between the Government of the State of Israel and the P.L.O., representing the Palestinian people
PREAMBLE
The two parties view the economic domain as one
of the cornerstone in
their mutual relations with a view to enhance their
interest in the
achievement of a just, lasting and comprehensive peace. Both
parties
shall cooperate in this field in order to establish a sound
economic
base for these relations, which will be governed in various
economic
spheres by the principles of mutual respect of each other's
economic
interests, reciprocity, equity and fairness.
This
protocol lays the groundwork for strengthening the economic base
of the
Palestinian side and for exercising its right of economic
decision making in
accordance with its own development plan and
priorities. The two parties
recognise each other's economic ties with
other markets and the need to
create a better economic environment
for their peoples and
individuals.
Article
I
FRAMEWORK AND SCOPE OF THIS PROTOCOL
1. This
protocol establishes the contractual agreement that will
govern the economic relations between the two sides and
will
cover the West Bank and the Gaza Strip during the
interim period.
The implementation will be according to
the stages envisaged in
the Declaration of Principles on
Interim Self Government
Arrangements signed in Washington
D.C. on September 13, 1993 and
the Agreed Minutes thereto.
It will therefore begin in the Gaza
Strip and the Jericho
Area and at a later stage will also apply
to the rest of
the West Bank, according to the provisions of the
Interim
Agreement and to any other agreed arrangements between
the
two sides.
2. This Protocol, including its Appendixes, will
be incorporated
into the Agreement on the Gaza Strip and
the Jericho Area (in
this Protocol - the Agreement), will
be an integral part thereof
and interpreted accordingly.
This paragraph refers solely to the
Gaza Strip and the
Jericho Area.
3. This Protocol will come into force upon the
signing of the
Agreement.
4. For the
purpose of this Protocol, the term "Areas" means the
areas
under the jurisdiction of the Palestinian Authority,
according to the provisions of the Agreement regarding
territorial jurisdiction.
The Palestinian Jurisdiction in
the subsequent agreements could
cover areas, spheres or
functions according to the Interim
Agreement. Therefore,
for the purpose of this Protocol, whenever
applied, the
term "Areas" shall be interpreted to mean functions
and
spheres also, as the case may be, with the necessary
adjustments.
Article
II
THE JOINT ECONOMIC COMMITTEE
1. Both parties will
establish a Palestinian-Israeli Joint Economic
Committee
(hereinafter - the JEC) to follow up the implementation
of
this Protocol and to decide on problems related to it that
may
arise from time to time. Each side may request the
review of any
issue related to this Agreement by the
JEC.
2. The JEC will serve as the continuing committee for
economic
cooperation envisaged in Annex III of the
Declaration of
Principles.
3. The JEC
will consist of an equal number of members from each side
and may establish sub-committees specified in this
Protocol.
A sub-committee may include experts as
necessary.
4. The JEC and its sub-committees shall reach
their decisions by
agreement and shall determine their
rules of procedure and
operation, including the frequency
and place or places of their
meetings.
Article
III
IMPORT TAXES AND IMPORT POLICY
1. The import and
customs policies of both sides will be according
to the
principles and arrangements detailed in this Article.
2. a.
The Palestinian Authority will have all powers
and
responsibilities in the sphere of
import and customs policy
and procedures
with regard to the following:
(1) Goods on List Al, attached hereto as Appendix
I
locally-produced in Jordan and in Egypt particularly
and
in the other
Arab countries, which the Palestinians
will
be able to
import in quantities agreed upon by the
two
sides up to
the Palestinian market needs as
estimated
according to para 3 below.
(2)
Goods on List A2, attached hereto as Appendix II, from
the
Arab,
Islamic and other countries, which the
Palestinians
will be able to import in quantities agreed upon by
the
two sides up
to the Palestinian market needs as
estimated
according to para 3 below.
b. The import policy
of the Palestinian Authority for Lists
Al
and A2 will include independently
determining and changing
from time to
time the rates of customs, purchase tax,
levies,
excises and other charges, the
regulation of licensing
requirements and
procedures and of standard requirements.
The
valuation for custom purposes will
be based upon the GATT 1994
agreement as
of the date it will be introduced in Israel,
and
until then - on the Brussels
Definition of Valuation (BDV)
system.
The classification of goods will be based on
the
principles of "the Harmonized
Commodity Description and Coding
System". Concerning imports referred to in Article VII of
this
Protocol (Agriculture), the
provisions of that Article will
apply.
3. For the purposes of para 2(a) above, the
Palestinian market needs
for 1994 will be estimated by a
sub-committee of experts. These
estimates will be based on
the best available data regarding past
consumption,
production, investment and external trade of the
Areas.
The sub-committee will submit its estimate within three
months from the signing of the Agreement. These estimates will
be
reviewed and updated every six months by the
sub-committee, on
the basis of the best data available
regarding the latest period
for which relevant data are
available, taking into consideration
all relevant economic
and social indicators. Pending an agreement
on the
Palestinian market needs, the previous period's estimates
adjusted for population growth and rise in per-capita GNP in
the
previous period, will serve as provisional
estimates.
4. The Palestinian Authority will have all powers
and
responsibilities to independently determine and change
from time
to time the rates of customs, purchase taxes;
levies, excises and
other charges on the goods on List B,
attached hereto as Appendix
III, of basic food items and
other goods for the Palestinian
economic development
program, imported by the Palestinians to the
Areas.
5. a. With respect to all goods not specified in Lists
Al, A2 and B,
and with respect to
quantities exceeding those determined in
accordance with paras 2(a) & 3 above (hereinafter -
the
Quantities), the Israeli rates of
customs, purchase tax,
levies, excises
and other charges, prevailing at the date
of
signing of the Agreement, as changed
from time to time, shall
serve as the
minimum basis for the Palestinian Authority.
The
Palestinian Authority may decide on
any upward changes in the
rates on these
goods and exceeding quantities when imported
by
the Palestinians to the
Areas.
b. With respect to all goods not
specified in Lists A1 and A2,
and with
respect to quantities exceeding the
Quantities,
Israel and the Palestinian
Authority will employ for all
imports
the same system of importation, as stipulated in
para
10 below, including inter alia
standards, licensing, country
of origin,
valuation for customs purposes etc.
6. Each side will notify
the other side immediately of changes made
in rates and in
other matters of import policy, regulations and
procedures, determined by it within its respective powers
and
responsibilities as detailed in this Article. With
regard to
changes which do not require immediate
application upon decision,
there will be a process of
advance notifications and mutual
consultations which will
take into consideration all aspects and
economic
implications.
7. The Palestinian Authority will levy VAT at
one rate on both
locally produced goods and services and
on imports by the
Palestinians (whether covered by the
three Lists mentioned above
or not), and may fix it at the
level of 15% to 16%.
