|AGREEMENT ON PREPARATORY TRANSFER OF POWERS AND
August 29, 1994
The government of the State of Israel and the Palestine Liberation Organization
(hereinafter "the PLO"), the representative of the Palestinian people;
WITHIN the framework of the Middle East peace process initiated at Madrid in
REAFFIRMING their determination to live in peaceful coexistence, mutual dignity
and security, while recognizing their mutual legitimate and political rights;
REAFFIRMING their desire to achieve a just, lasting and comprehensive peace
settlement through the agreed political process;
REAFFIRMING their adherence to the mutual recognition and commitments expressed
in the letters dated September 9, 1993, signed by and exchanged between the Prime Minister
of Israel and the Chairman of the PLO;
REAFFIRMING their understanding that the interim self-government arrangements,
including the preparatory arrangements to apply in the West Bank contained in this
agreement, are an integral part of the whole peace process and that the negotiations on
the permanent status will lead to the implementation of Security Council Resolutions 242
FOLLOWING the Agreement on the Gaza Strip and the Jericho Area as signed at
Cairo on May 4, 1994 (hereinafter "the Gaza-Jericho Agreement");
DESIROUS of putting into effect the Declaration of Principles on Interim
Self-Government Arrangements as signed at Washington, D.C. on September 13, 1993
(hereinafter "the Declaration of Principles"), in particular Article VI
regarding preparatory transfer of powers and responsibilities and the Agreed Minutes
HEREBY AGREE to the following arrangements regarding the preparatory transfer of
powers and responsibilities in the West Bank;
For the purpose of this Agreement, unless other wise indicated in the attached
- the term "the Palestinian Authority" means the Palestinian Authority
established in accordance with the Gaza-Jericho Agreement;
- the term "joint Liaison Committee" means the interim agreement referred to in
Article VII of the Declaration of Principles;
- the term "Interim Agreement" means the interim agreement referred to in
Article VII of the Declaration of Principles; and
- the term "Israelis" also includes Israeli statutory agencies and corporations
registered in Israel.
PREPARATORY TRANSFER OF POWERS AND RESPONSIBILITIES
- Israel shall transfer and the Palestinian Authority shall assume powers and
responsibilities from the Israeli military government and its Civil Administration in the
West Bank in the following spheres: education and culture, health, social welfare,
tourism, direct taxation and Value Added Tax on local production (hereinafter
"VAT") as specified in this agreement (hereinafter "the Spheres")
- For the purposes of this Agreement, the Palestinian Authority shall constitute the
authorized Palestinians referred to in Article VI of the Declaration of Principles.
- The Parties will explore the possible expansion of the transfer of powers and
responsibilities to additional spheres.
SCOPE OF THE TRANSFERRED POWERS AND RESPONSIBILITIES
- The scope of the powers and responsibilities transferred in each Sphere, as well as
specific arrangements regarding the exercise of such powers and responsibilities, are
set out in the Protocols attached as Annexes I through VI.
- In accordance with the Declaration of Principles, the jurisdiction of the Palestinian
Authority with regard to the powers and responsibilities transferred by this agreement
will not apply to Jerusalem, settlements, military locations and, unless otherwise
provided in this Agreement, Israelis.
- The transfer of powers and responsibilities under this Agreement does not include powers
and responsibilities in the sphere of foreign relations, except as indicated in Article VI
(2)(b) of the Gaza-Jericho Agreement.
MODALITIES OF TRANSFER
- The transfer of powers and responsibilities in the sphere of education and culture
pursuant to this Agreement will be implemented on August 29, 1994. The transfer of
powers and responsibilities in the remaining Spheres will be implemented in accordance
with Article XI below.
- The transfer of powers and responsibilities shall be coordinated through the Civil
Affairs Coordination and Cooperation Committee referred to in Article X below and shall
be implemented in accordance with the arrangements set out in this Agreement in a smooth,
peaceful and orderly manner.
- Upon the signing of this Agreement, the Israeli side shall provide the Palestinian side
with, or enable free access to, all information that is necessary for an effective and
- On the date of the transfer of powers and responsibilities, Israel shall also transfer
all moveable and immovable property which exclusively serves the offices of the Civil
Administration in the Spheres, including premises, whether government-owned or rented,
equipment, registers, files and computer programs, The treatment t of property which
serves the offices transferred to the Palestinian Authority as well as offices which are
not so transferred will be mutually agreed between the two sides, such as on the basis of
sharing or exchange.
