The article discusses the crucial role of clearing funds, taxes imposed on imported goods to Palestinian territories, which Israel collects on behalf of the Palestinian Authority. These funds are a significant source of revenue for the Authority, averaging over $255 million monthly. As of 2025, Israel reportedly retains about $3 billion of these funds, thereby exacerbating the economic fragility of the Palestinian territories and deepening existing crises due to heavy reliance on these revenues.

Approximately 99% of the clearing funds come from purchase taxes and value-added tax on imported goods, along with customs fees on imports passing through Israeli-controlled crossings. The remaining portion originates from income tax collected from Palestinian workers within Israel's borders. This steady stream of funds constitutes around 65% of the Palestinian Authority's total revenues, making the uninterrupted flow of these funds vital for the Authority's capacity to pay salaries, cover operational expenses, and continue providing essential public services.

The framework surrounding these clearing funds is built on the Paris Economic Protocol, underpinning the economic relationship between Israel and the Palestinian territories. The retention of these funds by Israel poses risks to the Palestinian economy and governance, as the Authority faces challenges in meeting its financial obligations, which can lead to broader socio-economic instability within the territories. Thus, the management of clearing funds remains a significant point of contention and a critical factor in the ongoing economic discussions between the two entities.