8. Goods imported from Jordan, Egypt and
other Arab countries
according to para 2(a)(1) above (List
A1) will comply with rules
of origin agreed upon by a
joint sub-committee within three
months of the date of the
signing of the Agreement. Pending an
agreement, goods will
be considered to have been "locally
produced" in any of
those countries if they conform with all the
following:
a. (i) They have been wholly grown,
produced, or manufactured in
that
country, or have been substantially transformed
there
into new or different goods,
having a new name, character, or
use,
distinct from the goods or materials from which they
were
so
transformed;
(ii) They have
been imported directly from the said
country;
(iii) The value or
the costs of the materials produced in
that
country, plus the direct processing
costs in it, do not fall
short of 30
percent of the export value of the goods.
This
rate may be reviewed by the joint
committee mentioned in para
16 a year
after the signing of the
Agreement.
(iv) The goods are
accompanied by an internationally
recognized certificate of
origin;
(v) No goods will be
deemed as substantially new or different
goods, and no material will be eligible for inclusion
as
domestic content, by virtue of having
merely undergone simple
combining or
packaging, or dilution with water or
other
substances, which do not
materially alter the characteristics
of
the said goods.
9. Each side will issue import licences to
its own importers,
subject to the principles of this
Article and will be responsible
for the implementation of
the licensing requirements and
procedures prevailing at
the time of the issuance of the
licenses.
Mutual arrangements will be made for the
exchange of information
relevant to licensing
matters.
10. Except for the goods on Lists A1 and A2 and their
Quantities - in
which the Palestinian Authority has all
powers and
responsibilities, both sides will maintain the
same import policy
(except for rates of import taxes and
other charges for goods in
List B) and regulations
including classification, valuation and
other customs
procedures, which are based on the principles
governing
international codes, and the same policies of import
licensing and of standards for imported goods, all as applied
by
Israel with respect to its importation. Israel may from
time to
time introduce changes in any of the above,
provided that changes
in standard requirements will not
constitute a non-tariff-barrier
and will be based on
considerations of health, safety and the
protection of the
environment in conformity with Article 2.2. of
the
Agreement on Technical Barriers to trade of the Final Act
of
the Uruguay Round of Trade
Negotiations.
Israel will give the Palestinian Authority
prior notice of any
such changes, and the provisions of
para 6 above will apply.
11. a. The Palestinian Authority will
determine its own rates of
customs and
purchase tax on motor vehicles imported as
such,
to be registered with the
Palestinian Authority. The vehicle
standards will be those applied at the date of the signing
of
the Agreement as changed according to
para 10 above.
However, the Palestinian
Authority may request, through the
sub-committee on transportation, that in special
cases
different standards will
apply.
Used motor vehicles will be
imported only if they are
passenger cars
or dual-purpose passenger cars of a model
of
no more than three years prior to the
importation year. The
sub-committee on
transportation will determine the
procedures
for testing and confirming
that such used cars comply with the
standards' requirements for that model
year.
The issue of importing commercial
vehicles of a model prior to
the
importation year will be discussed in the
joint
sub-committee mentioned in para 16
below.
b. Each side may determine the terms and
conditions for the
transfer of motor
vehicles registered in the other side to
the
ownership or use of a resident of
its own side, including the
payment of
the difference of import taxes, if any, and
the
vehicle having been tested and found
compatible with the
standards required
at that time by its own registration
administration, and may prohibit transfer of vehicles.
12. a.
Jordanian standards, as specified in the attached Appendix
I,
will be acceptable in importing
petroleum products into the
Areas, once
they meet the average of the standards existing
in
the European Union countries, or the
USA standards, which
parameters have
been set at the values prescribed for
the
geographical conditions of Israel,
the Gaza Strip and the West
Bank.
Cases of petroleum products which
do not meet these
specifications will be
referred to a joint experts' committee
for a suitable solution. The committee may mutually decide
to
accept different standards for the
importation of gasoline
which meet the
Jordanian standards even though, in some
of
their parameters, they do not meet
the European Community or
USA standards.
The committee will give its decision within
six
months.
Pending the committee's
decision, and for not longer than six
months of the signing of the Agreement, the
Palestinian
Authority may import to the
Areas, gasoline for the
Palestinian
market in the Areas, according to the needs
of
this market, provided
that:
(1) this gasoline is
marked in a distinctive colour
to
differentiate
it from the gasoline marketed in Israel;
and
(2) the Palestinian
Authority will take all the
necessary
steps
to ensure that this gasoline is not marketed
in
Israel.
b. The difference in the final price of
gasoline to consumers in
Israel and to
consumers in the Areas, will not exceed 15%
of
the official final consumer price in
Israel. The Palestinian
Authority has
the right to determine the prices of
petroleum
products, other than gasoline,
for consumption in the Areas.
c. If Egyptian
gasoline standards will comply with the
conditions
of sub-para (a) above, the
importation of Egyptian gasoline
will
also be allowed.
13. In addition to the points of exit and entry
designated according
to the Article regarding Passages in
Annex I of the Agreement for
the purpose of export and
import of goods, the Palestinian side
has the right to use
all points of exit and entry in Israel
designated for that
purpose. The import and export of the
Palestinians through
the points of exit and entry in Israel will
be given equal
trade and economic treatment.
14. In the entry points of the Jordan
River and the Gaza Strip:
a. Freight
shipment
The Palestinian
Authority will have full responsibility
and
powers in the Palestinian customs
points (freight-area) for
the
implementation of the agreed upon customs and
importation
policy as specified in this
protocol, including the inspection
and
the collection of taxes and other charges, when
due.
Israeli customs officials
will be present and will receive
from
the Palestinian customs officials a copy of the
necessary
relevant documents related to
the specific shipment and will
be
entitled to ask for inspection in their presence of
both
goods and tax
collection.
The Palestinian
customs officials will be responsible for
the
handling of the customs procedure
including the inspection and
collection
of due taxes.
In case of
disagreement on the clearance of any
shipment
according to this Article, the
shipment will be delayed for
inspection
for a maximum period of 48 hours during which
a
joint sub-committee will resolve the
issue on the basis of the
relevant
provisions of this Article. The shipment will
be
released only upon the
sub-committee's decision.
b. Passengers customs
lane
Each side will administer
its own passengers customs
procedures,
including inspection and tax collection.
The
inspection and collection of taxes
due in the Palestinian
customs lane will
be conducted by customs officials of the
Palestinian Authority.
Israeli
customs officials will be invisibly present in
the
Palestinian customs lane and
entitled to request inspection of
goods
and collection of taxes when due. In the case
of
suspicion, the inspection will be
carried out by the
Palestinian official
in a separate room in the presence of
the
Israeli customs
official.
