U.S. court freezes Palestinian-government assets

WASHINGTON (Reuters) – A federal court in Rhode Island has
ordered a freeze of all U.S.-based assets of the Palestinian
Authority after the Palestinian government failed to pay $116
million in damages imposed by the court last year, according to
legal documents obtained on Tuesday.

After a five-year legal battle, the court last year ordered
the Palestinian Authority to pay the damages for the 1996
shooting deaths of American Yaron Ungar and his Israeli wife
Efrat near an Israeli town.

When the Palestinian government did not pay, the lawyer for
Ungar’s estate, David Strachman, petitioned the court to block
the assets, Strachman told Reuters.

Court papers show the U.S. District Court in Rhode Island
granted a temporary freeze on the assets of the Palestinian
Authority, the Palestine Liberation Organization and related
officials and entities in April, and then blocked the funds
indefinitely in May.

The defendants may still withdraw normal expenses from
designated accounts to pay for the daily operation of their
offices in New York and Washington.

The Boston Globe, which reported on the freeze on Tuesday,
said the frozen assets include U.S. holdings in a $1.3 billion
Palestinian investment fund and bank accounts used to pay
Palestinian representatives in Washington, but this could not
be confirmed.

Strachman said he had also initiated a court action to
seize and sell Palestinian-owned real estate in New York that
serves as the Palestinian observer mission to the United
Nations.

Neither officials at the Palestinian mission in New York
nor the two lawyers representing the Palestinian Authority in
the case were immediately available for comment.

In Washington, State Department spokesman Sean McCormack
declined to comment on any details involving the lawsuit, which
he said the U.S. government was not a party to.

Asked whether the State Department was doing anything to
try and “unfreeze” the funds, McCormack said he did not believe
any assets had been seized yet.

“We are aware of the court case, very clearly. We have
heard from the Palestinian Authority at a variety of different
levels at the State Department on this matter. They’ve raised
it with us,” he said.

“At this point, we have not filed any briefs as part of
this court case,” McCormack said.

Strachman said the funds were already frozen and
inaccessible to the Palestinian Authority.

(additional reporting by Sue Pleming)