Despite U.S. pressure to end the practice, the Palestinian Authority (PA) pays stipends to Palestinians in Israeli jails as well as to the families of “martyrs” who died committing terrorist acts. Jerusalem, however, continues to seek loopholes to protect Palestinian banks from terrorism-related sanctions. Nitsana Darshan-Leitner writes:
In 2015, [Israel’s] Bank Hapoalim and Discount Bank informed the Finance Ministry that they were severing their business ties with Palestinian banks that transfer PA payments to terrorists, for fear of being prosecuted under Israel’s counter-terror laws.
The decision was not made in a void: the same year saw a U.S. federal court order the PA to pay $655 million in damages to victims of terrorism. The ruling was partially based on the financial assistance Ramallah affords terrorists and its monthly payments to security prisoners jailed in Israel. Soon afterward, a verdict was handed down against the Arab Bank for financing terrorism, also in a federal court in the United States, which concluded in a $1 billion settlement in favor of the victims.
Israel’s response to the local banks’ decision was to force its financial institutions to keep up the practice, i.e., to fund terrorism. . . . After victims of terrorism appealed to the High Court of Justice against the decision, the state exempted commercial banks from providing services to Palestinian banks. But Israel . . . recently announced that it will establish a new mechanism, in the form of an independent company that would provide financial services to Palestinian banks. In doing so, the state will, in effect, allow and endorse the transfer of payments from Palestinian banks to Palestinian prisoners and the families of terrorists.
Read more on Israel Hayom: https://www.israelhayom.com/opinions/old-tricks-new-humiliation/