15. The clearance of revenues from all import taxes and
levies,
between Israel and the Palestinian Authority, will
be based on
the principle of the place of final
destination. In addition,
these tax revenues will be
allocated to the Palestinian Authority
even if the
importation was carried out by Israeli importers when
the
final destination explicitly stated in the import
documentation is a corporation registered by the
Palestinian
Authority and conducting business activity in
the Areas. This
revenue clearance will be effected within
six working days from
the day of collection of the said
taxes and levies.
16. The Joint Economic Committee or a
sub-committee established by it
for the purposes of this
Article will deal inter alia with the
following:
1) Palestinian proposals for addition
of items to Lists A1, A2
and B.
Proposals for changes in rates and in
import
procedures, classification,
standards and licensing
requirements for
all other imports,
2) Estimate the Palestinian
market needs, as mentioned in para 3
above;
3) Receive notifications of changes and
conduct consultations, as
mentioned in
para 6 above;
4) Agree upon the rules of origin
as mentioned in para 8 above,
and review
their implementation;
5) Co-ordinate the
exchange of information relevant to
licensing
matters as mentioned in para 9
above.
6) Discuss and review any other matters
concerning the
implementation of this
Article and resolve problems arising
therefrom.
17. The Palestinian Authority will have the right to
exempt the
Palestinian returnees who will be granted
permanent residency in
the Areas from import taxes on
personal belongings including
house appliances and
passenger cars as long as they are for
personal
use.
18. The Palestinian Authority will develop its system for
temporary
entry of needed machines and vehicles used for
the Palestinian
Authority and the Palestinian economic
development plan.
Concerning other machines and
equipment, not included in Lists
A1, A2 and B, the
temporary entry will be part of the import
policy as
agreed in para 10 above, until the joint sub-committee
mentioned in para 16 decides upon a new system proposed by
the
Palestinian Authority. The temporary entry will be
coordinated
through the joint
sub-committee.
19. Donations in kind to the Palestinian Authority
will be exempted
from customs and other import taxes if
destined and used for
defined development projects or
non-commercial humanitarian
purposes.
The Palestinian Authority will be responsible
exclusively for
planning and management of the donors'
assistance to the
Palestinian people. The Joint Economic
Committee will discuss
issues pertaining to the relations
between the provisions in this
Article and the
implementation of the principles in the above
paragraph.
Article
IV
MONETARY AND FINANCIAL ISSUES
1. The Palestinian
Authority will establish a Monetary Authority
(PMA) in the
Areas.
The PMA will have the powers and responsibilities
for the
regulation and implementation of the monetary
policies within the
functions described in this
Article.
2. The PMA will act as the Palestinian Authority's
official economic
and financial
advisor.
3. The PMA will act as the Palestinian Authority's
and the public
sector entities' sole financial agent,
locally and
internationally.
4. The
foreign currency reserves (including gold) of the
Palestinian
Authority and all Palestinian public sector
entities will be
deposited solely with the PMA and managed
by it.
5. The PMA will act as the lender of last resort for
the banking
system in the Areas.
6. The
PMA will authorize foreign exchange dealers in the Areas
and
will exercise control (regulation and supervision)
over foreign
exchange transactions within the Areas and
with the rest of the
world.
7. a. The
PMA will have a banking supervision department that
will
be responsible for the proper
functioning, stability, solvency
and
liquidity of the banks operating in the Areas.
b. The banking supervision department will predicate
its
supervision on the international
principles and standards
reflected in
international conventions and especially on
the
principles of the "Basle
Committee".
c. The supervision department will
be charged with the general
supervision
of every such bank, including:
-The
regulation of all kinds of banking activities,
including
their foreign
activities;
-The licensing of banks
formed locally and of branches,
subsidiaries, joint ventures and representative offices
of
foreign banks and the approval of
controlling shareholders;
-The
supervision and inspection of banks.
8. The PMA will
relicense each of the five branches of the Israeli
banks
operating at present in the Gaza Strip and the West Bank,
as soon as its location or the authorities regarding it
come
under the jurisdiction of the Palestinian Authority.
These
branches will be required to comply with the general
rules and
regulations of the PMA concerning foreign banks,
based on the
"Basle Concordat". Para I0 d, e, and f below
will apply to these
branches.
9. a. Any
other Israeli bank wishing to open a branch or
a
subsidiary in the Areas will apply for
a license to the PMA
and will be treated
equally to other foreign banks, provided
that the same will apply to the Palestinian banks wishing
to
open a branch or a subsidiary in
Israel.
b. Granting of a license by both
authorities will be subject to
the
following arrangements based on the "Basle
Concordat"
valid on the date of signing
of the Agreement and to the host
authority's prevailing general rules and
regulations
concerning opening of
branches and subsidiaries of foreign
banks.
In this para 10 "host
authority" and "home authority" apply
only to the Bank of Israel (BOI) and the PMA.
c.
A bank wishing to open a branch or establish a subsidiary
will
apply to the host authority, having
first obtained the
approval of its home
authority. The host authority will
notify
the home authority of the terms
of the license, and will give
its final
approval unless the home authority objects.
d.
The home authority will be responsible for the
consolidated
and comprehensive
supervision of banks, inclusive of
branches
and subsidiaries in the area
under the jurisdiction of the
host
authority. However, the distribution of
supervision
responsibilities between the
home and the host authorities
concerning
subsidiaries will be according to the
"Basle
Concordat".
e. The host authority will regularly
examine the activities of
branches and
subsidiaries in the area under its
jurisdiction.
The home authority will
have the right to conduct on site
examinations in the branches and subsidiaries in the
host
area. However, the supervision
responsibilities of the home
authority
concerning subsidiaries will be according to
the
"Basle
Concordat".
Accordingly, each authority
will transfer to the other
authority
copies of its examination reports and
any
information relevant to the
solvency, stability and soundness
of the
banks, their branches and subsidiaries.
f. The
BOI and the PMA will establish a mechanism for
cooperation
and for the exchange of
information on issues of mutual
interest.
10. a. The New Israeli Sheqel (NIS) will be one of the
circulating
currencies in the Areas and
will legally serve there as means
of
payment for all purposes including official
transactions.
Any circulating currency,
including the NIS, will be accepted
by
the Palestinian Authority and by all its
institutions,
local authorities and
banks, when offered as a means of
payment for any transaction.
b. Both sides will
continue to discuss, through the JEC,
the
possibility of introducing mutually
agreed Palestinian
currency or temporary
alternative currency arrangements for
the Palestinian Authority.
11. a. The liquidity requirements on all
deposits in banks operating
in the Areas
will be determined and announced by the PMA.
b.
