Rhode Island District Court freezes Palestinian Authority assets in the US

August 31, 2005

A Rhode Island district court has frozen all the US assets of the Palestinian Authority (PA), prompting Palestinian finance minister Salam Fayyad to request the aid of US Secretary of State Condoleezza Rice.

The frozen assets include US holdings in an investment fund worth $1.3 billion, which was used to finance economic development, and $30 million from the Palestinian Monetary Authority.

The ruling was passed upon the PA when they refused to compensate the relatives of a Jewish couple shot dead by members of Hamas in 1996.

US citizen Yaron Ungar and his wife Efrat were killed while returning from a wedding near the West Bank, when their car was shot at repeatedly, killing the couple. Three Hamas militants were jailed as a result.

A lawsuit was filed in 2000 against the Palestinian Authority, the PLO, Hamas, and Yasser Arafat in Rhode Island.

Yasser Arafat hired lawyer and former attorney general Ramsey Clark as his defense. In the case, Clark argued that the PA was a sovereign state, and that it deserved immunity from prosecution accorded to most countries. The court disagreed with this, and in 2004 they ruled that Palestine is not a state, and ordered them to pay the Ungars $116 million. A federal appeals court upheld the verdict in March.

The head of Washington's PA office, Hasan Abdul Rahman said that his office had been "paralysed" by the verdict.

"It paralyzes the function of the office, and I think that is the intention of the plaintiffs." he told Associated Press shortly after the decision, and called upon the US administration to intervene.