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Law for the Freezing and Deduction of Funds Paid by the Palestinian Authority in Connection with Terrorism from the Funds Transferred to It by the Government of Israel, 5778-2018

חוק להקפאה וניכוי של כספים ששילמה הרשות הפלסטינית בזיקה לטרור מהכספים המועברים אליה מממשלת ישראל, תשע"ח-2018

Published: 2018-07-08Consolidated Hebrew text as of 2026-06-11 · Last amended 2026-06-10✓ Amendment status checked against the Knesset legislation record on 2026-09-17
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Purpose of the Law§

1.

The purpose of this Law is to bring about a reduction in terrorist activity and to eliminate the economic incentive for terrorist activity, by prescribing provisions regarding the freezing of funds paid by the Palestinian Authority in connection with terrorism, out of the funds transferred by the Government of Israel to the Palestinian Authority in accordance with the provisions of the Implementation Laws, and to indemnify the State and victims of terrorism for the damage caused by terrorist activity.

Definitions§

2.

In this Law –

"area" – (Repealed)

"provisions of the Implementation Laws" – the provisions of Chapter V of the Law for the Implementation of the Agreement on the Gaza Strip and the Jericho Area (Economic Arrangements and Miscellaneous Provisions) (Legislative Amendments), 5755-1994, and the provisions of Chapter II of the Law for the Implementation of the Agreement on the Preparatory Transfer of Powers to the Palestinian Authority (Legislative Amendments and Miscellaneous Provisions), 5755-1995;

"Ministerial Committee for National Security Affairs" – as defined in Section 6 of the Government Law, 5761-2001;

"Counter-Terrorism Law" – Counter-Terrorism Law, 5776-2016;

"funds paid by the Palestinian Authority in connection with terrorism" – money or money's worth paid by the Palestinian Authority, directly or indirectly, to any of the following:

(1)to a terrorist operative, during the period of his imprisonment or detention or after his release, or to his family members, by reason of his being a terrorist operative;
(2)to a prisoner or detainee who is not a terrorist operative, during the period of his imprisonment or detention or after his release, or to his family members, by reason of the commission or attempted commission of an offence that is capable of harming State security or public security;

"Military Commander in the Area" – the commander of Israel Defence Forces in Judaea and Samaria;

"terrorist operative" – any of the following:

(1)a person convicted of an offence from among the offences listed below, or held in detention on suspicion of committing such an offence:
(a)a terrorism offence as defined in the Counter-Terrorism Law;
(b)an offence under the Prevention of Terrorism Ordinance, 5708-1948, the Prohibition of Terrorist Financing Law, 5765-2005, or regulation 84 or 85 of the Defence (Emergency) Regulations, as worded immediately before their repeal by the Counter-Terrorism Law, or a security offence as defined in the Criminal Procedure Law (Detainee Suspected of a Security Offence) (Temporary Provision), 5766-2006, as worded immediately before its repeal by the Counter-Terrorism Law;
(2)a person held in detention under the Emergency Powers (Detentions) Law, 5739-1979;
(3)a person convicted by a military court as defined in the Defence (Emergency) Regulations of an offence under Part 3 of those Regulations;
(4)a person convicted by a military court as defined in the Emergency Regulations (Judaea and Samaria – Adjudication of Offences and Legal Assistance) of an offence against State security prescribed in the Security Provisions Order, in another Order issued by the Military Commander in the Area, or in the Defence (Emergency) Regulations as in force in the area as defined in the Emergency Regulations (Judaea and Samaria – Adjudication of Offences and Legal Assistance), or a person held in detention on suspicion of committing such an offence;
(5)a person held in detention pursuant to a decision of a military commander in accordance with the provisions of Chapter IX of the Security Provisions Order;
(6)a person held by virtue of an incarceration order or by virtue of a temporary incarceration directive, issued under the provisions of the Unlawful Combatants Imprisonment Law, 5762-2002;
(7)a person who committed an offence referred to in paragraph (1) or (4) and was not prosecuted therefor, or who was killed in the course of committing such an offence or in the course of an attempt to commit it or in preparation therefor;

"Security Provisions Order" – the Security Provisions Order [Consolidated Version] (Judaea and Samaria) (No. 1651), 5770-2009, issued by the Military Commander in the Area, as in force from time to time;

"Palestinian Authority" – the Council as defined in the Emergency Regulations (Judaea and Samaria – Adjudication of Offences and Legal Assistance);

"Defence (Emergency) Regulations" – the Defence (Emergency) Regulations, 1945;

"Emergency Regulations (Judaea and Samaria – Adjudication of Offences and Legal Assistance)" – the Emergency Regulations (Judaea and Samaria – Adjudication of Offences and Legal Assistance), 5727-1967, as their validity has been extended and their wording amended by law, from time to time;

"Minister" – the Minister of Defence.