Banks in the Areas will accept NIS deposits. The
liquidity
requirements on the various
kinds of NIS deposits (or deposit
linked
to the NIS) in banks operating in the Areas will not
be
less than 4% to 8%, according to the
type of deposits. Changes
of over 1% in
the liquidity requirements on NIS deposits
(or
deposits linked to the NIS) in
Israel will call for
corresponding
changes in the above mentioned rates.
c. The
supervision and inspection of the implementation of
all
liquidity requirements will be
carried out by the PMA.
d. The reserves and the
liquid assets required according to this
paragraph will be deposited at the PMA according to rules
and
regulations determined by it.
Penalties for non compliance
with the
liquidity requirements will be determined by the PMA.
12. The PMA
will regulate and administer a discount window system and
the supply of temporary finance for banks operating in the
Areas.
13. a. The PMA will establish or license a clearing house in
order to
clear money orders between the
banks operating in the Areas,
and with
other clearing houses.
b. The clearing of money
orders and transactions between banks
operating in the Areas and banks operating in Israel will
be
done between the Israeli and the
Palestinian clearing houses
on same
working day basis, according to agreed arrangements.
14. Both sides
will allow correspondential relations between each
others'
banks.
15. The PMA will have the right to convert at the BOI excess
NIS
received from banks operating in the Areas into
foreign currency,
in which the BOI trades in the domestic
inter-bank market, up to
the amounts determined per
period, according to the arrangements
detailed in para 16
below.
16. a. The excess amount of NIS, due to balance of payments
flows,
that the PMA will have the right
to convert into foreign
currency, will
be equal to:
(1) Estimates of
all Israeli "imports" of goods and
services
from
the Areas, valued at market prices (inclusive
of
taxes), which
were paid for in NIS,
less:
(i) the
taxes collected by the Palestinian Authority
on
all Israeli
"imports" from the Areas and rebated to
Israel
in NIS,
and
(ii) the
taxes collected by Israel on all
Israeli
"imports" from the Areas and included in their
market
value,
and not rebated to the Palestinian
Authority,
minus
(2) Estimates of all Israeli
"exports" of goods and
services
to the
Areas, valued at market prices (inclusive
of
taxes), which
were paid for in NIS,
less:
(i) the
taxes collected by Israel on such "exports"
and
rebated to
the Palestinian Authority,
and
(ii) the
taxes collected by the Palestinian Authority
on
such
"exports" and included in their market value, and
not
rebated to
Israel;
plus
(3) The accumulated net amounts of
foreign currency
converted
previously into NIS by the PMA, as recorded in the
BOI
Dealing
Room.
b. The said flows and amounts will be
calculated as of the date
of the signing
of the Agreement.
Notes to para
16:
(i) The estimates of the
said "exports and imports" of
goods
and
services will include inter alia labor services,
NIS
expenditure
of tourists and Israelis in the Areas and
NIS
expenditure
of Palestinians of the Areas in
Israel.
(ii) Taxes and pension
contributions on "imports" of
labor
services, paid to "importing" side and rebated to
the
"exporting" one, will not be included in the estimates
of
the
sums to be converted, as the "exports'" earnings
of
labor
services are recorded in the statistics
inclusive
of them, although they do not accrue to the
individuals
supplying them.
17. The PMA and the BOI will meet annually to
discuss and determine
the annual amount of convertible NIS
during the following
calendar year and will meet
semi-annually to adjust the said
amount. The amounts
determined annually and adjusted
semi-annually will be
based on data and estimates regarding the
past and on
forecasts for the following period, according to the
formula mentioned in para 16. The first meeting will be as
soon
as possible within three months after the date of the
signing of
the Agreement.
18. a. The exchange
of foreign currency for NIS and vice-versa by
the
PMA will be carried out through the
BOI Dealing Room, at the
market exchange
rates.
b. The BOI will not be obliged to convert
in any single month
more than 1/5 of the
semi-annual amount, as mentioned in para
17.
19. There will be no ceiling on the annual foreign
currency
conversions by the PMA into NIS. However, in
order to avoid
undesirable fluctuations in the foreign
exchange market, monthly
ceilings of such conversions will
be agreed upon in the annual
and semi-annual meetings
referred to in para 17.
20. Banks in the Areas will convert NIS
into other circulating
currencies and
vice-versa.
21. The Palestinian Authority will have the
authorities, powers and
responsibilities regarding the
regulation and supervision of
capital activities in the
Areas, including the licensing of
capital market
institutions, finance companies and investment
funds.
Article
V
DIRECT TAXATION
1. Israel and the Palestinian
Authority will each determine and
regulate independently
its own tax policy in matters of direct
taxation,
including income tax on individuals and corporations,
property taxes, municipal taxes and fees.
2. Each tax
administration will have the right to levy the direct
taxes generated by economic activities within its area.
3.
Each tax administration may impose additional taxes on
residents
within its area on (individuals and
corporations) who conduct
economic activities in the other
side's area.
4. Israel will transfer to the Palestinian
Authority a sum equal to:
a. 75% of the income
taxes collected from Palestinians from
the
Gaza Strip and the Jericho Area
employed in Israel.
b. The full amount of income
taxes collected from Palestinians
from
the Gaza Strip and Jericho Area employed in
the
settlements.
5.
The two sides will agree on a set of procedures that will
address
all issues concerning double
taxation.
Article
VI
INDIRECT TAXES ON LOCAL PRODUCTION
1. The Israel
and the Palestinian tax administrations will levy and
collect VAT and purchase taxes on local production, as well
as
any other indirect taxes, in their respective
areas.
2. The purchase tax rates within the jurisdiction of
each tax
administration will be identical as regards
locally produced and
imported goods.
3.
The present Israeli VAT rate is 17%. The Palestinian VAT
rate
will be 15% to 16%.
4. The
Palestinian Authority will decide on the maximum annual
turnover for businesses under its jurisdiction to be exempt
from
VAT, within an upper limit of 12,000 US
$.
5. The VAT on purchases by businesses registered for VAT
purposes
will accrue to the tax administration with which
the respective
business is
registered.
Businesses will register for VAT
purposes with the tax
administration of the side of their
residence, or on the side of
their ongoing
operation.
There will be clearance of VAT
revenues between the Israeli and
Palestinian VAT
administrations on the following conditions:
a.
The VAT clearance will apply to VAT on transactions
between
businesses registered with the
VAT administration of the side
in which
they reside.
b. The following procedures will
apply to clearance of VAT
revenues
accruing from transactions by businesses
registered
for VAT
purposes:
(1) To be acceptable
for clearance purposes, special
invoices,
clearly marked for this purpose, will be used
for
transactions
between businesses registered with
the
different
sides.
