Seized Palestinian tax money covers debt to Israeli utilities

Published November 25th, 2002 - 02:00 GMT

Israel’s finance ministry has appropriated 15 million new Israeli shekels ($3.2 million) of seized Palestinian Authority funds, to cover debts owed by the Palestinians to Israeli electricity, water and healthcare service providers. The PA approved the move in order to ensure uninterrupted supply of electricity to Palestinian municipalities, Palestinian Finance Minister Salam Fayad confirmed.  


Israel currently holds 1.7 billion ($363 million) in income and value-added taxes and custom duties levied by its on behalf of the PA. Israel objects to handing over the money to the PA claiming it would be used to finance terrorism. It has demanded financial accountability and transparency in the PA’s financial management systems as a condition for the transfer. In July 2002, Israel released $35 million of the money in response to international pressure. 


Israeli bus cooperative Egged has filed a NIS52 million ($11 million) lawsuit this week against the PA and its chairman, Yasser Arafat. Egged lawyers are asking an Israeli court to hold the PA responsible for failing to thwart attacks against its buses. In August, a precedent was set when 29 Israeli hotel owners got a local court to freeze the transfer of $20 million, seeking to hold the Palestinian leadership responsible for a nearly 50 percent drop in tourism.  


Earlier this year, Israel’s Supreme Court ruled against 22 Israeli companies who demanded that the suspended tax money be used to cover overdue Palestinian bills to Israeli electric and water utility companies. The PA has refrained from answering the accusations in both cases. — ( 

© 2002 Mena Report (

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