2013/8/20 Number (101) Palestinian Documents

Law Decree No. (7) of 2013

Concerning the Palestinian Deposit Insurance Corporation

President of the State of Palestine
President of the Executive Committee of the Palestine Liberation Organization

Having reviewed the amended Basic Law of 2003, particularly Article (43) thereof, Having reviewed Law No. (2) of 1997 concerning the Palestinian Monetary Authority, Having reviewed Law Decree No. (9) of 2010 concerning Banks, Based on the proposal of the Council of Ministers dated 20/11/2012, Based on the powers delegated to us, In pursuit of the public interest, In the name of the Palestinian Arab People,

We have issued the following Law Decree:

Chapter One

Definitions and General Provisions

Article (1)

Definitions

The following words and expressions shall have the meanings specified below wherever they appear in this Law, unless the context indicates otherwise:

• Palestine: The State of Palestine.
• Monetary Authority: The Palestinian Monetary Authority.
• Governor: The Governor of the Monetary Authority.
• Deputy Governor: The Deputy Governor of the Monetary Authority.
• The Corporation: The Palestinian Deposit Insurance Corporation.
• The Board: The Board of Directors of the Corporation.
• Chairman of the Board: The Chairman of the Board of Directors of the Corporation.
• General Manager: The General Manager of the Corporation.
• Deposit: As defined in the prevailing Banks Law.
• Compensation: The amount paid by the Corporation to depositors upon the liquidation of a member, within the ceiling determined by the Board.

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• Bank: As defined in the prevailing Banks Law.
• Islamic Bank: As defined in the prevailing Banks Law.
• Member: A member of the deposit insurance system, including the Bank and the Islamic Bank licensed by the Monetary Authority to accept deposits within Palestine.
• Person Related to the Corporation: A natural or legal person who has any of the following relationships with the Corporation:
  a. Being a member of the Board or an executive official in the Corporation. b. Being a consultant to the Corporation.
  c. A relative up to the second degree of the persons mentioned in items (a, b).
• Executive Officials: The General Manager, his deputies, assistants, directors of departments or sections, their deputies and assistants, and those in similar positions.
• The Fund: The fund for members' contributions.

Article (2)

Scope of Application

The provisions of this Law Decree shall apply to all members within Palestine.

Chapter Two

Establishment of the Corporation, Its Objectives, and Powers

Article (3)

Establishment

1. A corporation named "The Palestinian Deposit Insurance Corporation" is established by the provisions of this Law Decree. Its main headquarters shall be in the city of Jerusalem, and it may establish a headquarters in another location within Palestine. It may also open branches as decided by the Board.
2. The Corporation shall enjoy legal personality, legal capacity, and financial and administrative independence.

Article (4)

Objectives

1. The Corporation aims, in accordance with the provisions of this Law, to achieve the following:
   Protect the rights of depositors of funds with members according to the designations specified in Article (21) of this Law Decree.
2. Enhance the confidence of users of the banking system and contribute to maintaining its stability, and raise the level of public awareness of the deposit insurance system.

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Article (5)

Powers of the Corporation

1. The Corporation shall enjoy all powers necessary to achieve its objectives, including:
   a. Organizing and managing the deposit insurance system in accordance with the provisions of this Law Decree. b. Issuing the necessary instructions to members to ensure compliance with their obligations under this Law.
   c. Concluding contracts and acquiring movable and immovable property.
   d. Paying guarantee amounts to depositors in accordance with the procedures set out in this Law after the Monetary Authority publishes the member's liquidation decision in the Official Gazette. e. Borrowing to compensate depositors in case its financial resources are insufficient. f. Taking all necessary procedures to liquidate the member in accordance with the provisions of this Law. g. Obtaining from the Monetary Authority the necessary data to perform its duties. h. Exchanging information and data with relevant authorities within and outside Palestine in accordance with mechanisms that ensure the confidentiality of information.
   i. Reporting to the Monetary Authority members who violate the provisions of this Law.
   j. Taking all necessary legal procedures to pursue the officials responsible for the bankruptcy of the member decided to be liquidated.
2. The Corporation shall not grant loans and facilities, whether in their traditional or Islamic form, in accordance with this Law, except for loans granted to its employees in accordance with a system approved by the Board.