- The coordination of the transfer of powers and responsibilities pursuant to this Article
shall also include a joint review of the Civil Administration contracts the duration of
which extends beyond the date of the transfer with a view to deciding which contracts will
remain in force and which will be terminated.
ADMINISTRATION OF THE TRANSFERRED OFFICES
- The Palestinian Authority shall be fully responsible for the proper functioning of the
offices included in the Spheres and for the management of their personnel in all aspects,
including employment and placement of employees, payment of their salaries and pensions
and ensuring other employee rights.
- The Palestinian Authority will continue to employ Palestinian Civil Administration
employees currently employed in the offices included in each Sphere and shall maintain
- The main office of each of the Spheres will be situated in the Jericho Area or in the
Gaza Strip. The Palestinian Authority will operate the existing subordinate offices in the
West Bank. The two sides may agree on the establishment of additional subordinate offices
in the West Bank, if necessary, in such locations as mutually agreed.
- The Palestinian Authority has the right to coordinate its activities in each of the
Spheres with other Spheres in which it is empowered.
RELATIONS BETWEEN THE TWO SIDES
- With regard to each sphere, the Palestinian Authority shall coordinate with the Civil
Administration on issues related to other spheres in which the Palestinian Authority is
- The military government and its Civil Administration shall assist and support the
Palestinian Authority in promoting the effective exercise of its powers and
responsibilities transferred to it. Such legislation includes amendments and changes to
the existing laws, regulations and military orders specified in Appendix A to each Annex.
- The Palestinian Authority shall prevent any activities with a military orientation
within each of the Spheres and will do its utmost to maintain decorum and discipline and
to avoid disruption in the institutions under its responsibility.
- The Palestinian Authority will notify the military government and its Civil
Administration and will coordinate with them regularly regarding any planned public
large-scale events and mass gatherings within the Spheres.
- Nothing in this Agreement shall effect the continued authority of the military
government and its Civil Administration to exercise their powers and responsibilities with
regard to security and public order, as well as with regard to other spheres not
LEGISLATIVE POWERS OF THE PALESTINIAN AUTHORITY
- The Palestinian Authority may promulgate secondary legislation regarding the powers and
responsibilities transferred to it. Such legislation includes amendments and changes to
the existing laws, regulations and military orders specified in Appendix A to each Annex.
- Legislation promulgated by the Palestinian Authority shall be consistent with the
provisions of this Agreement.
- Legislation promulgated by the Palestinian Authority shall be communicated to Israel
which may, within a period of thirty (30) days, notify the Palestinian Authority that it
opposes such legislation for any of the following reasons:
- it exceeds the powers and responsibilities transferred to the Palestinian Authority
- it is inconsistent with the provisions of this Agreement; or
- it otherwise effects legislation or powers and responsibilities which were not
transferred to the Palestinian Authority.
- Where Israel opposes proposed legislation, it shall specify the reason for the
- If Israel has no reservations concerning the proposed legislation, it shall accordingly
notify the Palestinian Authority at the earliest opportunity. If at the end of the
thirty-day period Israel has not communicated any opposition to the proposed legislation,
such legislation shall enter into force.
- The Palestinian Authority may, in the event of opposition to the proposed draft
legislation, submit a new draft or request a review by the legislation Subcommittee
established under the Gaza-Jericho Agreement.
- The Legislation Subcommittee shall attempt to reach a decision on the merits of the
matter within thirty days. If the Legislation Subcommittee is unable to reach a decision
within this period, the Palestinian Authority shall be entitled to refer the matter to the
Joint Liaison Committee. The Joint Liaison Committee shall consider the matter immediately
and will attempt to settle it within thirty days.
- Where, upon communicating to Israel proposed legislation consisting of technical
regulations, the Palestinian Authority states that such regulations fulfill the
requirements of paragraph 3 above and requests a speedy review, Israel shall immediately
respond to such a request.
- Legislation regarding the West Bank shall be published as a separate part of any
publication of legislation regarding the Gaza Strip and the Jericho Area issued by the
- The Palestinian Authority may bring disciplinary proceedings concerning persons it
employs in the West Bank before disciplinary tribunals operating in the Gaza Strip or the
- The Palestinian Authority may, within each of the Spheres, authorize employees to act as
civilian inspectors to monitor compliance with laws and regulations in that Sphere, within
the powers and responsibilities transferred to the Palestinian Authority. Such inspectors
shall operate in each Sphere separately and shall not be organized into a central unit.