Annual Report on Funds Paid by the Palestinian Authority in Connection with Terrorism§

3.
(a)The Minister shall bring before the Ministerial Committee for National Security Affairs for approval, at the end of each year, a report setting out data regarding the total funds paid by the Palestinian Authority in connection with terrorism in that year (in this section – report).
(b)Where a freezing of funds was carried out in the year preceding the submission of the report pursuant to the provisions of section 4, the report shall include, in addition to what is stated in subsection (a), data regarding the effect of the freezing in terms of national security and foreign relations of the State.
(c)The Minister shall present the report to the Foreign Affairs and Defence Committee of the Knesset.
(d)The Minister shall publish the report after its approval by the Ministerial Committee for National Security Affairs; however, the Minister may refrain from publishing information contained therein whose disclosure would give rise to a concern of harm to State security.

Freezing of Funds Paid by the Palestinian Authority in Connection with Terrorism from the Funds Transferred to It§

4.
(a)Out of the funds transferred by the Government of Israel to the Palestinian Authority in accordance with the provisions of the Implementation Laws, there shall be frozen each month an amount equal to one-twelfth of the total funds paid by the Palestinian Authority in connection with terrorism in the preceding year, in accordance with the report for that year as approved by the Ministerial Committee for National Security Affairs under section 3(a).
(b)Where the Minister has brought before the Ministerial Committee for National Security Affairs a report as referred to in section 3, according to which the Palestinian Authority did not pay funds in connection with terrorism in the year to which the report relates, the Ministerial Committee may decide to transfer the funds frozen under subsection (a) to the Palestinian Authority, in whole or in part; a decision of the Ministerial Committee under this subsection shall be published to the public.

Deduction of Funds for Terrorism Damages§

5.
(a)The Minister of Finance shall submit to the Ministerial Committee for National Security Affairs, by 28 February of each year, a report setting out all of the following:
(1)the total monthly allowances paid in the calendar year preceding the date of the report under the Victims of Hostile Action (Pensions) Law, 5730-1970, in respect of hostile action injuries carried out by terrorism recipients;
(2)the total compensation paid in the calendar year preceding the date of the report under the Property Tax and Compensation Fund Law, in respect of war damage caused as a result of hostile actions carried out by terrorism recipients;
(3)the total amounts awarded in favour of plaintiffs as referred to in section 2(d)(2) of the Exemplary Damages Law in respect of which enforcement files were opened for the purpose of collection, the total amounts in respect of which interim attachment orders were granted in proceedings as referred to in that section, and the total amounts in respect of which interim attachment orders were cancelled, all in respect of the calendar year preceding the date of the report;
(4)the total compensation that terrorism operatives who are residents of the Area were ordered to pay under section 77 of the Penal Law, 5737-1977, during the calendar year preceding the date of the report, to victims of terrorism offences, and which constitutes a debt as defined in the Fines, Fees and Costs Collection Authority Law, 5755-1995;
(5)the total funds frozen cumulatively under section 4 from the date of commencement of this Law and not yet utilised.
(b)For the purpose of preparing the report referred to in subsection (a) –
(1)
(a)the authorising authority as defined in section 10 of the Victims of Hostile Action (Pensions) Law, 5730-1970 shall transmit to the General Security Service the list of hostile action victims who were injured in hostile action injuries and the hostile action injuries in which they were injured;
(b)the General Security Service shall notify the National Insurance Institute which of the hostile action injuries were carried out by a terrorism recipient, provided that the transmission of such information shall not expose intelligence information or disrupt investigation or judicial proceedings;
(c)the National Insurance Institute shall calculate, on the basis of the data received under sub-paragraphs (a) and (b), the total monthly allowances referred to in subsection (a)(1) and shall transmit the said data to the Ministry of Finance;
(2)the General Security Service shall transmit to the Israel Tax Authority the information it transmitted to the National Insurance Institute under paragraph (1)(b), provided that the transmission of such information shall not expose intelligence information or disrupt investigation or judicial proceedings; the Israel Tax Authority shall calculate, on the basis of the data received as aforesaid, the total compensation paid as referred to in subsection (a)(2) and shall transmit the said data to the Ministry of Finance;
(3)a court that has given a judgment as referred to in subsection (a)(3) shall transmit a copy of the judgment to the Ministry of Finance; the enforcement system shall transmit to the Ministry of Finance the list of enforcement files conducted against the Palestinian Authority as referred to in that subsection and the court files following which those enforcement files were opened, including the current debt amount;
(4)the Fines, Fees and Costs Collection Authority shall transmit to the Ministry of Finance the total current debts in respect of compensation as referred to in subsection (a)(4).
(c)
(1)Where the Ministerial Committee for National Security Affairs has approved a report on funds paid by the Palestinian Authority in connection with terrorism under section 3, the Committee shall determine, by 31 March of each year, an additional amount, over and above the amount frozen under section 4, to be deducted each year from the funds transferred by the Government of Israel to the Palestinian Authority in accordance with the provisions of the Implementation Laws, for the purpose of indemnification for expenses incurred from terrorism damages, on the basis of the information referred to in subsection (a)(1) and (2), provided that it shall not exceed the maximum deduction amount;
(2)before determining the deduction amount, the Ministerial Committee for National Security Affairs shall hear the position of the security authorities, and in its decision shall take into account, inter alia, the report on funds paid by the Palestinian Authority in connection with terrorism under section 3, the payment policy of the Palestinian Authority and the amount frozen under section 4, and shall also consider foreign affairs and security matters;
(3)the Ministerial Committee for National Security Affairs shall determine in its decision the manner of spreading the deduction under this section over the course of the year.
(d)The amount determined by the Ministerial Committee for National Security Affairs under subsection (c) shall be transferred to the State Treasury; however –
(1)where the Ministerial Committee is satisfied that, on the basis of the information transmitted to it under subsection (a)(4), there are debts in respect of non-payment of compensation to victims of terrorism offences, it shall direct that the amount required be transferred to the Fines, Fees and Costs Collection Authority for the purpose of paying those debts, in an amount not exceeding the amount it decided to deduct under subsection (c);
(2)
(a)where the Ministerial Committee is satisfied that the amount of funds frozen under section 4 is less than the difference between the total amounts awarded in favour of plaintiffs and the amounts in respect of which interim attachment orders were granted and the total amounts in respect of which interim attachment orders were cancelled (in this section – the claims amount), all as referred to in subsection (a)(3), it shall direct that the amount it decided to deduct under subsection (c), less the amount referred to in paragraph (1), be added to the amounts frozen as aforesaid;
(b)notwithstanding the provisions of sub-paragraph (a), where the amount it decided to deduct under subsection (c) exceeds the difference between the claims amount and the amount of funds frozen under section 4, it shall direct that an amount equal to that difference be added to the amounts frozen as aforesaid.
(e)Decisions of the Ministerial Committee for National Security Affairs under this section shall be brought to the attention of the Foreign Affairs and Defence Committee of the Knesset shortly after they are given.
(f)In this section –

