The Foreign Affairs and Defense Committee, chaired by MK Yuli Edelstein (Likud), on Sunday unanimously approved the first reading of the bill titled “Freezing of Funds Paid by the Palestinian Authority in Connection with Terrorism from Revenues Transferred by the Israeli Government.” The bill, an amendment to the Indemnification of the State for Terrorist Damages, 2024 law, was sponsored by MK Avichay Buaron (Likud).
In July 2018, the Knesset passed the Freezing of Funds Paid by the Palestinian Authority in Connection with Terrorism from Revenues Transferred by the Israeli Government Law, sponsored by MKs Avi Dicter and Elazar Stern. This law stipulates that funds paid by the Palestinian Authority to terrorists will be deducted from the funds Israel transfers to the Palestinian Authority, by the agreements between the two parties.
In March 2024, a law was enacted, sponsored by MK Yitzhak Pindrus (United Torah Judaism), enabling victims of terrorism and their families to file damages lawsuits against those providing wages and remuneration for committing acts of terrorism, with the possibility of receiving exemplary compensation. The law also stipulates that such compensation cannot be deducted from any amount paid by the state to terrorism victims. Additionally, it was established that victims could execute the judgment against any asset belonging to those involved in financing terrorism, including funds frozen under the 2018 Freezing of Funds Law.
The new bill proposes that an amount be deducted from the funds transferred by Israel to the Palestinian Authority, corresponding to the state’s expenditures in the previous year on payments to victims of hostile acts and compensation for war damages paid by Property Tax authorities. The deduction amount will be determined by the Political-Security Cabinet based on reports provided to the Minister of Labor and the Minister of Finance. These reports will cover funds paid in the previous year under the Benefits for Casualties of Hostile Acts Law for bodily harm caused by hostile acts, and under the Property Tax and Compensation Fund Law for war damage resulting from such acts.
Committee Chair MK Edelstein stated: “This is another important step in our uncompromising fight against Palestinian terrorism. The fact that an entity pays money according to a terrorism price list turns that entity into a terrorist entity. If the Palestinian Authority is lining the pockets of terrorists, we will target its pockets. Furthermore, the money deducted from the PA’s funds will be given to Israeli families who are victims of terrorism.”
MK Buaron stated: “We are making history today, nothing less. Israel’s citizens pay billions of shekels every year for damages caused by terrorist attacks, both in property tax and National Insurance payments. No one compensates us for these billions. Every year, the State of Israel transfers billions of shekels to the Palestinian Authority. The bill I submitted, which was approved today for the first reading, corrects this situation and ensures that Israel will exact the cost of damages from the Palestinian Authority as well.
“For decades, the Palestinian Authority has been encouraging, financing, and promoting terrorism, and for the first time, we are making it pay the price for damages. We are not touching the frozen funds designated for the victims of terrorism. This bill is aimed at holding the Palestinian Authority fully accountable as the party that authorizes terrorism and holds full liability for it. This is a liability that Israel has not previously pursued while bearing the vast costs of terrorism itself. The bill seeks to change this intolerable situation. This is history, nothing less.”
