Congress tightens screws on Palestinian governance with broad sanctions authority
S. 198 — PLO and PA Terror Payments Accountability Act of 2025 · Filed by Tom Cotton (R-AR) · 11 cosponsors · Introduced Jan 22, 2025 · Referred to committee
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What it does
This bill directs the President to impose financial and travel sanctions on foreign persons and entities involved in the Palestinian Authority and PLO's compensation system for terrorists and their families, and on foreign banks that facilitate such payments. The sanctions include asset freezes, visa revocations, and restrictions on bank accounts in the U.S. The bill terminates only if the State Department certifies that the PA/PLO have ended their compensation system.
Why we flagged it
The bill's operative mechanism is a sanctions regime targeting foreign persons and financial institutions connected to PA/PLO compensation payments. It is framed as counterterrorism policy but functions as a broad financial restriction on Palestinian governance structures.
What the text implies
- The bill's definition of 'system of compensation' references the Taylor Force Act but does not clearly delineate which PA/PLO payments fall within scope—potentially capturing salaries for teachers, healthcare workers, and security personnel, not only payments to convicted terrorists or their families.
- Foreign financial institutions face strict conditions on U.S. correspondent accounts if they process any transaction the President determines facilitates the 'system of compensation'—this may cause banks to sever ties with Palestinian entities entirely, disrupting legitimate commerce and humanitarian transfers.
The full analysis lists 5 implications of this text.
Who it affects
The bill restricts U.S. financial flows to entities the bill characterizes as supporting terrorism, which aligns with stated U.S.