(Jan. 12, 2025 / JNS)
Israeli Finance Minister Bezalel Smotrich is moving to collect a debt that the Palestinian Authority has refused to pay for 15 years, amounting to 1.9 billion shekels ($515 million).
Smotrich informed the Cabinet on Sunday that the outstanding payments, which include 1.1 billion shekels ($310 million) owed to the Israel Electric Corporation, as well as debts with Israeli companies that supply fuel to the P.A., will be transferred in full, , Israel Hayom reported on Sunday.
The Norwegian trust that has served as an intermediary to transfer funds earmarked for the P.A. which were frozen in the wake of the Oct. 7, 2023, Hamas-led massacre in the northwestern Negev has been asked to release some 1.4 billion shekels ($379 million) that accumulated in the account between February and May 2024.
Smotrich nixed the U.S.-brokered deal with Norway in May after Oslo declared its unilateral recognition of a Palestinian state, and the funds have been accumulating in an Israeli bank account in recent months.
Ramallah’s debt to the Israel Electric Corporation has been an issue for Jerusalem for 15 years. Former Finance Ministry Director-General Shai Babad reached two agreements in 2016 and 2020 with the Palestinian Authority in an attempt to collect the payments, but the P.A. repeatedly violated these.
According to Israel Hayom, Smotrich rejected U.S. demands for the P.A. to receive discounted interest rates, noting that Israeli citizens are not entitled to such discounts. The daily said that the Biden administration’s decision to boycott Smotrich helped bring about the move, as the lack of ties “meant the absence of an obligation to respond to their demands.”
A 2021 report from Israel’s State Comptroller’s Office warned that Ramallah’s outstanding electricity bill was the main reason for the persisting financial struggles of the Israel Electric Corporation.
In 2023, Smotrich ordered his advisers to find a solution for the matter. The current move is permitted under legislation enacted following the Oslo Accords, which allows the deduction of tax and tariff revenue Israel collects on behalf of the P.A. to offset debts.
Since taking office in 2022, Smotrich has also moved to transfer funds destined for the P.A. to compensate families of the victims of terrorism.
The minister withheld 138.8 million shekels ($39.5 million) from the P.A. in January 2023 and 130 million shekels ($35 million) in June 2024. In both cases, the money was redirected to compensate victims of Arab terror.
The Palestinian Authority, under its “pay for slay” policy, pays monthly stipends to convicted terrorists and the families of slain terrorists. The so-called Martyrs’ Fund is a cornerstone of P.A. law, granting terrorists or their next of kin the right to receive payments as long as they live.
In 2018, P.A. chief Mahmoud Abbas declared, “If we had only a single penny left, we would pay it to families of the martyrs and prisoners.”
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