Finance Minister Smotrich cancels key waiver connecting Israeli and Palestinian banks
Israeli Finance Minister Bezalel Smotrich announced the cancellation of a waiver that allowed Israeli banks to maintain financial ties with Palestinian banks.
“In light of the Palestinian Authority’s campaign to delegitimize the State of Israel internationally, I have instructed Accountant General Yali Rothenberg to revoke the indemnity granted to correspondent banks operating with banks in Palestinian Authority territory,” Smotrich said in a statement announcing his decision.
The cancelled waiver provided legal guarantees to protect banks in Israel with ties to Palestinian banks.
“The waiver had allowed Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority, without the risk of being charged with money laundering and funding extremism,” Reuters explained.
In both Judea and Samaria (West Bank) and Gaza, Palestinians have relied heavily on the Israeli shekel, as Palestinians do not have their own currency.
The decision is, therefore, expected to have a major impact on the Palestinian economy.
According to Reuters, “Palestinian banks would be cut off from the Israeli financial system” without the waiver remaining in effect.
Smotrich’s decision came after he and National Security Minister Itamar Ben Gvir were sanctioned by the United Kingdom, Canada, Australia, New Zealand and Norway on Tuesday.
In a joint statement delivered by the five nations, they accused Smotrich and Ben Gvir of “inciting violence against Palestinians in the West Bank.”
“Settler violence is incited by extremist rhetoric which calls for Palestinians to be driven from their homes, encourages violence and human rights abuses and fundamentally rejects the two-state solution,” the statement continued.
The statement further called for “an immediate ceasefire,” and the return of the hostages still being held by Hamas.
“We want to see a reconstructed Gaza no longer run by Hamas and a political pathway to a two-state solution.”
The All Israel News Staff is a team of journalists in Israel.
