shekel payments for services and salaries associated with the Palestinian Authority without running afoul of laws against terror-funding and money laundering. The banks process PA stipends for imprisoned Palestinian terrorists and their families.
The shorter waiver period gives Israel leverage against potential unilateral moves towards Palestinian statehood by the outgoing Biden administration. The US is holding its presidential elections on Tuesday.
“The crisis has been postponed on the whole, but the possibility of the collapse of the Palestinian economy is not passing away,” the PA Finance Ministry official told TPS-IL.
The Palestinian Authority allocates seven percent of its annual budget for its so-called “Martyr’s Fund,” which provides the stipends. The size of the monthly payouts is primarily determined by the duration of the terrorist’s incarceration, with a negligible additional factor based on family size.
Ramallah has been paying out stipends for years, but the issue came under a spotlight following the murder of Taylor Force, a U.S. citizen killed by a Palestinian who went on a stabbing rampage in Jaffa in 2018. Congress passed the Taylor Force Act, which halted U.S. aid to the Palestinians as long as terror stipends are being paid out.
U.S. assistance to the Palestinian Authority resumed under the administration of President Joe Biden. In December 2022, American victims of Palestinian terror filed a lawsuit against the President and Secretary of State Antony Blinken, arguing that the payments violate the Taylor Force Act.
Despite claiming to be operating at a 172% budget deficit, the Palestinian Authority in July recognized 899 new prisoners from Gaza and tens of thousands more Gaza “martyrs” as eligible for the “pay for slay” payouts.
