U.S. Treasury Secretary Janet Yellen expressed concern over reports that Israel’s finance ministry is planning to prohibit the processing of shekel transactions for the Palestinian Authority.
Speaking to reporters on Thursday at a G7 meeting in Italy, the cabinet official described the service of Israel’s correspondent banks as "critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend," and that the U.S. and its allies "need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilize the West Bank's economy."
The statement comes as Israel’s Finance Minister, Bezalel Smotrich, has indicated that his office will not renew a waiver for the payments that is due to expire on July 1 because of Ramallah’s efforts to obtain ICC arrest warrants for officials in Jerusalem and their insistence on unilaterally establishing an independent state.
In addition to these reasons, Smotrich has warned that allowing currency processing could subject Israeli financial institutions to lawsuits over the terrorist activities that have been condoned by P.A. leaders in the past.
The minister has previously threatened to suspend tax transfers to the governing organization, citing similar arguments.
