Palestinian bank funds remain frozen: US judge

NewYork, Apr 20: A hearing in a New York state court failed to end a deadlock over the potential release of millions of dollars in frozen funds belonging to the Palestinian Monetary Authority, an agency designed to operate as a Palestinian central bank.

State Supreme Court Judge Shirley Kornreich said the dispute should be argued in federal court in New York, where a related legal case is being fought.

The amount of Palestinian Monetary Authority money in question is about 30 million dollars, according to court documents and the judge, although a PMA attorney said the sum is about 18 million dollars.

Kornreich ruled in favor of releasing the PMA funds earlier this month, but the money has not been unfrozen. The money remains in the custody of the Bank of New York.

''I'm not going to opine on this,'' Kornreich said at yesterday's hearing. ''I suggest that you go as quickly as you can to federal court on this matter.'' The PMA has been unable to access the funds or carry out US dollar transactions since 2005 because of a court case brought by the family of Yaron Ungar, an American killed along with his wife in a 1996 shooting in Israel.

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

David Strachman, an attorney for Ungar, argued the PMA dispute belongs in federal court, where an order is in place keeping the assets frozen.

The related federal case involves the family of a separate victim of Palestinian violence, attorneys said. The federal case names the Palestinian Authority and the Palestine Liberation Organisation but not the PMA, according to Scott Emery, an attorney for the PMA.

In her earlier ruling, when she ordered the PMA funds released, the state judge said the PMA was a separate entity from the Palestinian Authority.

Both the Palestinian Authority and the Palestine Monetary Authority were established by the 1994 Oslo Accords.

In her earlier ruling, the judge said PMA performs several functions of a national central bank, such as insuring the soundness of the banking system, maintaining monetary stability and encouraging economic growth.

''We plan to take whatever steps are necessary to get the funds released, whether in state court or federal court or both,'' Emery, the PMA attorney, said after the hearing.

Reuters