Israel doesn’t have to, yet it transfers hundreds of millions of dollars to the PA. The economist who shocked MKs with the seemingly outrageous details spoke with Arutz-7.
The Knesset Finance Committee members were unhappily surprised when they heard the report this week by economist Nahum Gutentag of the Legal Forum for the Land of Israel. Gutentag told them that hundreds of millions of dollars are transferred by Israel's government to the Palestinian Authority's bank accounts, with no legal obligation to do so on her part.
This, despite the PA's numerous struggles against Israel in various arenas, such as boycotting Israeli goods, an attempt to drum up an academic boycott, legal battles against IDF senior officers and the like.
Gutentag told Arutz-7's Shimon Cohen a few of the examples he showed the startled Knesset Members. "I want to emphasize that all my data have been collected exclusively from official sources of the State of Israel," he said, "such as the Foreign Ministry, Finance Ministry, and the like."
Gutentag explained that the Paris Agreement of 1994 - the short name for the Protocol on Economic Relations between the Government of Israel and the PLO Representing the Palestinian Nation [sic] - obligates the State of Israel to transfer to the PA the VAT (value added taxes) that she collects on behalf of the PA. Israel, however, has chosen to transfer "a few hundred millions more than we collect… The Finance Minister, or someone else, is apparently interested in strengthening the PA's economy, so they get hundreds of millions more than necessary."
In addition, Gutentag points out, there are VAT charges that the PA is supposed to collect for Israel that Israel doesn't even bother to charge for. "Israel never charged the PA for the VAT it was supposed to collect for [Israel] when Israeli-Arabs purchase goods in Jenin, Shechem or Tulkarem. These sums add up to millions."
And that's not all. Gutentag also told the Knesset committee that the State of Israel has decided to let some PA merchants carry out business deals without tax invoices. It is thus impossible to supervise the scope of business deals in which they are engaged, nor the amount of VAT that should have gone to the Israeli treasury.
Another issue Gutentag spoke of is that of National Insurance. The National Insurance treasury holds money that is supposed to be transferred to PA residents formerly employed in Israel. Normally, when this situation comes up between countries, the country owing the money hands it over to the worker himself after he has properly identified himself. Not so between the PA and the State of Israel, however. Gutentag explained that instead of giving the money to each individual employee, Israel transfers the total sum it owes to the PA's treasury, counting on the PA to locate the person, identify him and pay him. If the person is not found, the money stays in the PA's treasury.
The bottom line, Gutentag says, is that there is no supervision over the PA's search for the rightful owners of the money, and so it can never be known if the money was ever transferred – or if it simply remained in the PA treasury. "Once the sum has been transferred to the PA treasury," Gutentag continues, "no one can demand it back - and no one does."
These are but a few examples in a long list of fund transfers, or non-transfers, Gutentag said, "and they are a central part of the PA budget - a budget founded on money from Israel and from donating countries. These funds allow the PA to use its other financial reserves to finance its struggle against Israel."
How did the MKs react to his report? "They were shocked and had nothing to say," Gutentag answered. "The only one to regain composure, in fact, was MK Chaim Oron [of the left-wing Meretz party], who said that if MK Uri Ariel (National Union) would agree to accept the Oslo Agreements as a political basis, he would agree to an Israeli demand for the return of these funds, in accordance with the Oslo Agreements.
The Legal Forum for the Land of Israel is now working on a detailed and precise report of the above details, and plans to distribute it to the Knesset Members and government decision makers.