The Israeli security cabinet voted on Sunday to withhold nearly 600 million shekels ($184 million) from monthly transfers to the Palestinian Authority to offset funds that it paid to terrorists and their families in the past year, the Prime Minister’s Office said.
The decision followed a report submitted by Defense Minister Benny Gantz on freezing the funds, which the PA has been doling out to terrorists and their families.
“In light of this report, these funds will be frozen from the monthly payments that Israel transfers to the PA,” according to the PMO.
According to the report, which was prepared by the Defense Ministry Economic Counter-Terrorism Staff , the PA transferred NIS 597 million in indirect support of terrorism in 2020.
Pursuant to the approval of the report, these funds will be frozen on a monthly basis out of the payments that Israel transfers to the Palestinian Authority, the PMO said.
PA President Mahmoud Abbas has persisted making the payments despite Israel’s deductions, as well as the U.S. banning aid to the PA as long as it continues.
The Deduction Law, also known as the “Pay for Slay Law,” passed in 2018, requires the Finance Ministry to deduct those funds from the taxes and tariffs Israel collects for the PA on a monthly basis, based on the amount the PA paid terrorists the previous year, divided by 12.
The funds come from imports to the PA that go through Israeli checkpoints. Israel collects VAT and tariffs for the PA, as provided by the Oslo Accords. Those funds are the largest source of income for the PA. Israel also collects income tax and health-insurance funds for Palestinians who work for Israelis.