Photo Credit: Flash 90
Shalit Deal terrorists being sent to their ill-gotten freedom, October 2011

The Palestinian Authority (PA) has decided to appeal to the International Criminal Court (ICC) in The Hague over the tax funds Israel has withheld from the PA over its practice of paying terrorists and their families.

PA Finance Minister Shoukry Bishara announced Saturday that the PA was seeking international arbitration after seven months during which Israel has deducted about NIS 40 million each month from the tax funds it collects on the PA’s behalf.


Palestinian economists question the PA’s ability to act at the ICC since the Paris Agreements that anchor Israeli-Palestinian economic relations do not allow such arbitration.

At the beginning of the year, Israel decided to deduct a total of NIS 502 million from the PA’s tax funds each year, the equivalent sum the PA pays to terrorists and their families.

In response, the PA has refused to receive any tax funds from Israel, a move which has pushed it towards financial failure. Last month it was suggested that Israel will return the funds by foregoing taxes on fuel other funds owed by the PA, in the total sum of NIS 2 billion.

The Authority claims that Israel has deducted more than $ 3.5 billion in PA funds over the past five years for its debts to Israeli hospitals, the Electric Company, the Mekorot water company and various terrorist-related suits.

PA officials have confirmed in talks with the TPS that alongside these sanctions, Israel and the US are working to prevent the collapse of the PA through security coordination channels.

Last week, PA intelligence chief Majd Farj went on a working visit to the United States, where he met with senior US security officials and discussed the issue of US aid and the budget crisis. The US has not reduced the amount of financial aid to the PA’s security services.