Chapter Three

Board of Directors

Article (6)

Board of Directors

1. The management and supervision of the Corporation shall be undertaken by a Board of Directors consisting of seven members, as follows:
   a. The Governor as Chairman, and the Deputy Governor shall act in his absence. b. A representative from the Ministry of Finance of high rank and specialization, appointed by the Minister of Finance.
   c. The Company Inspector in the Ministry of National Economy.
   d. Four independent members appointed by a decision of the President of the State of Palestine, serving a term of three years renewable only once.
2. The following conditions must be met by independent members:
   a. They must be persons of good reputation, integrity, competence, and extensive experience in financial, economic, and legal fields.

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b. They must not hold any government position, paid or unpaid.
c. They must not hold any positions with any member or with the Banks Association in Palestine.
d. They must have the ability to contribute to achieving the Corporation's objectives and performing its duties. e. None of them must have declared bankruptcy or be unable to pay their debts. f. None of them must have been convicted by a competent court of a final judgment for crimes involving breach of honor, trust, or public morals, unless their reputation has been restored.
3. In the event that any independent member submits their resignation or loses their membership in the Board, the vacant position shall be filled in the same manner specified in paragraph (d/1) of this Article, and the new Board member shall serve the remaining term of the resigning or removed member.
4. Board members shall not own any shares in any member.
5. Board members shall not work for any member or for the Banks Association in Palestine for at least one year after the date of the end of their membership on the Board.
6. The Chairman of the Board may request the Minister of Finance to replace a Board member if they miss three consecutive sessions without acceptable excuse.
7. Subject to the provisions of paragraphs (a, b, c) of this Article, a member of the Board of Directors of the Corporation shall lose their membership in the Board in the following cases:
a. If they assume any government position. b. If they become ineligible for Board membership in accordance with the provisions of this Law.
c. If convicted of a misdemeanor involving breach of honor or trust, or a felony by a final judgment issued by a competent court.
d. If they declare bankruptcy or are unable to pay their debts. e. If they become unable to perform their duties and responsibilities due to a report from a specialized and accredited medical committee. f. If they abuse their powers and cause serious damage to the Corporation according to reports formed by them. g. If they miss three consecutive sessions without acceptable excuse.

Article (7)

Duties and Powers of the Board

1. The Board shall undertake the following duties and powers:
   a. Formulating policies and strategies necessary to achieve the Corporation's objectives. b. Approving the organizational structure and job descriptions, and appointing and terminating executive officials.
   c. Determining their fees and privileges.
   d. Approving internal systems, instructions, guides, and procedures for the operation of the Board and the Corporation. e. Approving the Corporation's annual estimated budget and the mechanisms for its implementation. f. Approving plans and policies for investing the Corporation's funds in accordance with this Law. g. Approving and estimating the annual contribution rates for members. h. Determining and approving compensation ceilings for depositors in accordance with instructions issued for this purpose.
   i. Approving the imposition of fines on violating members in accordance with Article (29) of this Law.
   j. Approving borrowing in accordance with what is stipulated in this Law. k. Approving the appointment of external consultants.
   l. Appointing an external auditor to evaluate the Corporation's financial statements and determining their fees.
   m. Approving the annual reports and final statements of the Corporation. n. Approving the disclosure and transparency policy for publishing data and reports regarding the Corporation, its duties, and achievements. o. Approving procedures and processes for compensating depositors and monitoring their proper implementation in accordance with this Law. p. Approving the guide for liquidating members and monitoring its proper implementation in accordance with this Law. q. Submitting an annual report on the Corporation's achievements to the President of the State of Palestine.
2. The Board may, based on need and the interest of work, delegate some of its powers in writing to an internal committee formed from among its members.
3. The Board shall form from among its members at least an Internal Audit Committee, a Governance Committee, a Risk Management Committee, and a Committee for the Efficient Management of Assets and Liabilities to perform the duties and responsibilities incumbent upon it, specifying their duties, powers, and reporting lines.
4. The Board may rely on experts, consultants, and the Corporation's staff when forming committees, and may form other committees as necessary to assist it in some of its responsibilities, while its responsibility remains for the actions and decisions of all committees it forms.

