Ramallah- Once again, Palestinian tax funds held by the Israeli occupation (clearance) returned to the forefront, after the Israeli government announced, yesterday, Sunday, its approval of a new mechanism for transferring these funds through a third party until the next day after the war.
Two Palestinian analysts see the new mechanism as “international legalization” for deducting Palestinian funds, and granting extremist ministers in the Israeli government the right to determine the fate of Palestinian funds “with international auspices and approval.”
On Sunday, the Palestinian Authority announced its rejection of any Israeli requirements, but it did not announce whether it would receive its incomplete funds or not.
The clearing funds are the collection of taxes, customs and duties imposed on goods imported to the Palestinian side, which Israel collects at the crossings on behalf of the Palestinian Authority in exchange for a 3% commission.
The occupation compensates its “victims” with tax money it collects on behalf of the Palestinian Authority.. What is meant by “clearance funds”?#Gaza_War pic.twitter.com/iTxOhh503A
– Tel Aviv Tribune Channel (@AJArabic) January 16, 2024
New mechanism
The clearing is supposed to be transferred monthly to the authority, but the occupation authorities began deducting amounts from it years ago, equivalent to what the authority pays to the families of prisoners and martyrs, and then added Gaza’s share to the deducted amount after the ongoing aggression since the seventh of last October.
The total value of the clearance funds is estimated at $257 million per month, while about $200 million goes to Gaza in employee wages, prices, fuel, and electricity.
The Israeli Broadcasting Authority reported that the Cabinet had “approved the transfer of funds to the Palestinian Authority via Norway.”
She said, “A report will be submitted on the status of these funds every month, and if there is a violation, Norway will transfer the funds to the Palestinian Authority in the form of a loan or in any other way, while Finance Minister Bezalel Smotrich has the authority to freeze all funds transferred to the Authority.”
According to the official Palestinian News Agency, the Israeli decision came at the request of the US administration and requires that the clearance funds be deposited in the amount of between 750 and 800 million shekels per month (200 and 213 million dollars), in an account in Norway, and that the Palestinian Authority can obtain the share of the West Bank from Norway, The Gaza Strip’s share in this account remains.
But Yedioth Ahronoth newspaper said that the plan approved by the political and security cabinet stipulates “the transfer of tax funds to the Palestinian Authority, while transferring Gaza allocations to Norway.”
Authority response
In the first official Palestinian response, the Secretary of the Executive Committee of the Palestine Liberation Organization, Hussein Al-Sheikh, rejected – in a tweet on the X platform – any diminution of Palestinian funds. He stressed that “any derogation from our financial rights, or any conditions imposed by Israel that are based on preventing the Authority from paying our people in Gaza, are rejected by us.”
Al-Sheikh called on the international community to “stop this behavior based on piracy and stealing the money of the Palestinian people and force Israel to transfer all our money,” without indicating if what Whether the authority will receive the funds is incomplete or not.
The Israeli-announced agreement takes us back to the Palestinian government session on January 8, when Prime Minister Muhammad Shtayyeh said that the Palestinian Authority agreed to the American proposal.
Shtayyeh added, “US President Joe Biden, his National Security Advisor Jake Sullivan, his Secretary of State Anthony Blinken, and a number of world leaders intervened, but Israel still rejects the US administration’s proposals, such as transferring this money to Norway, which in turn hands it over to us, even though we agreed to that.”
He explained, “Last month, Israel deducted 517 million shekels (about 140 million dollars) from the clearance funds, which amounted to 750 million shekels (about 200 million dollars), and sent the rest to us, but we refused to receive it.”
The Palestinian leadership is studying all proposals to solve the current financial crisis as a result of Israel’s seizure of our funds. The Palestinian leadership insists on its position of commitment to our people in the Gaza Strip. The leadership appreciates the efforts made by brotherly and friendly countries to end the financial crisis. At the same time…
– Hussein AlSheikh (@HusseinSheikhpl) January 21, 2024
In a subsequent tweet, Al-Sheikh said, “The Palestinian leadership is studying all proposals to resolve the current financial crisis as a result of Israel’s seizure of our funds.” He added, “The Palestinian leadership insists on its position of commitment to our people and people in the Gaza Strip,” praising “the efforts made by brotherly and friendly countries to end the financial crisis.”
According to economic expert Nasr Abdel Karim, the problem with the agreement is not withholding Gaza’s share of government spending, as happened with the allocations for prisoners and the families of martyrs, but rather in “preventing the authority from disposing of its money freely, whether in Gaza or elsewhere.”
He added, “It is clear that the Authority is prohibited from spending on Gaza with American guarantees that will be provided to Israel in the form of reports proving this. If this happens, the agreement gives Smotrich the right to stop transferring funds to the Authority again.”
Abdel Karim sees the announced conditions as “an injustice with major political repercussions,” saying, “It is true that there is a deep crisis that the Palestinian Authority is going through, but politically, the cost of approval is much greater.” He continued that the Sheikh’s statement did not clarify whether there was a refusal to receive the incomplete funds or not.
One billion dollars is deducted by Israel annually from the funds of Palestinian merchants.. What are the clearance funds? Why does the occupation confiscate it? pic.twitter.com/0c3pZIvUnH
— AJ+ Arabic (@ajplusarabi) January 20, 2024
It is better to refuse
In his opinion, the authority should try to change the terms of the agreement and explain to America and Norway the repercussions of the plan and try to present a model closer to that of the prisoners, as it recognized the Israeli discounts while continuing to pay the prisoners and martyrs.
Abdel Karim called on the authority to work diplomatically to convince the world that it is dealing in Gaza with retired employees who have normal, normal civil rights, and no one has the right to prevent this right, considering that what is happening has political significance, wondering, “If Gaza becomes separate at this level, what remains of The whole national project?
He also called on the authority to work on other alternatives that would be ready when money is refused, “and it is possible to work with Arab countries and Europeans who will soon pay $130 million, in addition to the option of borrowing from banks.”
He said that accepting clearing according to the current agreement is “humiliating and disturbing,” calling for “solving this dilemma on terms that are neither hegemonic nor politically disturbing.”
Abdel Karim pointed out that Israeli discounts are illegal, “and any new agreement that does not guarantee their disbursement gives them international acceptance and cover.” He did not rule out American pressure on the Authority to accept it incomplete under the pretext that Washington convinced Israeli Prime Minister Benjamin Netanyahu and his government to transfer these funds.
For his part, the writer who follows Israeli affairs, Muhammad Abu Alan, considers the announced agreement “international legalization” of the Israeli cuts.
He told Tel Aviv Tribune Net, “The correct decision is to refuse to receive the clearing, because nothing has changed, as the authority’s condition was to receive it in full, and there is no such thing.”
The second reason is that the Israeli Minister of Finance and the occupation government have legalized the seizure of Gaza’s funds through an agreement between America, Norway, and Israel, if the authority agrees to be a party and gives Israel the green light for further deductions.
More importantly than the above, Abu Allan says, the Palestinian approval – if it occurs – is a passing of the policy and decision of Smotrich, who previously announced that there is no money for the Gaza Strip as long as the Islamic Resistance Movement (Hamas) is there.