Palestinian businesses owe Israeli counterparts NIS 100m

Self-Employed Association: Small businesses trading with the Palestinian Authority are at risk of collapse.

Palestinian business-persons owe Israeli industry NIS 100 million, and the government should deduct this from funds transferred to the Palestinian Authority, said Manufacturers Association managing director Yoram Blizovsky today, ahead of Tuesday’s cabinet meeting on the issue. Blizovsky added that under a previous cabinet decision, only certain companies, such as the fuel companies and various utility corporations, were entitled to have monies owed them deducted from funds payable to the Palestinian Authority. The manufacturers are now asking that this policy be extended to the business and industrial sectors.

Blizovsky stressed that the problem had been aggravated further following the severing of business ties between Israeli and Palestinian banks, while Israeli business-persons and industrialists continued to trade with the Palestinian business sector, despite the escalating security tension.

The Palestinian market has been a key market for some Israeli manufacturers for many years and has accounted for a substantial portion of factory sales. According to data released by the Manufacturers’ Association, Israel’s sales to the Palestinian Authority in 2005 increased 10% on 2004 to NIS 9 billion. Sales of industrial products increased 15% to NIS 2 billion, of which NIS 400 million were food sales.

Israel Association for the Self-Employed chairman Zeev Weiner warned yesterday that thousands of small businesses trading with the Palestinian Authority were at risk of insolvency and collapse following the severing of business ties between Israeli and Palestinian banks as well the refusal to honor checks given to Israeli suppliers by Palestinian business-persons. Weiner called on the Bank of Israel and Acting Prime Minister and Minister of Finance Ehud Olmert to intervene by allowing banks in Israel to work with foreign banks operating in the Palestinian Authority.

Published by Globes [online], Israel business news - www.globes.co.il - on April 10, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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