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Article (8)

Board Meetings

1. The Board shall meet upon invitation from its Chairman or one-third of its members, at least once every two months or whenever necessary. Its meeting shall be valid with the presence of two-thirds of the members, including the Chairman of the Board or the Deputy Governor in case of his absence. The Board's decisions shall be issued by a majority of the attending members, and in case of a tie, the side voted for by the Chairman of the meeting shall prevail.
2. The Board may invite those it deems necessary to participate in the session from outside the Corporation with expertise and specialization to participate in the meeting and listen to their opinion without having the right to vote, and the Board shall determine their compensation if necessary.
3. Board meetings shall be confidential, and the Chairman of the Board exclusively or whoever he delegates in writing may disclose decisions aimed at enhancing the protection of depositors' funds and increasing confidence in the banking system.

Article (9)

Remuneration of Board Members

An annual remuneration shall be paid to Board members determined by a decision issued by the President of the State of Palestine upon the proposal of the Chairman of the Board. Remuneration shall not be paid as a percentage of the Corporation's profits.

Chapter Four

General Manager of the Corporation

Article (10)

Appointment and Termination of the General Manager

1. The General Manager shall be appointed by a decision of the Board for a term of four years, renewable only once, in accordance with the contract conditions. The appointment shall be in accordance with mechanisms that observe equity, competence, extensive experience, integrity, and the ability to manage the Corporation's affairs and supervise it according to merit standards approved by the Board.
2. The appointment decision shall determine the General Manager's financial rights, privileges, and other contract conditions.
3. The General Manager's service shall be terminated by a decision of the Board in the following cases:
   a. If convicted of a misdemeanor involving breach of honor or trust, or a felony by a final judgment issued by a competent court. b. If suffering from physical or mental disability that makes them unable to perform their duties and responsibilities, based on a report from a specialized and accredited medical committee.
   c. If they abuse their powers or cause serious damage to the Corporation according to reports formed by them.
   d. If they declare bankruptcy or are unable to pay their debts. e. If they violate the conditions of the appointment contract.

Article (11)

Duties and Powers of the General Manager

1. The General Manager shall undertake the following duties and powers:
   a. Implementing the policies, strategies, and plans proposed by the Board. b. Implementing the instructions, decisions, and directives of the Board to ensure the achievement of the Corporation's objectives.
   c. Supervising the executive body and monitoring the proper implementation of daily work.
2. The Board may invite the General Manager of the Corporation to attend Board meetings without having the right to vote, and they shall be accountable to the Board for the implementation of their duties in accordance with the provisions of this Law.

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Chapter Five

Deposit Insurance System

Article (12)

Establishment of the Deposit Insurance System

A system named "Deposit Insurance System" is established by the provisions of this Law, with the aim of securing depositors' deposits with members within Palestine up to a specified limit and in accordance with compensation procedures approved by the Board in accordance with this Law.

Article (13)

Members in the Deposit Insurance System

1. All members operating in Palestine must join the membership of the deposit insurance system. Membership begins from the date the member obtains the final license from the Monetary Authority or immediately after the issuance of this Law for members licensed before the establishment of the Corporation.
2. The Corporation shall periodically publish the names of members in the deposit insurance system whenever necessary. Each member is obliged to inform the public of their membership by following disclosure and advertising mechanisms as approved by the Board.
3. Membership in the deposit insurance system ends after the Monetary Authority publishes the member's liquidation decision in the Official Gazette or approves the merger of the member. The Corporation shall compensate depositors with the member up to the ceiling.

Chapter Six

Ownership Rights of the Deposit Insurance System, Its Funding Sources, and Management of Funds

Article (14)

Ownership Rights of the Deposit Insurance System

1. The ownership rights of the deposit insurance system consist of the following:
   The government's contribution of an amount of (20,000,000) twenty million US dollars or its equivalent, to be paid within thirty days from the date of entry into force of this Law.
2. A non-refundable establishment fee of (100,000) one hundred thousand US dollars or its equivalent, paid by the member within a maximum period of fifteen days from the date they become a member of the deposit insurance system.
3. Reserves established by the Corporation in accordance with the provisions of Article (20) of this Law Decree.

