In 2014, in response to American complaints about its policy of paying salaries to terrorists, the Palestinian Authority (PA) stopped such payments and instead began funneling money to the Palestinian Liberation Organization (PLO)—also headed by Mahmoud Abbas—which then distributed it to the terrorists. With the failure of other efforts to stop this practice, the Israeli defense minister, Avigdor Liberman, recently declared the Palestinian National Fund, which is the PLO’s treasury, a terrorist organization. Eylon Aslan-Levy explains:
[Israel’s] ability to pressure the PA . . . is constrained: making Israel’s civil policy in the West Bank more restrictive would harm economic growth, foment resentment, and generate international concern and bad headlines. Additionally, Israel fears that weakening the Palestinian Authority would serve only to boost the popularity of Hamas as an alternative government, so it is reluctant to expose it to public criticism. . . .
[Liberman’s] decision to designate the Palestinian National Fund a terrorist organization . . . puts the PLO on notice. The defense minister may [legally] order the confiscation of a terror entity’s assets. He is not required to, but he can. A defense-ministry statement says that “necessary steps will be taken . . . to seize and forfeit” the Palestinian National Fund’s assets, but there is a vast range of possible enforcement actions that Israel could take. How far Israel goes is now up to Liberman.
[Confiscation] could even take the form of raids on banks and financial institutions in areas under PA control, as Israel has done in the past. Liberman’s announcement reminds Palestinian leaders that their powers of patronage based on controlling this money remain dependent on Israeli policy. It signals that Israel is prepared to take punitive action against the Palestinian government if it provokes Israel.
Read more on Tower: http://www.thetower.org/why-did-israel-declare-the-palestinian-national-fund-a-terror-organization/