(2) The invoices will
be worded either in both Hebrew
and
Arabic or in
English and will be filled out in any
of
these three
languages, provided that the figures
are
written in
"Arabic" (not Hindi) numerals.
(3) For the purpose of tax rebates, such invoices will
be
valid for six
months from their date of
issue.
(4) Representatives of
the two sides will meet once a
month,
on the
20th day of the month, to present each other with
a
list of
invoices submitted to them for tax rebate, for
VAT
clearance.
This list will include the following
details
regarding each
invoice:
(a) The
number of the registered business issuing
it;
(b) The name
of the registered business issuing
it;
(c) The
number of the
invoice;
(d) The
date of issue;
(e) The amount of the
invoice;
(f) The
name of the recipient of the
invoice.
(5) The clearance
claims will be settled within 6 days
from
the
meeting, through a payment by the side with the
net
balance of
claims against it, to the other
side.
(6) Each side will
provide the other side, upon demand,
with
invoices
for verification purposes. Each
tax
administration will be responsible for providing
invoices
for
verification purposes for 6 months after
receiving
them.
(7) Each side will take
the necessary measure to verify
the
authenticity
of the invoices presented to it for
clearance
by the
other side.
(8) Claims for VAT
clearance which will not be found
valid
will be
deducted from the next clearance
payment.
(9) Once an
inter-connected computer system for tax rebates
to
businesses
and for VAT clearance between the two sides
is
operational,
it will replace the clearance
procedures
specified in sub-paras (4) -
(8).
(10) The two tax
administrations will exchange lists of
the
businesses
registered with them and will provide
each
other with
the necessary documentation, if required,
for
the
verification of transactions.
(11) The two sides will establish a sub-committee which
will
deal with
the implementation arrangements regarding
the
clearance of
VAT revenues set above.
6. VAT paid by not-for-profit
Palestinian organizations and
institutions, registered by
the Palestinian Authority, on
transactions in Israel, will
accrue to the Palestinian tax
administration. The
clearance system set out in para 5 will apply
to these
organizations and
institutions.
Article
VII
LABOR
1. Both sides will attempt to maintain the
normality of movement of
labor between them, subject to
each side's right to determine
from time to time the
extent and conditions of the labor movement
into its area.
If the normal movement is suspended temporarily by
either
side, it will give the other side immediate notification,
and the other side may request that the matter be discussed
in
the Joint Economic
Committee.
The placement and employment of
workers from one side in the area
of the other side will
be through the employment service of the
other side and in
accordance with the other sides' legislation.
The
Palestinian side has the right to regulate the employment
of
Palestinian labor in Israel through the Palestinian
employment
service, and the Israeli Employment Service
will cooperate and
coordinate in this
regard.
2. a. Palestinians employed in Israel will be insured
in the Israeli
social insurance system
according to the National Insurance
Law
for employment injuries that occur in Israel,
bankruptcy
of employers and maternity
leave allowance.
b. The National Insurance fees
deducted from the wages for
maternity
insurance will be reduced according to the
reduced
scope of maternity insurance,
and the equalization deductions
transferred to the Palestinian Authority, if levied, will
be
increased
accordingly.
c. Implementation procedures
relating thereto will be agreed upon
between the Israeli National Insurance Institute and
the
Palestinian Authority or the
appropriate Palestinian social
insurance
institution.
3. a. Israel will transfer to the Palestinian
Authority, on a
monthly basis, the
equalization deductions as defined by
Israeli legislation, if imposed and to the extent levied
by
Israel. The sums so transferred will
be used for social
benefits and health
services, decided upon by the
Palestinian
Authority, for Palestinians
employed in Israel and for their
families.
The equalization
deductions to be so transferred will be
those
collected after the date of the
signing of the Agreement from
wages of
Palestinians employed in Israel and from
their
employers.
These sums will not
include
(1) Payments for
health services in places of
employment.
(2) 2/3 of the
actual administrative costs in handling
the
matters
related to the Palestinians employed in Israel
by
the Payments
Section of the Israeli Employment Service.
4. Israel will
transfer, on a monthly basis, to a relevant pension
insurance institution to be established by the Palestinian
Authority, pension insurance deductions collected after
the
establishment of the above institution and the
completion of the
documents mentioned in para
6.
These deductions will be collected from wages
of Palestinians
employed in Israel and their employers,
according to the relevant
rates set out in the applicable
Israeli collective agreements.
2/3 of the actual
administrative costs in handling these
deductions by the
Israeli Employment Service will be deducted
from the sums
transferred. The sums so transferred will be used
for
providing pension insurance for these workers. Israel will
continue to be liable for pension rights of the
Palestinian
employees in Israel, to the extent accumulated
by Israel before
the entry into force of this para
4.
5. Upon the receipt of the deductions, the Palestinian
Authority and
its relevant social institutions will assume
full responsibility
in accordance with the Palestinian
legislation and arrangements,
for pension rights and other
social benefits of Palestinians
employed in Israel, that
accrue from the transferred deductions
related to these
rights and benefits. Consequently, Israel and
its relevant
social institutions and the Israeli employers will
be
released from, and will not be held liable for any
obligations
and responsibilities concerning personal
claims, rights and
benefits arising from these transferred
deductions, or from the
provisions of paras 2-4
above.
6. Prior to the said transfers, the Palestinian
Authority or its
relevant institutions, as the case may
be, will provide Israel
with the documents required to
give legal effect to their
aforesaid obligations,
including mutually agreed implementation
procedures of the
principles agreed upon in paras 3-5 above.
7. The above
arrangements concerning equalization deductions and/or
pension deductions may be reviewed and changed by Israel if
an
authorized court in Israel will determine that the
deductions or
any part thereof must be paid to
individuals, or used for
individual social benefits or
insurance in Israel, or that it is
otherwise unlawful. In
such a case the liability of the
Palestinian side will not
exceed the actual transferred
deductions related to the
case.
8. Israel will respect any agreement reached between
the Palestinian
Authority, or an organization or
trade-union representing the
Palestinians employed in
Israel, and a representative
organization of employees or
employers in Israel, concerning
contributions to such
organization according to any collective
agreement.
9. a. The Palestinian Authority may integrate the
existing health
insurance scheme for
Palestinians employed in Israel and
their
families in its health insurance
services. As long as this
scheme
continues, whether integrated or separately,
Israel
will deduct from their wages the
health insurance fees
("health stamp")
and will transfer them to the
Palestinian
Authority for this
purpose.
b. The Palestinian Authority may
integrate the existing health
insurance
scheme for Palestinians who were employed in
Israel
and are receiving pension
payments through the Israeli
Employment
Service, in its health insurance services. As
long
as this scheme continues, whether
integrated or separately,
Israel will
deduct the necessary sum of health insurance
fees
("health stamp") from the
equalization payments and will
transfer
them to the Palestinian Authority for this purpose.
