US Treasury Secretary Janet Yellen on Wednesday cautioned Foreign Minister Israel Katz against any further withholding of funds that Israel collects on behalf of the Palestinian Authority (PA).
Yellen met Katz on the sidelines of the NATO Summit in Washington DC. In a statement following the meeting, the Department of the Treasury said that Yellen “emphasized the need for Israel to maintain economic stability in the West Bank by regularly transferring clearance revenues to the Palestinian Authority and ensuring that correspondent banking relations between Israeli and Palestinian banks remain uninterrupted.”
Yellen “also raised Treasury’s February Executive Order 14115, holding individuals and entities accountable for perpetrating, inciting, or financially supporting violence throughout the West Bank,” added the statement.
The Department of the Treasury also said that during the meeting with Katz, “Secretary Yellen outlined Treasury actions to disrupt Iran and its proxies including Hezbollah and Hamas. Secretary Yellen welcomed additional information sharing with Israel and noted that ongoing collaboration to combat terrorist financing has yielded fruitful results with respect to countering Iranian financial and military support to Hamas, Hezbollah, and its other regional partners and proxies.”
In May, Finance Minister Bezalel Smotrich decided to freeze the tax revenues that Israel collects on behalf of the PA, after several European countries, including Spain, Ireland, and Norway unilaterally recognized a Palestinian state.
In his announcement, Smotrich said that he would take financial steps that would topple the Palestinian Authority in Judea and Samaria, where the European countries have declared they would recognize "Palestine."
Among these steps is a complete halt to the transfer of tax money to the Palestinian Authority, and no extension of the indemnity extended to banks that transfer money to banks in Judea and Samaria.
Last November, the Israeli Cabinet decided to offset from the funds of the PA all the money intended for the Gaza Strip, in addition to the offset that is carried out, in accordance with the law, of funds paid to terrorists and their families.
Upset by the Israeli move, the PA refused to accept the money that Israel collects on its behalf, unless the funds for Gaza are included, and returned it.
In March, the PA received 407 million shekels from Israel after Norway agreed to help facilitate the transfer of the frozen tax funds earmarked for the PA that were collected by Israel.