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### Article (15)
**Sources of Financing for the Deposit Insurance System**

The sources of financing for the deposit insurance system consist of the following:

1. Annual membership fees paid by members to the Corporation quarterly in accordance with instructions issued for this purpose.
2. Returns on the investment of the deposit insurance system's funds.
3. Loans obtained by the Corporation in accordance with the provisions of Article (5) of this Law Decree.
4. Financial grants provided to the Corporation from any entity approved by the Board.

### Article (16)
**Annual Membership Fees**

1. Each member of the deposit insurance system must pay membership fees quarterly in accordance with instructions issued by the Board for this purpose.
2. The membership fee rate shall be between (0.3% - 0.8%) three per thousand to eight per thousand maximum of the total deposits covered by insurance in accordance with this Law.
3. The Board may determine a membership fee rate consistent with the risk level of each member according to criteria agreed upon with the Monetary Authority, in accordance with instructions issued for this purpose.
4. The Board may review and amend the annual membership fee rates and determine the calculation mechanism in accordance with instructions issued for this purpose.

### Article (17)
**Establishment and Management of Funds for Members' Contributions**

1. The Corporation shall establish a special fund for banks, and its balances shall consist of the following:
   a. Annual contributions of banks.
   b. Returns realized from investing the fund's funds.
   c. Net rights recovered after the liquidation of the bank and the fulfillment of all obligations in accordance with the provisions of Article (39) of this Law.
   d. Any other balances or grants approved by the Board.
2. The Corporation shall establish a special fund for Islamic banks, and its balances shall consist of the following:
   a. Annual contributions of Islamic banks.
   b. Profits from the investment of the fund's funds in accordance with Islamic Sharia.
   c. Net rights recovered after the liquidation of the Islamic bank and the fulfillment of all obligations in accordance with the provisions of Article (39) of this Law Decree.
   d. Any other balances or grants after approval by the Board, provided they comply with the provisions of Islamic Sharia.
3. The debit balances of these two funds shall mainly consist of compensation, investments, and amounts paid in liquidation operations, taking into account the nature of the operations recorded in each of them.

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### Article (18)
**Investment of the Deposit Insurance System's Funds**

1. The Corporation shall invest the funds of the two funds mentioned in Article (17) of this Law in accordance with the investment policy approved by the Board.
2. The balances of the fund for banks shall be invested in bonds and certificates issued by official government entities or entities authorized by them, which have a high credit rating, or in any other investments provided that their risk level is acceptable as approved by the Board.
3. The balances of the fund for Islamic banks shall be invested in Sukuk and Islamic financial instruments issued by official government entities or entities authorized by them, and in other Islamic financing forms, provided that their risk level is acceptable as approved by the Board.

### Article (19)
**Internal and External Audit**

1. The position of internal audit shall be established in the Corporation within its organizational structure. The Board shall determine its powers, duties, and reporting line.
2. The Board shall annually appoint an external auditor to audit the Corporation's financial statements in accordance with standards approved by it.

### Article (20)
**Reserves of the Deposit Insurance System**

1. The Corporation shall establish reserves used to achieve the Corporation's objectives, not less than three (%3) percent of the total deposits subject to the provisions of this Law.
2. The Board may determine the maximum period to reach the percentage mentioned in paragraph (1) of this Article, and may also amend this percentage according to its estimates and depending on the degree of risk that deposits with members may be exposed to.

Chapter Seven
Compensation of Depositors

### Article (21)
**Determination of Compensation Ceiling**

1. The Board shall determine the compensation ceiling amount, deadlines, and payment mechanisms in accordance with instructions issued for this purpose.
2. The Corporation is obliged to compensate depositors with members up to the determined ceiling, after the liquidation decision issued by the Monetary Authority is published in the Official Gazette.

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3. The compensation ceiling shall be calculated for each depositor based on consolidating all their insured deposits with the member, including interest or returns due to them up to the date of publication of the liquidation decision of this member in the Official Gazette.

### Article (22)
**Subrogation of the Corporation to Depositors**

The Corporation shall be subrogated to the depositors to the extent of the amount paid from their deposits, and this shall be documented as a debt owed to it by the member that was liquidated.

