The bill imposes sanctions on foreign individuals and entities tied to the Palestine Liberation Organization and Palestinian Authority system of compensation that pays terrorists and their families. It also targets foreign financial institutions that process or facilitate payments connected to that system and seeks to block property and deny entry for those designated.
The measure builds on the Taylor Force Act framework and directs the President to implement these sanctions within a defined timeframe.
If enacted, the act would broaden the sanctions toolbox to penalize the networks that sustain the compensation system, with enforcement mechanisms under the International Emergency Economic Powers Act. The goal is to deter payments that incentivize acts of terrorism and to compel policy adjustments by those actors.
The act also provides definitions to guide enforcement and sets a termination trigger tied to a State Department certification that the compensation system has ceased.
At a Glance
What It Does
Not later than 90 days after enactment, the President must sanction foreign persons involved in the PLO/PA compensation system or who provide payments to terrorists or their families. It also sanctions entities that facilitate the system.
Who It Affects
Foreign individuals tied to the PLO/PA compensation network and affiliated entities, plus foreign financial institutions that process related payments or engage in significant transactions.
Why It Matters
Establishes enforceable consequences for financing terrorism through the PLO/PA payroll, reinforcing the Taylor Force Act framework and signaling a clear counterterrorism policy stance to international partners and financial institutions.
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What This Bill Actually Does
The bill defines a “system of compensation” used by the Palestinian Authority and the Palestine Liberation Organization to pay terrorists and their families, and it treats that system as a target for sanctions. It directs the President to impose a set of penalties on foreign persons who have served in or facilitated the system, or who have provided payments and benefits to terrorists as part of that system.
The sanctions include blocking property and restricting visas, with additional measures aimed at foreign financial institutions that process related payments or engage in significant transactions with sanctioned individuals or entities. The statute relies on authorities under the International Emergency Economic Powers Act and calls for implementing regulations within two months of enactment.
The act also codifies definitions for terms like “foreign person,” “material support,” and “system of compensation,” making clear who is subject to sanction and under what circumstances. It requires the Secretary of State to certify whether the PLO/PA system has ceased to incentivize or support terrorism as a condition for termination of the statute’s effects.
The overall purpose is to deter and disrupt funding streams that finance terrorist activity while still allowing for the normal operations of U.S. government agencies to enforce these measures. The policy approach reflects a continuity with the Taylor Force Act’s demands and expands the reach of sanctions to financial institutions that facilitate or enable payments related to the system.
By tying penalties to concrete acts—such as discriminatory payroll practices and direct support to terrorists—the bill seeks to close loopholes that could otherwise sustain violence while keeping enforcement aligned with U.S. counterterrorism goals.
The Five Things You Need to Know
The bill imposes sanctions on foreign persons who served in or facilitated the PLO/PA compensation system.
It authorizes blocking of property and visa ineligibility for designated individuals.
It expands sanctions to foreign financial institutions that process or enable related payments.
Regulations implementing the sanctions must be issued within 60 days of enactment.
Termination of the act requires State Department certification that the compensation system has ceased.
Section-by-Section Breakdown
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Short title
This act may be cited as the PLO and PA Terror Payments Accountability Act of 2025.
Findings and Policy
The bill lays out findings about the PLO/PA compensation system, its links to terrorist financing, and the U.S. policy to hold the PLO and PA accountable through sanctions for continuing the system.
Definitions
Defines terms used throughout the act, including ‘act of terrorism,’ ‘foreign person,’ ‘system of compensation,’ ‘material support,’ and ‘United States person,’ to establish the scope and limits of sanctions.
Sanctions on foreign persons tied to terrorist compensation
Not later than 90 days after enactment, and on an ongoing basis, the President must sanction foreign persons who served in or facilitated the PLO/PA system or provided payments to terrorists or their families. Sanctions include property blocking and visa/immigration restrictions.
Sanctions related to financial institutions
Not later than 90 days after enactment, the President shall sanction foreign financial institutions that process, facilitate, or otherwise support payments tied to the system, or that engage in significant transactions with sanctioned persons or entities, prohibiting or conditioning U.S. accounts and correspondent relationships.
Termination
The act can be terminated only if the Secretary of State certifies in writing that the PLO/PA system of compensation has ceased to exist and is no longer incentivizing or supporting terrorism.
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Who Benefits
- U.S. national security agencies (enhanced enforcement of counterterrorism financing) and the Treasury/OFAC in administering sanctions
- U.S. policymakers and allied partners seeking to undermine terrorist financing networks
- Victims and families in the United States affected by terrorism, who benefit from reduced funding to terrorists
- Israel and other regional partners seeking to deter militant financing by non-state actors
Who Bears the Cost
- PLO/PA officials and related entities who receive or manage compensation payments
- Palestinian workers and families dependent on the compensation system
- Foreign financial institutions that must establish compliance controls and potentially terminate relationships
- U.S. financial institutions and businesses facing heightened sanctions compliance burdens
Key Issues
The Core Tension
Balancing aggressive counterterrorism financing measures with the risk of harming civilians and destabilizing humanitarian efforts or peace-process dynamics.
The bill foregrounds a hard-line counterterrorism approach by criminalizing and restricting support to the PLO/PA compensation system. It relies on broad definitions and comprehensive sanctions to close loopholes but raises questions about humanitarian consequences and the potential chilling effects on legitimate Palestinian civil society and aid flows.
Implementation hinges on timely regulatory guidance and robust coordination with international partners, as well as careful monitoring to avoid overreach or unintended disruption of essential services to civilians.
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