These inspectors shall not wear uniforms or carry arms, and shall not in any other way
have the nature of a police force. They shall be required to carry the identification
documentation referred to in paragraph 3 below. The number of employees to be authorized
as civilian inspectors shall be agreed upon by both sides. The names of these employees
enjoy privileges pursuant to subparagraph 3 below, shall be agreed upon by both sides.
- The Palestinian Authority shall issue the civilian inspectors in the West Bank with
identification documentation specifying the office in which they are employed. Such
documentation shall be used for identification and will not grant privileges, except those
agreed in the Civil Affairs Coordination and Cooperation Committee refereed to in Article
X below, or immunities. This committee shall determine the format of the identification
- Except as specifically provided in this Agreement, all powers and responsibilities
regarding law enforcement, including investigation, judicial proceedings and imprisonment,
will continue to be under the responsibility of the existing authorities in the West Bank.
RIGHTS, LIABILITIES AND OBLIGATIONS
- The transfer of powers and responsibilities to the Palestinian Authority under this
agreement will include all related rights, liabilities and obligations arising with regard
to acts or omissions arising with regard to acts or omissions which occurred prior to the
transfer, Israel and the Civil Administration will cease to bear any financial
responsibility regarding such acts or omissions and the Palestinian Authority will bear al
financial responsibility for these and for its own functioning.
- Any financial claim made in this regard against Israel or the Civil Administration will
be referred to the Palestinian Authority.
- Israel shall provide the Palestinian Authority with the information it has regarding
pending and anticipated claims brought before any court or tribunal against Israel or the
Civil Administration in this regard.
- Where legal proceedings are brought in respect of such a claim, Israel will notify the
Palestinian Authority and enable it to participate in defending the claim and raise any
arguments on its behalf.
- In the event that an award is made against Israel or the Civil Administration by any
court or tribunal in respect of such a claim, the Palestinian Authority shall, once the
award has been paid by Israel, reimburse Israel to the full amount of the reward.
- Without prejudice to the above, where a court or tribunal hearing such a claim finds
that liability rests solely with an employee or agent who acted beyond the scope of the
powers assigned to him or her, unlawfully or with willful malfeasance, the Palestinian
Authority shall not bear financial responsibility.
- Notwithstanding subparagraphs 1.d through 1.f above, Israel may, pursuant to agreement
within the Legal Subcommittee of the CAC established under the Gaza-Jericho Agreement,
request an Israeli court or tribunal to dismiss a claim brought before it and, with regard
to a pending claim, dismiss the claim and transfer the proceedings to a local court or
- Where a claim has been so transferred or where a new claim has been brought in a local
court or tribunal subsequent to the dismissal of the claim pursuant to subparagraph 1.g
above, the Palestinian Authority shall defend it and, in accordance with subparagraph 1.a
above, in the event that an award is made for the plaintiff, shall pay the amount of the
- The legal Subcommittee referred to in subparagraph 1.g above shall agree on arrangements
for the transfer of proceedings from Israeli courts or tribunals pursuant to subparagraph
1.g above and, where necessary, for the provision of legal assistance by Israel to the
Palestinian Authority in defending such claims.
- In accordance with paragraph 1 above:
- The Palestinian Authority may bring legal proceedings in respect of any acts or
omissions relating to powers and responsibilities transferred under this Agreement which
occurred prior to the date of the transfer. Israel shall provide the Palestinian Authority
with the legal assistance necessary to bring such proceedings.
- The Palestinian Authority may collect any taxes due under Annexes V and VI on the date
of the transfer of powers and responsibilities in respect of these taxes, and shall assume
responsibility for the payment of any rebates or refunds.
- Subject to the provisions of this Article, the transfer of powers and responsibilities
in itself shall not affect rights, liabilities and obligations of any person or legal
entity, in existence at the date of signing this Agreement.
LIAISON AND COORDINATION
- The Joint Affairs Coordination and Cooperation Committee established in accordance with
the Gaza-Jericho Agreement, (hereinafter "the CAC") will deal with all issues of
mutual concern regarding this agreement.
