Israel withholds tax funds collected for Palestine

Israel has frozen Palestinian tax funds, withholding transfer of $127 million, in a move that is in retaliation for Palestine's decision to join the International Criminal Court.

The Israeli daily Haaretz cited an anonymous Israeli official who said that the $127 million in funds are VAT and customs duties on goods destined for Palestinian territories collected by Israel. The official said: "The funds for the month of December were due to pass on Friday, but it was decided to half the transfer as part of the response to the Palestinian move." The Palestinians submitted documents to the UN in New York applying for membership in the ICC on Friday.

 Prior to the vote on a Palestinian resolution to the UN Security Council sponsored by Jordan, the Palestinian Authority had threatened to go forward with the application to join the court if the resolution failed. It did, as discussed on the appended video. The Palestinians want to level war crimes charges against Israel as well as challenge the legality of Israeli settlement construction in the West Bank and East Jerusalem. It will take at least 60 days before the membership application could result in membership.

 Saeb Erekat. of the Palestine Liberation Organization(PLO) claims that the Israeli retaliation shows that it is frightened by the application: "Israel collects our customs and our taxes for us, so when they withhold these funds, it means that this month people will not be able to pay for their schools, hospitals, medical supplies, milk and bread..They [Israelis] are trying to suffocate the whole [Palestinian] nation.It shows that when it comes to enforcing collective punishment, they are punishing four million Palestinians, starving them, because they want to act with impunity.This shows the legitimacy of what we are doing at the ICC." Palestinian Authority president Mahmoud Abbas is under pressure to show that he is taking action to advance the Palestinian cause after the failure of peace talks and of a recent resolution defeated in the UN Security Council. Israel has deferred tax payments previously in November of 2012 when Palestine gained recognition at the UN as a non-member state. It also deferred payments even earlier in 2011 in May when Fatah and Hamas announced a reconciliation deal, and again in November when Palestine was admitted to UNESCO.

 The tax revenues withheld represent two thirds of the PA budget when you exclude foreign aid. Neither Israel nor the U.S. belong to the ICC. Though both have signed, on both also have indicated that they do not intend to follow up by ratifying the agreement. While opposition to the court was stronger during the Bush administration than under Obama, the U.S. does not appear ready to join: The Bush administration, coming into office in 2001 as the Court neared implementation, adopted an extremely active opposition. Washington began to negotiate bilateral agreements with other countries, insuring immunity of US nationals from prosecution by the Court. As leverage, Washington threatened termination of economic aid, withdrawal of military assistance, and other painful measures. The Obama administration has so far made greater efforts to engage with the Court. It is participating with the Court's governing bodies and it is providing support for the Court's ongoing prosecutions. Washington, however, has no intention to join the ICC, due to its concern about possible charges against US nationals.

 The U.S. has also expressed strong opposition to the Palestinian move to join the ICC. The U.S. also indicated that the move could have implications for U.S. aid to Palestine a senior U.S. official: "It should come as no surprise that there will be implications for this step, but we continue to review," the official told Reuters. U.S. economic support to Palestine amounts to about $400 million each year. Under U.S. laws, if the Palestinians use their ICC membership to press any claims against Israel the aid will be cut off. Israel may possibly attempt to prosecute Palestinian officials for war crimes in the US and elsewhere using pro-Israel NGOs to file lawsuits. Since the reconciliation of Hamas and Fatah in a unity deal completed last April, Israel now sees the PA who run the West Bank as partners with a terrorist organization Hamas. The Israeli prime minister Benjamin Netanyahu had warned Palestinian leaders that any unilateral moves they made could lead to prosecution for their support of Hamas.