### Article (23)
**Deposits Covered by Insurance**

Subject to what is stated in Article (24) of this Law, deposits subject to insurance within Palestine include all types of deposits with members in all currencies in accordance with instructions issued for this purpose.

### Article (24)
**Deposits Not Covered by Insurance**

1. The following deposits are excluded from deposits covered by insurance in accordance with the provisions of this Law:
   a. Deposits of the government and its institutions.
   b. Deposits of the Monetary Authority.
   c. Inter-member deposits and deposits with other financial institutions.
   d. Cash guarantees up to the balance of existing facilities secured by them.
   e. Deposits of related parties to the member in accordance with the provisions of the prevailing Banks Law.
   f. Deposits of the member's account payments and/or members of its Sharia Supervisory Board.
   g. Investment deposits restricted as determined by the Board.
2. The Board shall determine, by instructions issued by it, the government entities and their institutions mentioned in paragraph (1/c) and other financial institutions mentioned in paragraph (1/c) of this Article.

Chapter Eight
Collection and Exchange of Information

### Article (25)
**Cooperation and Exchange of Information**

1. The Corporation must do the following:
   a. Conclude agreements with the Monetary Authority in order to exchange information and data periodically in accordance with specific mechanisms that ensure the Corporation obtains all necessary information to achieve its objectives.

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   b. Coordinate with the Monetary Authority regarding the procedures for liquidating the member.
2. The Corporation may do the following:
   a. Conclude agreements with its counterparts outside Palestine for the purpose of exchanging information and coordinating procedures to serve common interests.
   b. Join the membership of international institutions in the field of deposit insurance.
   c. Request the Monetary Authority to register and collect any amounts due to it from members by deducting them from their accounts with them and transferring them to the Corporation's accounts in accordance with a specific mechanism between the Monetary Authority and the Corporation for this purpose.
3. The Monetary Authority must, according to its estimates, release the Corporation regarding data and information related to the status of any member if their risk level becomes high.

### Article (26)
**Collection of Data and Information**

All members must provide the Corporation with any information or data related to deposits and depositors in accordance with instructions issued for this purpose.

### Article (27)
**Preparation and Publication of Financial Data and Information**

1. The Corporation must maintain regular records and accounts in accordance with the standards determined by the Board.
2. The Corporation's financial year begins according to the Gregorian calendar on the first day of January and ends on the thirty-first day of December of each year. The Corporation is obliged to publish its financial data and annual summary within three months of the end of the financial year after approval by the Board.
3. The Corporation must publish sufficient information about the deposit insurance system in accordance with the mechanisms determined by the Board for this purpose.
4. The first financial year of the Corporation begins from the date of entry into force of this Law Decree and ends at the end of the same year, unless the Board decides to add this period to the next financial year.
5. The Chairman of the Board shall submit the annual report to the President of the State of Palestine within a period not exceeding three months from the end of the financial year.

### Article (28)
**Confidentiality of Information**

All members of the Board, internal committees, Corporation employees, and persons related to the Corporation must maintain confidentiality regarding information, their work, and the data they access, under the threat of legal responsibility. Disclosure is not permitted except in accordance with the provisions of the Law.

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### Article (29)
**Fines**

1. Anyone who violates the provisions of Articles (14, 16, 26) shall be punished with a fine of (500) five hundred US dollars or its equivalent for each day of delay.
2. Subject to what is stated in paragraph (1) of this Article, anyone who violates the provisions of this Law shall be punished with a fine not less than (10,000) ten thousand US dollars and not more than (100,000) one hundred thousand US dollars or its equivalent.

Chapter Nine
Liquidation

### Article (30)
**Liquidation of the Member**

1. Subject to what is stated in the Banks Law, the Corporation shall be the sole liquidator for any member under liquidation.
2. The Corporation shall follow up on the liquidation procedures of any member for which the Monetary Authority has issued a liquidation decision before the issuance of this Law, without any financial obligations arising for it.

### Article (31)
**Objectives of Liquidation**

The Corporation, when undertaking the liquidation process of any member, must consider the following:
1. Compensating each depositor for their deposits subject to this Law.
2. Liquidating the member in a manner that ensures the best results for all its creditors and the Corporation. The Corporation must carry out all operations related to the member in coordination with the Monetary Authority.

