PROGRESS MADE BY AD-HOC COMMITTEE - 23-Dec-98

Progress was made at the Israeli-Palestinian economic ad-hoc committee meeting yesterday (Tuesday) 22.12.98 between Finance Ministry Director-General Ben-Zion Zilberfarb and Economic Advisor to the Palestinian Authority Chairman, Muhammad Rashid. Three topics were under discussion: PA debts to Israel; expansion of the A1 list and reciprocal settling of accounts on purchase taxes of locally produced goods. On the matter of the debts, it was decided that the PA would immediately transfer to Israel NIS 5 million for water supplies, and to examine other outstanding debts within two weeks. The Palestinians also promised to settle accounts regarding Palestinian insurance companies' debts to Israeli hospitals within a short time. Regarding the expansion of the A1 list, it was agreed that a professional customs team from both sides would prepare recommendations on the matter. On the final matter, the Director-General agreed in principle to set a system of reciprocal settling of accounts. He noted that in light of the cooperation on the matter of car theft, it was agreed in principle to meet the Palestinian position on purchase taxes of local goods. He noted that purchases taxes on imported goods has already been settled in the framework of the Paris agreements. In summary, Mr. Zilberfarb said, "The real test of the committee's decisions will be the test of implementation." and that discussions will be held on all topics simultaneously in order to build a system of mutual trust and closer economic relations.