Abstract

Under the monetary arrangements adopted in Paris in 1994, Palestinian banks operate within a system in which the currency used for many transactions, the supervision of Palestinian institutions and access to shekel settlement are controlled through different institutions. Over three decades, privately maintained correspondent accounts have supplied the connection between Palestinian banks and Israeli payment infrastructure, leaving cross-border transactions exposed to changes in the commercial relationships on which that connection depends. Studies of Palestinian economic integration, monetary sovereignty and financial-crime regulation have explained the origins and risks of this dependence; research undertaken in Palestine in 2026 has also examined means of preserving existing services and developing other settlement channels. Those proposals nonetheless involve different legal authorities, whose respective obligations cannot be inferred from the technical feasibility of a payment arrangement. In this context, this article examines the commitments undertaken in Article IV of the Paris Protocol when correspondent relationships are threatened with termination. For this purpose, it interprets the Protocol alongside the history of its implementation, the regulation of correspondent banking, governmental decisions concerning an Israeli public company and the Palestinian institutional response documented through 21 October 2026. Its contribution lies in determining the legal requirements governing continued private correspondence, public guarantees and access through a successor institution, while distinguishing the agreement between the parties from the powers conferred by Israeli and Palestinian domestic law. Article IV supports scrutiny of public measures affecting the correspondent relationships that the parties agreed to permit; the sources examined do not establish a further bilateral commitment to finance or activate a named substitute.

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