NY court unblocks Palestinian bank authority funds

Ramallah, West Bank, Apr 8: A New York court has ordered 30 million dollars 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 yesterday 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 US dollar transactions since 2005 because of a years-old court case brought by the family of Yaron Ungar, an American killed along with his wife in the 1996 shooting in Israel.

But US lawyer David Strachman, who represents the Ungar family, said the funds were in fact not yet released, and remained frozen.

''There are several more steps to go, and we have other mechanisms'' in place to pursue the case, he told Reuters in a telephone interview yesterday.

The suit alleged 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 US and elsewhere,'' he said.

Strachman said however ''the case continues to be litigated.

There are several procedures in place, including an appeal.'' 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 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, was also killed in the attack.

In 2005, a federal court in Rhode Island ordered a freeze of all US-based assets of the Palestinian Authority after the Palestinian government failed to pay 116 million dollars in damages imposed by the court in 2004, according to legal documents.

''We're disappointed,'' Strachman said of the New York ruling, ''and feel the decision goes against the overwhelming weight of authority. ... The Palestinian Authority still refuses, three years later, to pay the judgment and as a result they're legal scofflaws.''

Reuters