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Gov't Freezes Tax and Customs Funds Transfer to PA

The government has frozen the routine transfer of taxes collected on behalf of the Palestinian Authority due to the Fatah-Hamas unity deal.
By Chana Ya'ar
First Publish: 5/1/2011, 1:58 PM / Last Update: 5/1/2011, 2:01 PM

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The government has frozen the routine transfer of taxes and fees collected on behalf of the Palestinian Authority, Finance Minister Yuval Steinitz announced Sunday.

The funds, some NIS 300 million ($88 million) were to have been transferred this week to Ramallah. Israel collects more than one billion dollars per year on behalf of the PA, comprising some two-thirds of the entity's annual budget.

Steinitz said in an interview on IDF Army Radio the money will now stay in Israeli hands until it becomes clear the funds will not reach the coffers of the Hamas terrorist organization.

Fatah, which leads the Ramallah-based Palestinian Authority government, last week inked a new unity deal with its Gaza-based rival faction. Hamas, backed by Iran, is dedicated to Israel's destruction.

“If the Palestinians can prove to us... that there is not a joint fund between the Palestinian Authority and Hamas in Gaza,” said Steinitz, the funds might be unfrozen. However, he added, “We ask the entire world not to fund Hamas – so we must not do so, even indirectly.”

Israel had warned last week it would impose sanctions following the announcement of the unity deal with Hamas by PA Chairman Mahmoud Abbas, who also heads the Fatah faction.

Steinitz pointed out that such sanctions have been carried out in the past, during the second intifada by the PA that began in 2000.

Erekat: Decision is Israeli Piracy
Fatah Central Committee senior member and former PA negotiator Saeb Erekat slammed Israel's decision, calling it “financial piracy.”

Erekat said Israel had “no right” to meddle in the PA's internal affairs, including the reconciliation between Fatah and Hamas.

“The Israeli decision is financial piracy that reflects Israel's dangerous intentions,” Erekat said in response Sunday. “Israel has started a war even before the formation of the government.”