Israel has ceased the transfer of Palestinian tax revenues collected on its behalf to Norway, a move seen as a punitive measure following Norway’s recognition of Palestine and its outspoken criticism of Israel. The decision also reflects Israel’s discontent with Norway’s support for International Criminal Court (ICC) arrest warrants against Israeli officials.
The tax revenues in question are intended for Gaza and are collected by Israel as part of the Oslo Accords agreements. According to these accords, Israel is responsible for collecting taxes on behalf of the Palestinian Authority (PA) and transferring the funds monthly, subject to approval by Israel’s finance ministry.
Since November 2023, Israel has withheld Gaza’s share of these tax revenues, freezing the funds. A temporary arrangement in January 2024 saw the funds redirected to a Norwegian-based trust account. However, recent reports from Israeli news website Ynet indicate that Israel is now seeking a new country to manage these funds following a recent decision by Israel’s State Security Cabinet, which was kept confidential.
The controversy traces back to May when Norway officially recognized the state of Palestine. In response, Israel’s far-right Finance Minister Bezalel Smotrich announced that the funds would be “retrieved” and that transfers to Norway would be halted. “Norway was the first to unilaterally recognize a Palestinian state today, so it cannot be a partner in anything related to Judea and Samaria (the occupied West Bank). I intend to stop transferring funds to Norway and demand the return of all funds that were transferred,” Smotrich declared.
Norway’s stance was further solidified by its recent written observation to the ICC, indicating no objection to the arrest warrants issued against Israeli Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant. Norway’s observation clarified that the Oslo Accords, which it had sponsored in 1993, did not impact the court’s jurisdiction.
In light of these developments, Israel, with support from the US, is negotiating with Switzerland to take over the management of the confiscated revenues. Ynet reported that Israeli Minister of Strategic Affairs, Ron Dermer, has recently visited Switzerland to facilitate this arrangement.
Additionally, the Israeli foreign ministry is exploring further punitive measures against Norway, which Israel considers its most critical European counterpart. Recently, Israel recalled its ambassador to Norway, Avi Nir-Feldklein, for consultations, although the Israeli embassy in Oslo remains operational.
In January, the Israeli cabinet approved a proposal to transfer the tax funds designated for the PA to Norway as a temporary measure to prevent the PA’s collapse due to the withholding of funds. The US proposed that Israel transfer approximately 200-250 million shekels per month to a Norwegian fund, with the remaining funds sent directly to the PA. Estimates suggest that around one billion shekels are currently held in the Norwegian account.
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