- The operation of the CAC shall not impede daily contacts between representatives of the
Civil Administration and the Palestinian Authority in all matters of mutual concern.
- The military government and its Civil Administration shall provide the Palestinian
Authority with full information concerning the budget of each Sphere.
- The Palestinian Authority shall immediately employ personnel who will promptly begin the
process of becoming acquainted with the current budget issues. On the date of the transfer
of powers and responsibilities in each of the Spheres, these personnel will assume
responsibility for all accounts, assets, and records on behalf of the Palestinian
- Israel shall continue to provide the services of Israeli experts currently employed in
the fields of income tax and VAT to ensure a smooth transition and efficient establishment
of the taxation system of the Palestinian Authority. Their terms of employment shall be
agreed upon by the two sides.
- The Palestinian Authority will do its utmost to establish its revenue collection system
immediately with the intent of collecting direct taxes and VAT.
- The two sides will jointly approach the donor countries during the upcoming meetings of
the Consultative Group and of the Ad Hoq Liaison Committee, scheduled for September 8
through 10, 1994 in Paris, with a request to finance the shortfall that may be created in
the collection of the direct taxes and the VAT during the initial period while the
Palestinian Authority establishes its own revenue system.
- The two sides will meet no later than three days after the conclusion of thee meetings
in order to decide on the date of transfer of powers and responsibilities in the remaining
Spheres, based, among other things, on the response of the donor countries to the joint
- The CAC will provide the donor countries, when necessary, with information to help
adjust the allocation of contributions as a result of variations in tax collection.
- The Palestinian Authority shall also assume full responsibility for any additional
expenditures beyond the agreed budget which is attached as Schedule 1, as well as for any
shortfall in tax collection that is not actually covered by the donor countries.
- If actual revenues from the Spheres, including the donor contributions, exceed the
budgeted revenues, the excess shall be applied to development of the Spheres.
- The inclusion of the sphere of VAT in the spheres to be transferred to the Palestinian
Authority shall constitute the adjustment referred to in paragraph (3) of the Agreed
Minute to Article VI (2) of the Declaration of Principles, and no further adjustment shall
MUTUAL CONTRIBUTION TO PEACE AND RECONCILIATION
With regard to each of the Spheres, Israel and the Palestinian Authority will ensure
that their respect8ive systems contribute to the peace between the Israeli and Palestinian
peoples and to peace in the entire region, and will refrain from the introduction of any
motifs that could adversely affect the process of reconciliation.
- This Agreement shall enter into force on the date of its signing.
- The arrangements established by this Agreement are preparatory measures and shall remain
in force until and to the extent superceded by the Interim Agreement or by any other
agreement between the Parties.
- Nothing in this Agreement shall prejudice or preempt the outcome of the negotiations on
the Interim Agreement or on the permanent status to be conducted pursuant to the
Declaration of Principles. Neither party shall be deemed, by virtue of having entered into
this Agreement, to have renounced or waived any of its existing rights, claims or
- The two Parties view the West Bank and the Gaza Strip as a single territorial unit, the
integrity of which shall be preserved during the interim period.
- The Gaza Strip and the Jericho Area shall continue to be an integral part of the West
Bank and the Gaza Strip. The status of the West Bank shall not be changed for the period
of this Agreement. Nothing in this Agreement shall be considered to change this status.
- The Preamble to this agreement and the Annexes, Appendices and Schedule attached hereto,
shall constitute an integral part hereof.
Done at Erez this twenty-ninth day of August 1994.
For the State of Israel
For the PLO
List of Annexes
Schedule 1- Six-Month Budget for the Spheres
Annex I- Protocol Concerning Preparatory Transfer of Powers and Responsibilities
in the Sphere of Education and Culture
Annex II- Protocol Concerning Preparatory Transfer of Powers and
Responsibilities in the Sphere of Health
Annex III- Protocol Concerning Preparatory Transfer of Powers and
Responsibilities in the Sphere of Social Welfare
Annex IV- Protocol Concerning Preparatory Transfer of Powers and
Responsibilities in the Sphere of Tourism
Annex V- Protocol Concerning Preparatory Transfer of Powers and Responsibilities
in the Sphere of Direct Taxation
Annex VI- Protocol Concerning Preparatory Transfer of Powers and
Responsibilities in the Sphere of VAT on Local Population