Smotrich Issues Economic Threat to PA Over ICC and Statehood Initiatives

Israeli Finance Minister Bezalel Smotrich has announced a series of punitive measures against the Palestinian Authority (PA) in response to its push for unilateral statehood and support for the International Criminal Court (ICC) case against Israel. In a letter to Prime Minister Benjamin Netanyahu, Smotrich declared his intention to halt the transfer of all monthly tax revenues that Israel collects on behalf of the PA.

The announcement came shortly after Norway, Ireland, and Spain recognized a Palestinian state, decisions that were welcomed by the PA and Hamas. Recently, Norway has acted as an intermediary to transfer funds earmarked for the PA, which Israel had frozen following the October 7 Hamas-led terrorist attack in southern Israel.

“Norway was the first to unilaterally recognize a Palestinian state today, and it cannot be a partner in anything related to Judea and Samaria. I intend to stop the transfer of funds and demand the return of all funds transferred,” Smotrich wrote to Netanyahu. Over the past three months, approximately 1 billion shekels ($272 million) have been parked in Norway, while Jerusalem transfers about 600 million shekels ($163 million) to Ramallah directly every month.

“The Palestinians are working against Israel with political terrorism and promoting unilateral measures around the world—I cannot continue to transfer funds to them. If this causes the PA to collapse, let it collapse,” Smotrich was cited as saying by Ynet.

Additionally, Smotrich has canceled a waiver that shielded major Israeli banks with business ties to Ramallah from lawsuits alleging support for terrorism, a move previously warned by the United States as potentially devastating to the PA's economy.

The Religious Zionism Party leader has also demanded that Netanyahu take steps to bolster Jewish communities in Judea and Samaria. This includes the immediate approval of 10,000 new housing units, establishing a new town for each country recognizing “Palestine,” and advancing proposals to strengthen Israel’s hold on the area.

Smotrich is further requesting the permanent revocation of VIP travel passes for PA officials and the imposition of additional sanctions on those leading the campaign against Israel in international bodies.

“I and many other ministers have made an unequivocal demand to take severe measures against the Palestinian Authority for its unilateral actions against Israel, including its pursuit of unilateral recognition of statehood at the U.N. and through bilateral agreements with several countries, and the legal battle it’s waging against the State of Israel in the international court at The Hague to stop the war,” Smotrich wrote. “I don’t intend to allow officials to dismiss the issue. There’s urgency for an immediate response that will impose a significant cost on the PA for its actions and deter it and other countries,” he concluded.

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