10. The JEC
will meet upon the request of either side and review the
implementation of this Article and other issues concerning
labor,
social insurance and social
rights.
11. Other deductions not mentioned above, if any, will be
jointly
reviewed by the JEC. Any agreement between the two
sides
concerning these deductions will be in addition to
the above
provisions.
12. Palestinians
employed in Israel will have the right to bring
disputes
arising out of employee - employer relationships and
other
issues before the Israeli Labor Courts, within these
courts' jurisdiction.
13. This Article governs the future labor
relations between the two
sides and will not impair any
labor rights prior to the date of
signing of the
Agreement.
Article
VIII
AGRICULTURE
1. There will be free movement of
agricultural produce, free of
customs and import taxes,
between the two sides, subject to the
following exceptions
and arrangements.
2. The official veterinary and plant
protection services of each
side will be responsible,
within the limits of their respective
jurisdiction, for
controlling animal health, animal products and
biological
products, and plants and parts thereof, as well as
their
importation and exportation.
3. The relations between the
official veterinary and plant
protection services of both
sides will be based on mutuality in
accordance with the
following principles, which will be applied
in all the
areas under their respective jurisdiction:
a.
Israel and the Palestinian Authority will do their utmost
to
preserve and improve the veterinary
standards.
b. Israel and the Palestinian
Authority will take all measures to
reach equivalent and compatible standards regarding
animal
disease control, including mass
vaccination of animals and
avians,
quarantines, "stamping out" measures and
residue
control
standards.
c. Mutual arrangements will be made
to prevent the introduction
and spread
of plant pests and diseases, for their
eradication
and concerning residue
control standards in plant products.
d. The
official veterinary and plant protection services
of
Israel and the Palestinian Authority
will co-ordinate and
regularly exchange
information regarding animal diseases,
as
well as plant pests and diseases, and
will establish a
mechanism for immediate
notification of the outbreak of such
diseases.
4. Trade between the two sides in animals, animal
products and
biological products will be in keeping with
the principles and
definitions set out in the current
edition of the OIE National
Animal Health Code as updated
from time to time (hereinafter -
I.A.H.C.)
5. Transit of livestock, animal products and
biological products
from one side through the area under
the jurisdiction of the
other side, should be conducted in
a manner aimed at the
prevention of diseases spreading to
or from the consignment
during its movement. For such a
transit to be permitted, it is a
prerequisite that the
veterinary conditions agreed upon by both
sides will be
met in regard to importation of animals, their
products
and biological products from external markets. Therefore
the parties agree to the following arrangements.
6. The
official veterinary services of each side have the
authority
to issue veterinary import permits for import of
animals, animal
products and biological products to the
areas under its
jurisdiction. In order to prevent the
introduction of animal
diseases from third parties, the
following procedures will be
adopted:
a. The import permits will strictly
follow the professional
veterinary
conditions for similar imports to Israel
as
prevailing at the time of their
issuance. The permits will
specify the
country of origin and the required conditions
to
be included in the official
veterinary certificates which
should be
issued by the veterinary authorities in
the
countries of origin and which should
accompany each
consignment.
Each side may
propose a change in these conditions. The
change
will come into force 10 days
after notice to the other side,
unless
the other side requested that the matter be
brought
before the Veterinary
Sub-Committee specified in para 14
(hereinafter - VSC). If it is more stringent than
the
prevailing conditions - it will come
into force 20 days after
the request,
unless both sides decide otherwise through
the
VSC, and if more lenient - it will
come into force only if
agreed upon by
both sides through the VSC.
However, if
the change is urgent and needed for the
protection
of animal and public health,
it will come into force
immediately
after notice by the other side and will remain
in
force unless and until both sides
agree otherwise through the
VSC.
b. The official veterinary certificates
will include the
provisions regarding
OIE Lists A & B Diseases as specified
in
the I.A.H.C. When the I.A.H.C. allows
alternative requirements
regarding the
same disease, the most stringent one will
be
adopted unless otherwise agreed upon
by the VSC.
c. When infectious diseases which
are not included in Lists A & B
of
the I.A.H.C. exist or are suspected, on scientific
grounds,
to exist in the exporting
country, the necessary veterinary
import
conditions that will be required and included in
the
official veterinary certificates,
will be discussed in the
VSC, and in the
case of different professional opinions,
the
most stringent ones will be
adopted.
d. The import of live vaccines will be
permitted only if so
decided by the
VSC.
e. Both sides will exchange, through the
VSC, information
pertaining to import
licensing, including the evaluation of
the disease situation and zoosanitary capability of
exporting
countries, which will be based
upon official information as
well as
upon other available data.
f. Consignments which
do not conform with the above mentioned
requirements will not be permitted to enter the areas
under
the jurisdiction of either
side.
7. Transportation of livestock and poultry and of
animal products
and biological products between areas
under the jurisdiction of
one side through areas under the
jurisdiction of the other side,
will be subject to the
following technical rules:
a. The transportation
will be by vehicles which will be sealed
with a seal of the official veterinary services of the
place
of origin and marked with a
visible sign "Animal
Transportation" or
"Products of Animal Origin" in Arabic
and
Hebrew, in coloured and clearly
visible letters on white
background.;
b. Each consignment will be
accompanied by a veterinary
certificate
issued by the official veterinary services of
the
place of origin, certifying that the
animals or their products
were examined
and are free of infectious diseases and
originate from a place which is not under quarantine or
under
animal movement
restrictions.
8. Transportation of livestock and poultry,
animal products and
biological products destined for
Israel from the Areas and vice
versa will be subject to
veterinary permits issued by the
official veterinary
services of the recipient side, in keeping
with the OIE
standards used in international traffic in this
field.
Each such consignment will be transported by a suitable
and marked vehicle, accompanied by a veterinary certificate
in
the form agreed upon between the official veterinary
services of
both sides. Such certificates will be issued
only if permits of
the recipient side are
presented.
9. In order to prevent the introduction of plant
pests and diseases
to the region, the following procedures
will be adopted :
a. The transportation between
the Areas and Israel, of plants and
parts thereof (including fruits and vegetables), the
control
of pesticide residues in them
and the transportation of plant
propagation material and of animal feed, may be
inspected
without delay or damage by the
plant protection services of
the
recipient side.
b. The transportation between
the Areas through Israel of plants
and
parts thereof (including fruits and vegetables) as well
as
of pesticides, may be required to
pass a phytosanitary
inspection without
delay or damage.
c. The official Palestinian
plant protection services have the
authority to issue permits for the import of plants and
parts
thereof as well as of pesticides
from external markets. The
permits will
be based on the prevailing standards and
requirements.
