Agreement Signed Implementing Economic Issues of Wye-Sharm Memoranda
(Communicated by the Finance Ministry Spokesman)
Jerusalem, June 7, 2000
Finance Minister Avraham Shohat and the head of the interim
agreement negotiating team for the Palestinian Authority, Saeb
Erakat, last night signed the agreement to implement the package
of economic issues included in the Wye-Sharm Memoranda.
The agreement was reached in negotiations conducted between the
teams headed by Finance Ministry Director General Avi Ben-Bassat
and the Economic Adviser to PA Chairman, Mr. Muhammed Rachid. The
negotiations were conducted intermittently following the Wye
Memorandum and entered into high gear after the signing of the
Sharm el-Sheikh Memorandum. In the final stages of negotiation,
US Ambassador to Israel Martin Indyk and the US Consul in
Jerusalem, John Herbst, helped the parties bridge the gaps.
The agreement signed details the parallel implementation of four
economic issues laid out in the Wye-Sharm Memoranda, as follows:
1. Cooperation of the Palestinian Authority in combating vehicle
theft, in which the PA promised to liquidate 20 car-wrecking lots
located within its jurisdiction (Area A) and the establishment of
ongoing mechanisms for cooperation between the Israel Police and
the Palestinian security forces to close down additional
car-wrecking sites should they be opened in the future. It was
also decided to maintain an ongoing exchange of relevant
information between security forces of both sides.
2. The establishment of mechanisms for the payment of unpaid
Palestinian debts to Israeli institutions and PA guarantees of
payment to Israeli car accident victims incurred by vehicles of
PA residents.
3. The expansion of the A1 list of products imported directly
from Egypt and Jordan to the Palestinian Authority by some 1300
tariff items, with a fiscal limit of $20 million annually.
4. Clearance of purchase tax from local production: The Paris
Agreement (April 1994) defined procedures for the clearance of
indirect taxes by Israel and the Palestinian Authority, including
purchase tax on imported goods. The Wye-Sharm Memoranda stated
that with the conclusion of the Wye-Sharm economic package, the
mutual clearance of purchase tax would begin to be applied also
to local production on goods purchased from a defined list of
manufacturers and primary agents only.
This provision, the Finance Ministry notes, will encourage and
increase trade between the Israeli and Palestinian economies,
since without it, the PA preferred imported goods over local
Israeli produce because of tax receipts.
The Finance Ministry stresses that the agreement signed last
night is a single package, aimed at the parallel implementation
of these four issues, in order to verify that the parties meet
their obligations.