Israel parliament advances bill to freeze more Palestinian Authority funds

Israeli parliament (Knesset) on Wednesday approved in a preliminary reading a bill that would allow the government to freeze additional Palestinian Authority clearance revenues, a move expected to deepen the financial crisis facing the Ramallah-based administration.

The bill, approved in its first reading, would authorize Israel to withhold additional funds belonging to the Palestinian Authority, according to Israeli daily Haaretz.

Under the proposal, introduced by Likud lawmaker Moshe Passal, Israel would annually freeze an amount equivalent to the funds transferred by the Palestinian Authority to the Gaza Strip during the previous year.

According to Haaretz, Israel is currently withholding about 14 billion shekels ($4.6 billion) in Palestinian clearance revenues collected from customs duties on imports destined for the occupied Palestinian territories.

The newspaper said the withheld revenues continue to accumulate in Israel's treasury, forcing the Palestinian Authority to implement austerity measures to cope with a financial crisis that has persisted for nearly three years.

The confiscated amount has been accumulating since 2019, with roughly 400 million shekels ($131.4 million) added each month, according to the report.

Clearance revenues consist of taxes and customs duties collected by Israel on behalf of the Palestinian Authority on goods imported into the occupied Palestinian territories. Under the 1994 Paris Economic Protocol, the funds are transferred monthly to the Palestinian Finance Ministry.

The revenues account for about 56% of the Palestinian Authority's total public income, making any deductions or withholding a significant blow to its ability to pay public-sector salaries, provide essential services, and meet obligations to the private sector and banks.

Israel began deducting amounts from Palestinian clearance revenues in 2019, citing payments made by the Palestinian Authority to the families of Palestinians imprisoned by Israel and those killed by Israeli forces.

It later expanded the scope of the deductions and withholding, further exacerbating the Palestinian Authority's financial crisis and leaving it unable to pay full salaries to public employees.

In 1948, Israel was established on Palestinian land occupied by armed Zionist groups that carried out massacres and displaced at least 750,000 Palestinians. In 1967, Israel occupied the remaining Palestinian territories and has refused to withdraw or allow the establishment of an independent Palestinian state, in violation of international resolutions.