Norway assists in scheme for crucial financial transfers from Israel to Palestine
Press release | Date: 18/02/2024 | Office of the Prime Minister, Ministry of Foreign Affairs
Norway is facilitating an arrangement that will enable the Palestinian Authority to receive clearance revenues that Israel collects on its behalf. In the wake of the terrorist attack by Hamas on 7 October, the situation between the parties has been deadlocked. The temporary scheme will play a crucial role in preventing the Palestinian Authority from collapsing financially.
‘With our assistance to this solution, the Palestinian Authority will be able to pay salaries, thus making it possible to continue to provide essential services to the Palestinian population, keep schools open, and ensure that health workers are paid. This is critical to promoting stability in the region and for the Palestinian Authority to have legitimacy among its people,’ said Prime Minister Jonas Gahr Støre.
The Palestinian Authority’s economic situation has become even more precarious since 7 October. There have been reports of an imminent financial collapse. One of the reasons is that Israel has withheld some of the clearance revenues it collects on behalf of the Palestinian Authority, due to the war in Gaza. The Palestinian Authority has refused to accept all transfers unless Israel changes its decision. The impasse has gone on for several months.
‘Norway has worked closely with Israeli and Palestinian officials for many weeks to help resolve this issue. Together we have agreed on a temporary solution in which Norway will serve as an intermediary for holding the portions of the clearance revenues taxe that Israel has withheld since 7 October. The Palestinian Authority is then willing to accept the other funds. The Palestinian Authority has welcomed this arrangement and appreciates the effort to find a temporary solution in this extraordinary situation. I am pleased Norway can assist the parties in this way,’ said Minister of Foreign Affairs Espen Barth Eide.
The technical aspects of administering the funds have been agreed between Norway and Israel and were devised with the Palestinian Authority’s full understanding and support. The portion of the revenues that Israel will transfer to Norway will remain in a Norwegian account until the parties agree whether Norway may release the funds to the Palestinian Authority.
As chair of the Ad Hoc Liaison Committee (AHLC), the international donor group for Palestine, Norway is working with the Palestinian Authority as well as other donors and partners in the effort to reform and strengthen Palestinian institutions.
‘Ensuring that the Palestinian Authority does not collapse and can provide essential services to the population is vital to safeguarding the very existence of the Authority, promoting a political process and realising a future two-state solution,’ said Mr Eide.
Facts about Palestinian customs and tax revenues
- Under the Paris Protocol (a 1994 agreement between Israel and the Palestinian Liberation Organization), Israel collects Palestinian clearance revenues on behalf of the Palestinian Authority and transfers the funds to the Authority.
- These revenues account for about 65 % of the Palestinian Authority’s income.
- After 7 October, the Israeli Security Cabinet decided that part of the Palestinian clearance revenues would not be transferred to the Palestinian Authority in order to prevent payments to Hamas.
- The Palestinian Authority has responded by opposing all transfers from Israel unless Israel changes its decision. The situation has therefore been deadlocked in recent months.