David Horovitz
Journalist & Author

In a direct communique to the finance minister of a country it refuses to recognize, the Palestinian Authority’s Finance Ministry, headed by Hamas’s Omar Abdel Razek, has written to Avraham Hirchson, demanding that Israel transfer to the PA’s coffers the hundreds of millions of dollars in customs revenues it has been withholding since Hamas’s victory in January’s elections to the Palestinian Legislative Council.

The one-page letter was written on PA-headed paper in English and formally addressed to Hirchson at his ministry in Jerusalem, Israel. The PA has said it needs the money to meet the payroll for its approximately 160,000 civil servants, whom it has generally been unable to pay since the international community froze funding after Hamas came to power.

The letter accused Israel of unlawful behavior and specified the agreements under which, it asserted, Israel was obligated to transfer the funds, including the Paris protocol on economic relations of April 1994, which formed part of the Oslo accords.

Despite heavy international pressure since its PLC victory and formation of the PA government, Hamas has steadfastly refused to recognize Israel or to honor previous agreements between Israel and the PA – two of the three international preconditions for substantive relations with the PA government. (The third, also unfulfilled, condition is the renunciation of terrorism.)

The Finance Ministry is not treating the letter as representing any formal change in that Hamas position, and has no intention of responding to the letter, The Jerusalem Post has learned. Nor does the ministry anticipate a change of policy that would see a resumption of the customs transfers.

Prior to the Hamas victory, Israel automatically transferred to the PA some $50 million at the start of each month, representing customs and tax payments collected by Israel on the PA’s behalf on the basis of the single Israel-West Bank-Gaza customs envelope agreed upon under the Oslo accords.

Since then, however, such transfers have been halted and the money placed in escrow. Deductions are made to cover the costs of electricity and water supplies to the PA, and the costs of hospitalization of Palestinians in Israel. It is estimated that such deductions constitute less than half of the monthly figure.

Last month, Israel offered to transfer NIS 50 million via international aid organizations to alleviate what the PA said was a shortage of medicines. But the PA insisted that this money be made available directly to it in cash and Israel refused, arguing that such monies might be diverted to finance terrorism. No money was transferred.

The United States and the European Union have also frozen all direct funding to the PA.

A government official in Jerusalem said it was unacceptable for the Hamas-led PA to declare ‘that the Oslo Accords have been consigned to the ash-heap of history, but simultaneously insist that Israel honor the single aspect of those accords that it likes.’

The official noted that Israel previously suspended the transfers in 2002, at the height of the intifada, when it deemed the PA to be in violation of the Oslo agreements. It put the money in escrow and paid it over, ‘with interest, to the last agora,’ after US Secretary of State Condoleezza Rice brokered understandings for greater transparency when Mahmoud Abbas was PA prime minister and Salaam Fayad was minister of finance.

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