"the Area" – Judea and Samaria and the Gaza Strip;

"attack" – as defined in the Civil Defence Law, 5711-1951;

"Property Tax and Compensation Fund Law" – Property Tax and Compensation Fund Law, 5721-1961;

"Exemplary Damages Law" – Law for the Compensation of Terrorism Victims (Exemplary Damages), 5784-2024;

"Victims of Hostile Action (Pensions) Law" – Victims of Hostile Action (Pensions) Law, 5730-1970;

"terrorism recipient" – a citizen or resident of Israel or a resident of the Area who, in accordance with the payment policy of the Palestinian Authority, there is reasonable ground to believe that the Palestinian Authority pays him or his family members funds in connection with terrorism;

"war damage" – as defined in section 35 of the Property Tax and Compensation Fund Law, excluding damage caused by an attack;

"maximum deduction amount" – an amount comprising both of the following: 25% of the amount reported under subsection (a)(1), and 100% of the amount reported under subsection (a)(2);

"hostile action injury" – an injury as referred to in paragraphs (1) or (5) of the definition of "hostile action injury" in the Victims of Hostile Action (Pensions) Law, excluding an injury caused by an attack;

"monthly allowance" – an allowance paid in accordance with the provisions of Chapter II of the Fallen Soldiers' Families (Pensions and Rehabilitation) Law, 5710-1950, or in accordance with the provisions of sections 4, 4a and 4c of the Disabled Veterans (Pensions and Rehabilitation) Law, 5719-1959 [Consolidated Version], as applied to the Victims of Hostile Action (Pensions) Law.

Report on Funds Frozen due to the Transfer of Funds to the Gaza Strip§

6.

The Minister of Finance shall report to the Ministerial Committee for National Security Affairs and to the Foreign Affairs and Defence Committee of the Knesset, at the beginning of each year, on the total funds frozen from the funds transferred by the Government of Israel to the Palestinian Authority in accordance with the Implementation Laws, as against funds transferred by the Palestinian Authority to the Gaza Strip.

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חוק להקפאה וניכוי של כספים ששילמה הרשות הפלסטינית בזיקה לטרור מהכספים המועברים אליה מממשלת ישראל, תשע"ח-2018

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