The permits will
specify the required conditions to be
included in the official Phytosanitary Certificates
(hence
P.C.) based upon the standards
and the requirements of the
International Plant Protection Convention (I.P.P.C.)and
those
of the European and Mediterranean
Plant Protection
Organization (E.P.P.O.)
which should accompany each
consignment.
The P.C.'s will be issued
by the plant protection services in
the
countries of origin. Dubious or controversial cases
will
be brought before the sub-committee
on plant protection.
10. The agricultural produce of both sides
will have free and
unrestricted access to each others'
markets, with the temporary
exception of sales from one
side to the other side of the
following items only:
poultry, eggs, potatoes, cucumbers,
tomatoes and melons.
The temporary restrictions on these items
will be
gradually removed on an increasing scale until they are
finally eliminated by 1998, as listed
below:
Year Poultry
Eggs Potatoes Cucumbers
Tomatoes
Melons
--------------------------------------------------------------------
(In tons) (In (In tons) (In tons) (In
tons) (In
tons)
millions)
1994
5,000 30
10,000 10,000
13,000
10,000
1995
6,000 40
13,000 13,000
16,000
13,000
1996
7,000 50
15,000 15,000
19,000
15,000
1997
8,000 60
17,000 17,000
22,000 17,000
1998 unlimited
unlimited unlimited unlimited unlimited
unlimited
---------------------------------------------------------------------
Note:
The above figures refer to the combined quantities
marketed
from the West Bank and Gaza
Strip to Israel and vice-versa.
The
Palestinian Authority will notify Israel the
apportioning
of these quantities between
these areas concerning the
quantities
pertaining to the Palestinian produce.
11. The Palestinians will
have the right to export their agricultural
produce to
external markets without restrictions, on the basis of
certificates of origin issued by the Palestinian Authority.
12.
Without prejudice to obligations arising out of existing
international agreements, the two sides will refrain from
importing agricultural products from third parties which
may
adversely affect the interests of each other's
farmers.
13. Each side will take the necessary measures in the area
under its
jurisdiction to prevent damage which may be
caused by its
agriculture to the environment of the other
side.
14. The two sides will establish sub-committees of their
respective
official veterinary and plant protection
services, which will
update the information and review
issues, policies and procedures
in these fields. Any
changes in the provisions of this Article
will be agreed
upon by both sides.
15. The two sides will establish a
sub-committee of experts in the
dairy sector in order to
exchange information, discuss and
coordinate their
production in this sector so as to protect the
interests
of both sides. In principle, each side will produce
according to its domestic
consumption.
Article
IX
INDUSTRY
1. There will be free movement of
industrial goods free of any
restrictions including
customs and import taxes between the two
sides, subject to
each side's legislation.
2. a. The Palestinian side has the
right to employ various methods
in
encouraging and promoting the development of
the
Palestinian industry by way of
providing grants, loans,
research and
development assistance and direct-tax
benefits.
The Palestinian side has also
the right to employ other
methods of
encouraging industry resorted to in Israel.
b.
Both sides will exchange information about the
methods
employed by them in the
encouragement of their respective
industries.
c. Indirect tax rebates or benefits
and other subsidies to sales
shall not
be allowed in trade between the two sides.
3. Each side will
do its best to avoid damage to the industry of the
other
side and will take into consideration the concerns of the
other side in its industrial policy.
4. Both sides will
cooperate in the prevention of deceptive
practices, trade
in goods which may endanger health, safety and
the
environment and in goods of expired validity.
5. Each side
will take the necessary measures in the area under its
jurisdiction to prevent damage which may be caused by its
industry to the environment of the other side.
6. The
Palestinians will have the right to export their
industrial
produce to external markets without
restrictions, on the basis of
certificates of origin
issued by the Palestinian Authority.
7. The JEC will meet and
review issues pertaining to this
Article.
Article
X
TOURISM
1. The Palestinian Authority will establish
a Palestinian Tourism
Authority which will exercise, inter
alia, the following powers
in the
Areas.
a. Regulating, licensing, classifying and
supervising tourist
services, sites and
industries.
b. Promoting foreign and domestic
tourism and developing the
Palestinian
tourist resources and sites.
c. Supervising the
marketing, promotion and information
activities related to foreign and domestic tourism .
2. Each
side shall, under its respective jurisdiction, protect,
guard and ensure the maintenance and good upkeep of
historical,
archaeological, cultural and religious sites
and all other
tourist sites, to fit their status as well
as their purpose as a
destination for
visitors.
3. Each side will determine reasonable visiting
hours and days for
all tourist sites in order to
facilitate visits at a wide variety
of days and hours,
taking into consideration religious and
national holidays.
Each side shall publicize such opening times.
Meaningful
changes in the opening times will take into
consideration
tourist programs already committed to.
4. Tourist buses or
any other form of tourist transport authorized
by either
side, and operated by companies registered and licensed
by
it, will be allowed to enter and proceed on their tour
within
the area under the jurisdiction of the other side,
provided that
such buses or other vehicles conform with
the EEC technical
specifications [I. currently adopted.]
All such vehicles will be
clearly marked as tourist
vehicles.
5. Each side will protect the environment and the
ecology around the
tourist sites under its jurisdiction.
In view of the importance
of beaches and maritime
activities for tourism, each side will do
its best efforts
to ensure that development and construction on
the
Mediterranean coast, and especially at ports (such as
Ashqelon or Gaza), will be planned and carried out in a
manner
that will not adversely affect the ecology,
environment or the
functions of the coastline and beaches
of the other side.
6. Tourism companies and agencies licensed
by either side shall
enjoy equal access to tourism -
related facilities and amenities
in border points of exit
and entry according to the regulations
of the authority
operating them.
7. a. Each side will license, according to
its own rules and
regulations, travel
agents, tour companies, tour guides and
other tourism businesses (hereinafter - tourism
entities)
within its
jurisdiction.
b. Tourism entities authorized by
either side, will be allowed to
conduct
tours that include the area under the jurisdiction
of
the other side, provided that their
authorization as well as
their operation
will be in accordance with rules,
professional
requirements and standards
agreed upon by both sides in the
sub-committee mentioned in para
9.
Pending that agreement,
existing tourism entities in the Areas
which are currently allowed to conduct tours that
include
Israel, will be allowed to
continue to do so, and Israeli
authorized tourism entities will continue to be allowed
to
conduct tours that include the
Areas.
In addition, any
tourism entity of one side that the
tourism
authorities of the other side
will certify as fulfilling all
its
rules, professional requirements and standards, will
be
allowed to conduct tours that include
that other side.
