Israel Set to Approve $230m Loan to the Palestinian Authority for Its Coronavirus Response

Israel will approve an 800 million shekel (about $230 million) payment to the Palestinian Authority Sunday evening to help it cope with the coronavirus, Finance Ministry officials confirmed Sunday.

Government sources say the payment is an advance on the tax revenue Israel collects on the PA’s behalf.

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Under the agreement that is slated to be signed with the PA Sunday evening, the money will be transferred in four monthly installments. The first installment will be delivered at the end of this month.

Last week, in response to petitions against the transfer by two organizations, the state told the High Court of Justice that it planned to send the money as soon as possible, since the PA’s income has fallen drastically due to the virus. Prime Minister Benjamin Netanyahu, Finance Minister Moshe Kahlon, Defense Minister Naftali Bennett and National Security Advisor Meir Ben-Shabbat all approved the payment.

The state’s brief to the court said this was a political decision made in response to the PA finance minister’s request for “additional sums beyond the ongoing payments” because of the economic impact of the virus. To comply with the request, the state decided to sign a special loan agreement with the PA under which Israel will advance it money, but the money will later be deducted from the tax revenues Israel collects on the PA’s behalf.

Palestinian workers returning from Israel arrive at a testing site for the coronavirus at Tarqumiya checkpoint near Hebron, West Bank, March 24, 2020. MUSSA ISSA QAWASMA/ REUTERS

The brief said the decision doesn’t contradict a law requiring the government to deduct the PA’s payments to attackers and their families from the tax transfers, because the advance isn’t extra money, but will rather be deducted from future tax transfers.

In response to a separate petition filed by Physicians for Human Rights this week, which demanded that Israel also help the Gaza Strip during the pandemic, the state told the court that responsibility for that rests with the PA, not Israel.