A new banking system has been adopted by the Palestine Monetary Authority which will enhance the environment of transparency on financial transactions to prevent any illegal business ties, money laundering, corruption and terrorism financing.
The banking accounts system called Know Your Customer was launched last month, and is widely used in international banking for its critical function in assessing and monitoring customer risks.
The goal, officials said, is to make sure all local bank transactions and economy are honest and based on legitimacy.
In a press release, the authority cited its governor, Azzam Shawwa, saying the closer scrutiny will help bridge a gap in financial and demographic data of customers and other financial institutions and help banks make sound decisions, as well as streamline the opening of new accounts and update customer data in real-time.
This comes after the government adopted a national strategy last year as a practical step to combat illegal transactions to prepare for an assessment by the Middle East and North Africa Financial Action Task Force, which represents 14 Arab governments, including the PA, seeking to counter money laundering and terrorism financing.
However, Al-Monitor reported that the head of the Economic Affairs Committee of the Palestinian Legislative Council in the Gaza Strip, Atef Adwan, expressed concern for charities based in Gaza Strip as the new programme could delay or impede the arrival of funds due money arriving from various donors around the world through local banks.
He said: "The PA's new system seeks to prevent the resistance factions such as Hamas and the Islamic Jihad in the Gaza Strip from obtaining money transfers from abroad."
I, however, believe that these factions have unconventional tools for bringing in money from abroad.
"The PA's restrictions on money transfers from abroad are mainly to tighten its siege on the Gaza Strip and subsequently weaken Hamas' rule. That's its strategic goal."
In addition, economics professor at Al-Azhar University in Gaza City Mouin Rajab believes that the new steps seek to counter the informal economy in the Palestinian territories that is based on all forms of smuggling.
Last year, US Congress approved a new law that enables Americans who have been hurt in Palestinian resistance attacks to prosecute the Palestinian Authority (PA).
This, Haaretz reported, "gives the American courts jurisdiction to seize assets from any entity that receives foreign assistance from the US."
It also said that the "legislation exposes the PA to potential lawsuits over past 'terrorism' and could even lead it to bankruptcy."
Greater banking checks could help the PA avoid future lawsuits but improving checks and ensuring a clear funding paths.