### Article (32)
**Notification to Depositors**

1. Subject to what is stated in Article (30) paragraph (2), the Corporation must notify depositors to submit their claims for payment, based on the member's records, up to the compensation ceiling.
2. The Corporation must pay the compensation amount to depositors within a maximum period of one month from the date of submission of their claims. The Corporation may, after coordination with the Monetary Authority and in certain cases, extend this period.
3. Depositors who have not submitted their claims shall be contacted at their addresses approved with the member under liquidation to visit the Corporation to follow up on the payment of their deposits up to the compensation ceiling.

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4. Compensation amounts that have not been claimed by their owners shall be deposited as trusts in a special account with the Monetary Authority after the expiration of the period determined by the Board.

### Article (33)
**Liquidation Committee**

1. The Corporation shall form a Liquidation Committee to supervise all legal, financial, and accounting procedures in accordance with rules and controls determined by the Board.
2. The Liquidation Committee shall consist of five members as follows:
   a. The General Manager as Chairman.
   b. A representative from the Company Inspector in the Ministry of National Economy.
   c. A representative from the Supervision and Inspection Department in the Monetary Authority.
   d. Consultants from outside the Corporation chosen by the Board based on their expertise and competence in the fields of accounting, auditing, and law.
3. The Board shall determine the remuneration of committee members and the procedures for their payment in accordance with instructions issued for this purpose.

### Article (34)
**Duties of the Committee**

1. The Committee shall study its tasks in accordance with the liquidation guide prepared by the Corporation for liquidation purposes, and the Committee shall study all available options to achieve its goals, including estimating asset prices in consultation with the Board to select the most appropriate price.
2. The Committee prepares monthly reports sent to the Board and the Monetary Authority to inform them of the results of the liquidation operations and any problems that may hinder its work.
3. The Committee follows up on the procedures for selling the assets of the member under liquidation, whether these assets are movable or immovable, or any part thereof, or carrying out any other act or measure required by the liquidation.

### Article (35)
**Results of publishing the liquidation decision**

Subject to the provisions of paragraphs (7) and (8) of this Article, the Monetary Authority's publication of the liquidation decision in the Official Gazette entails the following:
1. The management of the member institution under liquidation, its General Manager, and its General Assembly and various committees are relieved of managing its assets or disposing of them from the date of publication of the liquidation decision, and all powers transfer to the Corporation.
2. The operation of any authorization or authority of the member under liquidation or any of its employees, or pursuant to any agency issued by it to others, is suspended, and the Corporation replaces the member in exercising these powers.
3. The calculation of any interest or returns on deposits and balances with the member and on debts owed by it is suspended, unless these debts are secured by a pledge or guarantee.

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4. The calculation of the statute of limitations for hearing any lawsuit regarding any rights or claims due or existing in favor of the member is suspended for one year starting from the date of publication of the liquidation decision.
5. The progress of appeals submitted against liquidation procedures is suspended, and the Corporation's decisions in this regard are enforceable, and the appellant's right to resort to the court to claim compensation is limited to compensation as stipulated in this Law.
6. The Corporation directly carries out liquidation procedures without obtaining prior approval from the shareholders and creditors of the member.
7. Except for what the Corporation may instruct in writing, the General Manager of the Corporation or anyone in his stead may not, during the liquidation period, whether directly or indirectly, engage in any activity related to the member under liquidation.
8. The Corporation takes all decisions and measures necessary in accordance with the provisions of this Law to complete liquidation activities, including:
   a. Managing the affairs of the member under liquidation within the limits required by liquidation procedures, and for this purpose, the Corporation may decide to allow the member to continue carrying out some of its activities.
   b. Except as provided in any other law, the Corporation must recover any funds that were disposed of in bad faith by the management of the member under liquidation in favor of related parties or that previously affected its financial status within a period not exceeding one year from the date of publication of the liquidation decision.
   c. Canceling any contracts or obligations that resulted in knowledge of what is owed by the member within a period not exceeding one year from the date of publication of the liquidation decision.
   d. Any other acts specified by the Board by instructions after coordination with the Monetary Authority.

