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Israel freezes funds to PA in protest at terrorist payments

The Israeli Cabinet yesterday implemented a new law yesterday to withhold tax income from the Palestinian Authority because of its policy to pay salaries to people, and their families, who carried out terrorist attacks.

Under the law passed by the Knesset in July 2018, funds amounting to half a billion shekels (approx. £107m) have been deducted from the tax money that Israel collects on the Palestinians’ behalf. During yesterday’s meeting, security officials presented data to the Cabinet that revealed the PA transferred half a billion shekels to terrorists imprisoned in Israel, to released terrorists, and to their families in 2018.

The law also states that, if the PA stops the payments, the Cabinet is authorised to release the frozen funds. Prime Minister Benjamin Netanyahu also instructed security officials: “To examine further payments that the PA pays in connection with terrorism”.

Avi Dichter, chairman of the Foreign Affairs and Defence Committee, said: “The party’s over! The cabinet announced the implementation of the law and the offsetting of the terrorism money. This law will make it clear to the PA and to Abu Mazen [Abbas]: paying salaries to murderous terrorists doesn’t pay!”

Palestinian officials will convene tomorrow to discuss options in response to the Israeli decision. Palestinian Prime Minister Rami Hamdallah said the move amounted to a: “Theft of Palestinian public money” and showed “Israel’s enactment of racist laws in support of the occupation” which “undermined the two-state solution”.

The decision to freeze the funds has caused serious concerns within the Israeli security establishment. The Israel Security Agency, the Shin Bet, is concerned that the economic blow to the PA will cause it to stop security cooperation with Israel, or potentially result in the collapse of the PA, which would place the responsibility for managing the lives of millions of Palestinians on the Israeli military.

The actual freeze of tax income will be carried out by Finance Minister Moshe Kahlon, who is the head of the Tax Authority. Kahlon said he would implement the freeze as soon as he received the data from the Shin Bet.