BICOM

According to widely quoted sources from Israel’s Prime Minister’s Office, the Israeli government is preparing to transfer to the Palestinian Authority (PA) around £68 million in taxes collected on their behalf during December.

Under the 1994 Paris Protocols, one element of the Oslo Accords, Israel transfers customs duties levied on goods destined for Palestinian markets that transit through Israeli ports. However, Israel froze these funds following the PA’s unilateral initiative to upgrade its UN status in November, viewed by Israel as a violation of agreements previously made with the Palestinians. Israel subsequently used the money to offset debts owed by the PA to the Israel Electric Company and other Israeli bodies.

An anonymous Israeli official is quoted by AFP saying that a decision was taken yesterday by Israel’s Prime Minister Benjamin Netanyahu to transfer taxes collected in December, “because of the Palestinian Authority’s very difficult financial situation.” However, the official clarified that “this transfer is temporary and affects only funds owed for one month … The prime minister did not commit to continue these transfers.”

The PA has experienced serious financial difficulties over the past few months and has struggled to pay the salaries of government employees. A major factor in this though has been the failure of Arab states to fulfil financial pledges that had been made to the PA. Yesterday’s decision came after Netanyahu met yesterday with Tony Blair, the envoy of the Quartet, which represents the efforts of the United States, European Union, United Nations and Russia in mediating peace negotiations between Israel and the Palestinians. Makor Rishon speculates that the announcement was the result of pressure exerted by Blair.