Israeli Finance Minister Bezalel Smotrich announced this week the revocation of the legal exemption that protected Israeli banks from lawsuits when transferring funds to Palestinian banks in Judea and Samaria. This is a dramatic decision, aimed at drying up the sources of financing for Palestinian terrorism, and preventing the Palestinian Authority from continuing to transfer funds to terrorists and their families.

The decision – a response to Palestinian Authority policy

According to Smotrich, the decision was made against the backdrop of the “delegitimization campaign that the Authority is leading against the State of Israel in the international arena” and the Authority’s continued direct support for terrorist financing, especially through the “pay-for-slay” policy – ​​paying salaries to terrorists and their families. “We cannot continue to finance a system that transfers money to terrorists who murder our citizens,” Smotrich said in an interview with Channel 14.

To stop the terrorist financing

The Palestinian financial system is completely dependent on Israeli banks, as the PA does not hold its own currency and all significant transactions are carried out in shekels. The cancellation of the exemption is expected to lead to the disconnection of Palestinian banks from the Israeli system, and in effect paralyze the Palestinian economy – a step defined by Israeli officials as “inevitable” in light of the continued financing of terrorism.

The cancellation of legal protection is a necessary step, aimed at drying up the sources of financing for Palestinian terrorism. Israel cannot afford to continue transferring money to elements that encourage harm to its citizens. As Smotrich noted, “There is no more moral and just signature than the one that prevents the Palestinian Authority from financing terrorism and frees up the funds for the benefit of the victims of terrorism”.