Jerusalem Wins Court Battle, UNRWA Bank Account Frozen for Tax Debt
Translated & summarized from Makor Rishon by baba
A Jerusalem court ordered Bank Leumi to transfer over 11 million shekels from a UNRWA account to the Jerusalem Municipality to cover unpaid property taxes. Judge Haya Zandberg ruled that UNRWA lost its immunity after a 1967 agreement expired and that the agency failed to legally contest the tax assessments. The decision follows Knesset legislation to end UNRWA's operations in Israel and comes amid concerns about the agency's alleged links to terrorism. The ruling means UNRWA must pay taxes like any other entity in Israel.
The story in 6 lines · by baba
- Jerusalem Municipality will receive over 11 million shekels from a frozen UNRWA bank account.
- A Jerusalem court rejected UNRWA's claims of immunity regarding property tax debts.
- UNRWA's tax immunity expired on October 7, 2024, following the lapse of a 1967 agreement.
- The court ruled that UNRWA failed to legally contest its property tax assessments.
- Knesset legislation to cease UNRWA's operations in Israel preceded the tax collection efforts.
- The ruling emphasizes that Israeli law applies to all entities, including UNRWA.
A Jerusalem District Court has ordered Bank Leumi to transfer approximately 11.05 million shekels to the Jerusalem Municipality from a frozen UNRWA bank account, ruling against the UN agency's claims of immunity. Judge Haya Zandberg rejected UNRWA's arguments, stating that the agency failed to legally challenge its property tax (arnona) assessments, which consequently became final.
UNRWA previously held two properties in Jerusalem, a commercial complex and a school. While it had enjoyed tax exemptions due to diplomatic immunity, the situation changed following Knesset legislation to cease UNRWA's operations in Israel. The Jerusalem Municipality began levying property taxes for 2024-2025, which UNRWA did not contest through the proper legal channels.
The legal drama escalated in February 2024 when Bank Leumi blocked UNRWA's account over concerns of funds being used for terrorism. The court determined that UNRWA's immunity, stemming from a 1967 agreement, expired on October 7, 2024, after the agreement lapsed according to law. The court also dismissed the notion of automatic immunity as a subsidiary organ of the UN, emphasizing that Israeli law, particularly explicit Knesset legislation, supersedes international obligations.
In August 2025, a seizure order was placed on the account for the debt of over 11 million shekels. Bank Leumi sought judicial guidance, and Judge Zandberg ultimately ordered the bank to execute the seizure and transfer the funds to the municipality. The court found that the fear of terror financing did not prevent the municipality from collecting its dues and that UNRWA's prohibition of activity did not exempt it from paying for municipal services.
Shai Glick, CEO of the "B'Tselem" organization, hailed the ruling as a significant legal and moral victory, asserting that UNRWA's unjustified immunity has ended and that Israeli law applies to all entities operating within the country. Attorney Morin Simon, representing the Jerusalem Municipality, stated that the ruling upholds the principle of the rule of law, where entities benefiting from services in Israel cannot claim exemption from paying their debts.
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