Some 25 Israeli companies carried out direct deals with the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) between 2020 and 2023, bringing in around $60 million in revenue. Some of them continued to sell goods and services to the organization even after the start of the war in Gaza in the last quarter of 2023.
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These data were revealed by Yisrael Beiteinu lawmaker Yulia Malinovsky on Sunday and were taken from UNRWA's reports detailing contracts with Israeli suppliers between 2020 and 2023 (excluding the second quarter of 2023, for which no data were provided by UNRWA). These reports indicate that many Israeli companies and businesses directly benefited from the now-controversial organization’s activities.
UNRWA is a UN agency established to provide relief services to Palestinian refugees in the Gaza Strip, the West Bank including East Jerusalem, Jordan, Syria and Lebanon. According to Israel, UNRWA employees participated in Hamas’ October 7 attack, and the organization's facilities and vehicles were reportedly used during the massacre.
Israel claims that UNRWA and Hamas have a structural connection. According to reports, 12 UNRWA workers have been accused of allegedly being involved in the massacre. According to UN Secretary-General António Guterres, nine UNRWA employees have been dismissed, one of them has died, and the identity of two other individuals involved is still being investigated.
Last week, the Israeli security establishment decided to act in order to weaken UNRWA and bring a halt to its activities.
This approach was adopted after a long debate by political and security officials who believed that although UNRWA is a problematic organization that perpetuates the issue of Palestinian refugees and collaborates with terrorist organizations like Hamas, Israel currently has no real alternative regarding the management and distribution of humanitarian aid to Gazans, at a time when such aid is critical - according to Israel's official statement.
It was agreed that a multi-dimensional humanitarian crisis is currently unfolding in Gaza, with some reports claiming that part of the Strip’s population has reached a state of extreme hunger, including growing concerns of the spread of diseases and epidemics.
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Bank Leumi froze UNRWA's bank account over concerns that the funds were used by terror groups
(Photo: Haim Hornstein)
Ultimately, the decision to lower the organization's activities came after the IDF concluded that “drying out” the organization would damage Hamas' civilian infrastructure in Gaza. The decision was also influenced by evidence reflecting the involvement of organization employees in the October 7 massacre and its close ties with Hamas' military wing.
Spending millions in Israel
Within the IDF and the government, considerations include reliance on local proxies in Gaza to replace the UN body, but this policy may be problematic as well. Last week, it was reported that Hamas had executed a local Palestinian clan head in Gaza suspected of collaborating with Israel.
One of the main methods to curtail UNRWA's activities is done through economic warfare. Security forces are working to deprive the organization of its ability to operate independently while attempting to dry up its funding sources. This week, the government instructed Israeli banks to close accounts belonging to the organization and, last month, Bank Leumi announced it froze UNRWA's bank account over concerns that the funds were used by terror groups.
In addition to Israeli banks, UNRWA has extensive economic ties with many businesses in the Israeli economy, as a significant portion of its activities ultimately take place inside the country. For example, UNRWA's central office dealing with Palestinian affairs in the West Bank is located in Jerusalem’s Sheikh Jarrah neighborhood, and the organization paid $2.1 million to the Jerusalem Municipality in property taxes between 2020 and 2023.
According to the reports, direct transactions totaling about $60 million were conducted between UNRWA and Israeli companies between 2020 and 2023, but this is estimated to be a total of relatively minor transactions. It is believed that many Israeli companies provide services and sell products to UNRWA indirectly via intermediaries, including contractors and Gazan businessmen, some of whom are affiliated with Hamas.
The main and well-known Israeli companies that worked with UNRWA directly between 2020-2023 include Paz Oil Company, car importers Champion Motors, Auto Chen and Carasso Motors, as well as telecommunications companies Tadiran Telecom (part of the Shlomo group holdings) and NetVision 013 (owned by Cellcom).
The total amount of transactions UNRWA conducted in the last quarter of 2023 stood at $85 million, with the main suppliers being companies from the Palestinian Authority and Gaza, the United Arab Emirates, Egypt, Syria, Lebanon, Jordan, Turkey, as well as countries such as Austria, Sweden, Denmark and Israel.
Some of the companies doing business with UNRWA claimed some of the contracts listed in the reports weren’t completed, and payment for those contracts wasn’t made, partly because Israeli banks and other businesses are no longer willing to work with UNRWA, creating an issue where businesses that worked with the organization before its connection to Hamas was known are now in debt.
The manager of one of the companies told Calcalist that his neighbors in the industrial zone in which he’s located know that he provides services to the organization, and since then a boycott has significantly affected his businesses: "We can't pay salaries. I have 50 employees who have barely been working for two months.”
“UNRWA owes me 5 million shekels, and the banks aren’t willing to accept money from them. I won a tender, operated according to the law, and now I’m being boycotted. I'm worried and afraid that people will come and burn down our business," he added.
Other companies noted that, since October 7, they’ve stopped doing business with UNRWA, even though their contracts with the UN body appear in the report for 2023’s final quarter.
In a conversation with Calcalist, Knesset member Yulia Malinovsky said: "Israel and Israeli companies worked with UNRWA for many years. But now, after the horrors committed by UNRWA employees, such as the murder of hostages, Israel must declare UNRWA as a terrorist organization."
Malinovsky estimates that a significant sum of over $60 million ultimately arrives in Israel from UNRWA via a third party. For example, a Gazan contractor affiliated with Hamas who won a UNRWA tender to construct a school costing millions of dollars buys goods such as cement in Israel. "Ongoing trade and work relations with UNRWA constitute an insult to the memory of the victims," Malinovsky noted.
Recently, Malinovsky submitted a bill to declare UNRWA a terrorist organization. The legislation would prevent the organization from operating in Israeli territories and prohibit Israeli bodies and companies from working with UNRWA.
The bill faced opposition from the Knesset's Legislation Committee. The bill also wasn’t exempt from the 45-day hold requirement in the Knesset before being brought to a preliminary vote. Therefore, Malinovsky would only be able to bring it to a vote in two months, with the start of the Knesset's summer session in May.
"In my view, the bill’s approval is a debt owed to all the victims, the injured, the missing and their families," Malinovsky said. "We can’t move on and continue trading with UNRWA." Malinovsky is outraged about the fact Israel's National Security Council (NSC), headed by Tzachi Hanegbi, opposes voting on the bill.
"The NSC is subject to Prime Minister Benjamin Netanyahu, and it’s up to him to act to curb UNRWA's activities in Israel and prevent economic ties between the organization and Israeli companies," she said. Additionally, she was angered to learn that the discussion of the UNRWA issue in the Foreign Affairs and Defense Committee was declared a classified discussion.
According to Malinovsky, the reason for the government's opposition to the bill is a reluctance to worsen its relations with the UN and international bodies. "But after we lost 800 civilians and soldiers in one day, and after we have captives in Hamas’ hands, some of whom are UNRWA personnel, I don't care about the UN," she added.
She further noted that "at the beginning of the war, many foreign countries stood by Israel, and some even severed ties and support with UNRWA, but now countries like Canada, Switzerland, Sweden and France are returning to work and allocate funds to the UN body. If we were to declare UNRWA a terrorist organization, many countries might follow our decision."
The Paz Oil Company commented, saying contacts with UNRWA in Gaza were terminated on October 7. Champion Motors, Auto Chen, Carasso Motors, Tadiran Telecom and NetVision 013 all refused to comment.