8. Each side will make its own arrangement
for compensation of
tourists for bodily injury and
property damages caused by
political violence in the areas
under its respective
jurisdiction.
9.
The JEC or a tourism sub-committee established by it shall
meet
upon the request of either side in order to discuss
the
implementation of the provisions of this Article and
resolve
problems that may arise. The sub-committee will
also discuss and
consider tourist issues of benefit to
both sides, and will
promote educational programs for
tourism entities of both sides
in order to further their
professional standards and their
ethics. Complaints of one
side against the behaviour of tourism
entities of the
other side will be channelled through the
committee.
Note: It is agreed that the final wording in the
last sentence in
para 4 will be adopted
according to the final wording in the
relevant provisions of the
Agreement.
Article
XI
INSURANCE ISSUES
1. The authorities, powers and
responsibilities in the insurance
sphere in the Areas,
including inter alia the licensing of
insurers, insurance
agents and the supervision of their
activities, will be
transferred to the Palestinian Authority.
2. a. The
Palestinian Authority will maintain a compulsory
absolute
liability system for road
accident victims with a ceiling on
the
amount of compensation based upon the
following
principles:
(1) Absolute
liability for death or bodily injury to
road
accident
victims, it being immaterial whether or not
there
was fault
on the part of the driver and whether or
not
there was
fault or contributory fault on the part
of
others, each
driver being responsible for
persons
travelling in his vehicle and for pedestrians hit by
his
vehicle.
(2) Compulsory
insurance for all motor vehicles,
covering
death
or bodily injury to all road accident
victims,
including drivers.
(3) No
cause of action in tort for death or bodily
injury
resulting
from road accidents.
(4) The
maintenance of a statutory fund (hereinafter -
the
Fund) for
compensation of road accident victims who
are
unable to
claim compensation from an insurer for
the
following
reasons:
(i) the
driver liable for compensation is
unknown;
(ii)
the driver is not insured or his insurance does
not
cover the
liability involved;
or
(iii) the
insurer is unable to meet his liabilities.
b.
Terms in this Article will have the same meaning as in
the
legislation prevailing at the date
of signing of the Agreement
concerning
compulsory motor vehicle insurance and
compensation
of road accident
victims.
c. Any change by either side in the
rules and regulations
regarding the
implementation of the above mentioned
principles
will require prior notice to
the other side. A change which
might
substantially affect the other side will require
prior
notice of at least three
months.
3. a. Upon the signing of the Agreement the
Palestinian Authority
will establish a
Fund for the Areas (hereinafter - the
Palestinian Fund) for the purposes detailed in para
2(a)(4)
above and for the purposes
detailed below. The Palestinian
Fund
will assume the responsibilities of the statutory
Road
Accident Victims Compensation Fund
in the West Bank and the
Gaza Strip
(hereinafter - the Existing Fund) regarding
the
Areas, according to the prevailing
law at that time.
Accordingly, the
Existing Fund will cease to be
responsible
for any liability regarding
accidents occurring in the Areas
from
the date of signing of the Agreement.
b. The
Existing Fund will transfer to the Palestinian Fund,
after
the assumption of the above
mentioned responsibilities by it,
the
premiums paid to the Existing Fund by the insurers
for
vehicles registered in the Areas,
pro-rata to the unexpired
period of each
insurance policy.
4. a. Compulsory motor vehicle
insurance policies issued by
insurers
licensed by either side will be valid in
the
territories of both sides.
Accordingly, a vehicle registered
in one
side covered by such a policy will not be required
to
have an additional insurance coverage
for travel in the areas
under the other
side's jurisdiction. These insurance
policies
will cover all the liabilities
according to the legislation of
the
place of the accident.
b. In order to cover part
of the liabilities which may incur due
to road accidents in Israel by uninsured vehicles
registered
in the Palestinian Authority,
the Palestinian Fund will
transfer to
the Israeli Fund, on a monthly basis, for
each
insured vehicle, an amount equal to
30% of the amount paid to
the Israeli
Fund by an insurer registered in Israel, for
the
sat-ne type of vehicle, for the same
period of insurance
(which will not be
less than 90 days).
5. In cases where a victim of a road
accident wishes to claim
compensation from an insurer
registered by the other side or from
the Fund of the other
side or in cases where a driver or an owner
of a car is
sued by a victim, by an insurer or by the Fund of the
other side, he may nominate the Fund of his side as his proxy
for
this purpose. The Fund so nominated may address any
relevant
party from the other side directly or through the
other sides'
Fund.
6. In the case of a
road accident in which neither the registration
number of
the vehicle nor the identity of the driver are known,
the
Fund of the side which has jurisdiction over the place of
the
accident will compensate the victim, according to its
own
legislation.
7. The Fund of each
side will be responsible towards the victims of
the other
side for any liability of the insurers of its side
regarding the compulsory insurance and will guarantee
their
liabilities.
8. Each side will
guarantee its Fund's liabilities according to this
Article.
9. The two sides will negotiate within three months
from the date of
the signing of the Agreement a cut-off
agreement between the
Existing Fund and the Palestinian
Fund concerning accidents which
occurred in the Areas
prior to the date of the signing of the
Agreement, whether
claims have been reported or not. The cut-off
agreement
will not include compensation for Israeli victims
involved
in accidents which occurred in the Areas prior to the
date
of the signing of the Agreement.
10. a. The two sides will
establish immediately upon the signing
of
the Agreement, a sub-committee of
experts (hereinafter - the
Sub-Committee) which will deal with issues regarding
the
implementation of this Article,
including:
(1) Procedures
concerning the handling of claims of victims
of
the one side
from insurers or from the Fund of the
other
side;
(2) Procedures
concerning the transfer of the amounts
between
the
Funds of both sides as mentioned in para 4(b)
above-,
(3) The details of the
cut-off agreement between the
Existing
Fund
and the Palestinian Fund, as set out in para 9
above;
(4) Any other relevant
issue raised by either side.
b. The
Sub-Committee will act as a continuous committee
for
issues regarding this
Article.
c. The two sides will exchange, through
the Sub-Committee, the
relevant
information regarding the implementation of
this
Article, including police reports,
medical information,
relevant
statistics, premiums, etc.. The two sides
will
provide each other with any other
assistance required in this
regard.
11. Each side may require the re-examination of the
arrangements set
out in this Article a year after the date
of the signing of the
Agreement.
12. Insurers
from both sides may apply for a license to the relevant
authorities of the other side, according to the rules and
regulations regarding foreign insurers in the latter side.
The
two sides agree not to discriminate against such
applicants.
Done in Paris, this twenty ninth
day of April, 1994
For the Government of
Israel
For the PLO
Finance Minister Avraham
Shohat
Abu Ala (Ahmed Korei)
.