### Article (36)
**Invalidity of Mortgages and Guarantees**

1. All mortgages and guarantees executed on assets or rights belonging to the member during the year preceding the date of publication of the liquidation decision in the Official Gazette are void, unless the Monetary Authority agrees otherwise, and this period is sixty days if the mortgages or guarantees are in favor of a subsidiary, sister company, or a related party to the member, and the aggrieved party has the right to resort to the judiciary.
2. Any seizure decision issued on any property or right belonging to the member before the publication of the liquidation decision in the Official Gazette is considered null and void, unless this decision was issued upon the request of a creditor twice and relates to the same mortgaged property.

### Article (37)
**Recovery of Debts**

1. Subject to the provisions of paragraph (3) of Article (34), the Corporation has the right to issue a notice to demand payment from the insolvent debtors of the member, and these notices constitute an executive document in accordance with the enforceable Execution Law, and it may submit a request to the court to impose executive attachment on the assets of the insolvent debtors of the member or to take

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# Palestinian Facts

## Number (101)  
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any precautionary or urgent measures against them, with the Corporation waiving the requirement to attach a guarantee with this request, and the Corporation may settle with the insolvent debtor or execute the notice against them in accordance with the provisions of the Law.

2. The instructions issued by the Board for this purpose shall be observed in the debt recovery process.

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## Article (38)

### Contents of Iron Boxes and Trusts

The following are not considered part of the assets subject to liquidation:

1. The contents of iron boxes rented to others with the member under liquidation, where they are returned to their owners provided that they pay what is due to them towards the member for fees resulting from their use of those boxes.

2. Cheques or documents deposited with the member under liquidation as a trustee, custodian, or safekeeper, or similar cases, where they are returned to their owners provided that they pay all obligations incumbent upon them towards the member.

3. Guarantees provided by the client as security for a contract, tenders, or facilities.

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## Chapter Ten

### Priority of Distribution of Rights

## Article (39)

### Priority of Distribution

1. Except as provided in any other legislation, the rights and obligations due to the member under liquidation are settled in the following order:

   a. Legal rights of employees at the member under liquidation.

   b. Rights of the Corporation arising from the payment of deposits covered by this Law, as well as all expenses and costs incurred by the Corporation directly in carrying out liquidation procedures.

   c. Rights of depositors covered by insurance to the extent that exceeds the compensation limit, and rights of depositors not covered by insurance under the provisions of Article (24) of this Law.

   d. Preferential creditors.

   e. Ordinary creditors.

   f. Shareholders' rights.

2. The provisions regarding Islamic banks concerning the priority of distribution shall be observed, which are determined by the Board by instructions issued for this purpose.

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## Chapter Eleven

### General Provisions

## Article (40)

### Protection of the Corporation's Assets and Staff

Subject to the provisions of enforceable laws, the following shall not be done:

1. Seizure of the assets and property of the Deposit Insurance System and the Corporation.

2. Interference with the staff of the Corporation while they are carrying out their assigned duties, and the staff of the Corporation enjoy the necessary legal protection in the framework of carrying out their tasks.

3. The Corporation may take measures it deems appropriate to protect employees from any procedures that may interfere with them in the framework of practicing their duties.

## Article (41)

### Issuance of Instructions

The Board issues the necessary instructions to implement the provisions of this Decision-Law.

## Article (42)

### Cancellation of Conflict

Any legal text contained in any other legislation in force in Palestine is repealed to the extent that its provisions conflict with the provisions of this Decision-Law.

## Article (43)

### Submission to the Legislative Council

This Decision-Law is submitted to the Legislative Council at its first session for approval.

## Article (44)

### Entry into Force and Implementation

All competent authorities shall, each within its competence, implement the provisions of this Decision-Law, and it shall come into force thirty days after its publication in the Official Gazette.

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**Issued in the city of Ramallah on: 29/05/2013 AD** **Corresponding to: 19 / Rajab / 1434 AH**

**Mahmoud Abbas**  
President of the State of Palestine  
President of the Executive Committee of the Palestine Liberation Organization

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Reference No: 101-8-2013  
Diwan Al-Fatwa and Legislation  
85