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PA and Palestinian banks plan to defy Israel’s Anti-Terror Law

Maurice Hirsch, Adv. and Itamar Marcus  |

The PA announced yesterday that in the coming days it will pay the monthly salaries to imprisoned terrorists in cooperation with and through the banks that are active in the PA.
This is a defiant move against Israeli authority and rule of law by the banks that are apparently under pressure from the PA.

Banks that will receive the terrorists’ salaries are violating a new law that came into effect in Judea and Samaria on May 9, 2020. The new law determines that paying rewards for acts of terror constitutes a crime, and anyone who is involved in the process is committing a crime – including the banks and their employees.

Director of PLO Commission of Prisoners’ Affairs Qadri Abu Bakr announced that the PA will continue to pay the terrorists’ salaries through the banks for four months until the establishment of a new “banking institution” that will be subordinate to the PLO. This plan for a new bank was undertaken by the PA because of the new Israeli law. However, even accepting the salaries for one month is a violation of Israeli law. This is how it was explained by official PA news agency:

“Director of [PLO] Commission of Prisoners’ Affairs Qadri Abu Bakr said that the payment of the salaries of the prisoners and the Martyrs’ families through the banks will continue until the development of a banking institution that will become a bank for them.
Abu Bakr said in a phone conversation with [the official PA news agency] WAFA that a meeting was held yesterday [May 31, 2020] according to the instructions of [PA] President Mahmoud Abbas and in the presence of [PA] Prime Minister Muhammad Shtayyeh, President [Abbas’] Advisor on Legal Affairs Ali Mahana, the [PA] Ministry of Finance, the Commission of Prisoners’ Affairs, the [PA] Monetary Authority, and representatives of the banks. During [the meeting], it was decided that the payment of the allowances of the prisoners and the Martyrs’ families will continue through the banks, until the development of the banking institution for loans that is subordinate to the PLO is completed, so that it will become a bank for them.

He explained that the idea of establishing this bank arose following the decision of ‘the Israeli military governor’ on March 9 (sic., Feb. 9, 2020), who warned the banks not to continue handling the money and savings of the prisoners and the Martyrs’ families.

Abu Bakr emphasized that the establishment of the bank will be completed within four months, which is considered a national achievement, because stopping the payment of their salaries harms the history of the prisoners and Martyrs, their struggle, and their sacrifices.

He noted that today, Monday, a [PA] government meeting will be held that will approve [the establishment of] the bank, and that a recommendation to approve it will be submitted to the president.”

[WAFA, official PA news agency, June 1, 2020]

A month and a half ago PMW notified the banks that are active in the PA and warned them that the newly signed law makes the PA’s payments to the imprisoned terrorists a crime even if committed in the PA areas. Any person or institution who aids in implementing these payments is committing a crime and could be arrested, put on trial, and have the relevant property seized. PMW also warned that the banks’ cooperation is liable to expose them to civil suits.

Following the warning, and shortly before the new law took effect on May 9, 2020, the banks contacted the PA minister of finance, noting the risks to which the banks will be exposed if they continue to provide the platform for paying the terrorists’ salaries, and they asked the PA to stop transferring the salaries through the banks:

“Based on the plenary session of the Association of Banks [in Palestine], all of the banks hereby ask Your Honor to stop transferring any sums into these accounts. The banks will transfer the balances in these accounts to the Ministry of Finance’s account.”

[Wattan, independent Palestinian news agency, May 8, 2020]

At the same time, PA Prime Minister Muhammad Shtayyeh announced that a committee would be established to examine the issue and formulate recommendations:

“Official [PA] Government Spokesman Ibrahim Melhem said that [PA] Prime Minister Muhammad Shtayyeh ordered to assemble a committee led by [PA] Monetary Authority Governor [Azzam Al-Shawa], which includes [PA] Minister of Prisoners’ Affairs (sic., Director of PLO Commission of Prisoners' Affairs Qadri Abu Bakr), the banking association, and a representative from the [PA] Ministry of Finance in order to examine the Israeli threats against the banks that are providing their services to the relatives of the prisoners and Martyrs and to submit the needed recommendations to deal with them.”

[Official PA daily Al-Hayat Al-Jadida, May 8, 2020]

Later on, Shtayyeh added that the team’s work is continuing and that they had not yet found a solution to both continue paying the salaries to the terrorists and also protect the banks:

“[Shtayyeh] noted that a working group that includes the [PLO] Commission of Prisoners’ Affairs has been established to examine the Israeli threat and submit the needed recommendations for fighting it. Shtayyeh emphasized that the banks are financial institutions that constitute an impetus for the national economy, and that we must protect them from the occupation’s blackmail. He noted that the government and the banks are dealing with this matter together, and that ‘We are searching for solutions that will protect the prisoners’ allowances on the one hand, and protect the banks from the occupation’s threats on the other.’”

[Official PA daily Al-Hayat Al-Jadida, May 12, 2020]

Just a few days ago, Chairman of the Board of Directors of the Association of Banks Maher Al-Masri said that a solution has still not been found for the issue of paying the terrorists’ salaries:

“There is no solution of any kind for the matter of the prisoners’ salaries… The PA is still seeking solutions for this matter in cooperation with the banks and the [PA] Ministry of Finance.”

[Sada News, Palestinian news agency, May 28, 2020]

In the same article, Chairman of the PA-funded Prisoners’ Club Qadura Fares was quoted as saying that “The club’s position on the matter of the prisoners’ salaries is clear: A rejection of any solution other than payment through the banks.”

In the struggle between the PA’s insistence on continuing to pay terror rewards to terrorists through the banks that are active in the PA, and the banks’ desire to avoid being involved in committing terror crimes, it appears the PA has the upper hand for now.

But as was stated in PMW’s warning letter to the banks, cooperation with an act that is defined in law as “a prohibited action with terror assets” is liable to cause the launch of the investigation, arrest, and putting on trial of the various bank managers. At the same time, this is liable to expose the banks to additional enforcement actions, including the issuing of orders to seize the money paid to the terrorists and also civil suits. Banks that have branches in the US are liable to be particularly exposed in this context. The PA’s pressure to reward terrorists will not help the banks to escape the situation that has been created.