On Thursday Israel announced that it will start deducting tax revenues collected on behalf of the Palestinian Authority (PA) to satisfy the mounting unmet claims of Israeli utility companies owed several hundred million dollars.
By treaty, Israel is responsible for providing utility and water services to the Palestinian Authority and the PA is responsible for ensuring that these services are paid for.
In response to the move, PA President Mahmoud Abbas accused Israel of “theft”, and threatened to resist the seizures through its recent application to join 15 United Nations (UN) treaties and conventions. “It is a violation of international law and norms”, Abbas told reporters on Thursday that his administration would ask the UN to “address”.
Israeli officials were quick to point out that, while seen as a penalty imposed upon the PA for abrogating negotiations with Israel and the US last week with its UN treaty applications, that the PA’s unpaid bills would need to be addressed in any event. “We can’t allow the Palestinian Authority to bankrupt our utility companies,” said a government source. The Israeli Electric Company is a state-run enterprise whose obligations are ultimately towards Israeli taxpayers.
The total amount of tax revenues withheld was not immediately reported. It is estimated however that the PA owes at least $250 million to the Israel Electric Company in addition to perhaps $200 million the PA owes to other state-run Israeli institutions like hospitals and infrastructure managers and contractors.
Palestinian UN treaty applications were a direct violation of promises made by the PA to take no steps to gain recognition of Palestinian statehood outside the framework of bilateral direct negotiations with Israel.
Because of this, peace negotiations have broken down, and earlier in the week, Israel ordered most non-security contacts with the PA to cease. Since there were virtually no such contacts, the move was largely viewed as a PR effort to show that the Israeli government was fighting back against the unilateral Palestinian attempts to bypass direct negotiations with Israel.