U.S. court ruling lifts freeze on Palestinian bank authority funds

Last update - 18:43 07/04/2007

By Reuters

A New York court has ordered e30 million in Palestine Monetary Authority funds unfrozen and allowed it to resume operations in the United States after a court fight stemming from a 1996 Hamas attack.

At a press conference in the West Bank city of Ramallah, the Authority said on Saturday an April 2 ruling by the Supreme Court of the State of New York cleared the way for it to carry out functions as the Palestinian central bank.

It had been unable to access the funds or carry out U.S. dollar transactions since 2005 because of a years-old court case brought by the family of Yaron Ungar, an American who was killed along with his wife in the 1996 shooting in Israel.


The suit alleged that the Palestinian Authority was culpable because it failed to take steps to stop Hamas militants from carrying out such attacks.

The Supreme Court of the State of New York said the Palestine Monetary Authority "is a separate entity from the Palestinian Authority and the money in its name ... should be released."

"We're very, very pleased it's over," said George Abed, the Palestine Monetary Authority's governor.

"The PMA will now proceed to reengage in its full range of statutory responsibilities of safeguarding monetary and financial stability and promoting economic growth," he said.

Abed said the order would take effect within days.

"We are now free to operate in dollars in the U.S. and elsewhere," he said.

Abed said the lawsuit had prevented the authority from performing the normal functions of a central bank. Both the Palestinian Authority and the Palestine Monetary Authority were established by the 1994 Oslo Accords.

The court had ruled that the monetary authority performs many of the functions of a national central bank, such as insuring the soundness of the banking system, maintaining monetary stability and encouraging economic growth.

Ungar was a Brooklyn-born rabbinical student in Israel, where he lived with his wife and two young children.

His wife, Efrat, also was killed in the attack.

In 2005, a federal court in Rhode Island ordered a freeze of all U.S.-based assets of the Palestinian Authority after the Palestinian government failed to pay e116 million in damages imposed by the court in 2004, according to legal documents.