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The Palestinian Authority’s financial support for terrorism circumvents U.S. and Israeli law

By Yoni Ben Menachem
web posted March 29, 2021

The Palestinian government has decided to pay grants to terrorists and their families through the Palestinian postal banks to circumvent the Israeli prohibition on West Bank commercial banks’ involvement in terrorism-related activity.

Israel and the U.S. Congress see these payments as rewards and incentives to terrorists.

The “Cat and Mouse” game continues as PA Chairman Mahmoud Abbas challenges Israel’s regulations with impunity and takes advantage of Israel’s reluctance to destabilize his rule.

The struggle between Israel and the Palestinians over the payment of grants to terrorists and the families of “shahids [martyrs]” entered a new phase after the Palestinian government decided to pay the funds through postal banks to some 12,000 families. The PA’s postal banks are not considered “banking institutions.”

The Palestinian government’s action came after the West Bank commercial banks shut the accounts of the terrorists and the families of the “shahids” and the wounded following an order issued by the IDF Central Command threatening to impose penalties on any bank that transfers funds to those accounts.

Amendment 67 of the military order issued by the commander of the Central Command, Maj. Gen. Nadav Padan, stipulates that banks through which salaries are transferred violate the “Terrorism Law.” The order also warned bank managers operating within the PA that they and their employees will be considered criminal accomplices if they continue to manage accounts of Palestinian terrorists imprisoned in Israel because it “supports, promotes, funds or rewards” terrorism, punishable with up to 10 years in prison.

The PA’s Chairman of the Commission of Detainees and Ex-Detainees Affairs, Qadri Abu Bakr, said that the salaries of the security prisoners in Israeli jails for March would be paid early in April through the post offices in the West Bank until automated teller machines (ATMs) are established from which the salaries can be withdrawn with a “smart” card. The Palestinian Ministry of Communications and Technology has already begun to install a network of ATMs in branches of the postal bank in the West Bank.

Qadri Abu Bakr said 7,500 released terrorists would receive salaries for official jobs in the PA’s civilian and security institutions and that they would receive the wages in the same way that government officials are paid.

The PA was forced to pay three months in advance at the end of last year after the Palestinian banks closed the terrorist accounts in their West Bank branches.

Dozens of released terrorists demonstrated in Ramallah two weeks ago in front of Palestinian government buildings demanding faster hiring into Palestinian Authority institutions so that they could receive their salaries.

Palestinian Prime Minister Mohammad Shtayyeh said last week that Israel had cut NIS 52 million each month from the tax revenues it collects for the Authority to offset the amount paid by the PA to the terrorists and the families of those killed and injured.

Deductions Mandated by Israeli and American Laws

Last year, Israel began deducting tax revenues in accordance with the “offset law” approved by the Knesset and following the comparable American “Taylor Force” legislation passed by Congress.

The PA initially considered establishing an independent bank to transfer the grants to terrorists and their families but eventually dropped the idea, deciding to make the payments through the postal bank branches.

Cat and Mouse Game

Paying the salaries to terrorists through post offices is a new evasive maneuver to circumvent Israel’s demand to halt paying salaries to terrorists and their families.

This is a “cat and mouse” game. Israel is obligated to transfer the tax dollars to the PA under the Paris Agreement. Israel does not seek the PA’s collapse and wants tens of thousands of PA officials to receive salaries. However, the PA takes shameless advantage and uses the money it receives from Israel to pay terrorists and their families.

PA Chairman Mahmoud Abbas knows that Israel is not interested in the collapse of the PA or Hamas’ control of the West Bank after the May 2021 elections. He is confident Israel will continue to transfer tax dollars, so, with impunity, he continues this confrontation with Israel and presents himself as a “national hero” who cares about the rights of the Palestinian “fighters.” He claims that the PA’s financial support for terrorists and their families was a “red line” that he would never cross.

An Ironic Postscript

In December 2020, Palestinian Authority civilian and security employees protested to European donors that the PA finance minister had suspended their salaries because they supported the election of opponents to the Abbas regime. ESR

Yoni Ben Menachem, a veteran Arab affairs and diplomatic commentator for Israel Radio and Television, is a senior Middle East analyst for the Jerusalem Center. He served as Director General and Chief Editor of the Israel Broadcasting Authority.

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