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Netanyahu Relents on Transfer of Funds Collected for Palestinian Authority

Israeli Prime Minister Binyamin Netanyahu has relented on the withholding of tax and tariff revenue Israel collects on behalf of the Palestinian Authority pursuant to terms of the Oslo Accords and will transfer about $107.2 million being held since the end of November 2012 in retaliation for the Palestinians’ decision to seek non-member status at the United Nations. The failure of the PA to receive the money contributed heavily to the acute cash shortage that has fomented labor disputes, prevented the PA from paying its bills and threatened its fiscal collapse. Israeli government sources said the prime minister’s decision is a one-time act taken in consideration of the severity of the PA’s financial predicament. A large amount of the money withheld was used by Israel to offset amounts owed to the Israel Electric Corporation for power supplied to the Palestinian territories. Palestinian Prime Minister Salam Fayyad recently told The Media Line that the cash crisis was caused in part by Israel’s refusal to transfer the money and by the refusal of Arab states to make good on their pledges of support. Civil servants employed by the PA are currently on strike because they have not been paid.