[3] While the Protocol initially applied to the Gaza Strip and the Jericho Area, its jurisdiction was extended to all of the Palestinian territories in the Oslo II Accord.
The limited time the agreement was supposed to be operative helped encourage Palestinian negotiators to sign it, to be the first step to make progress.
The Protocol regulates the relationship and interaction between Israel and the Palestinian Authority in six major areas: customs, taxes, labor, agriculture, industry and tourism.
[4][2] The Protocol determines that Israeli currency, the New Israeli Shekel (NIS), is used in the Palestinian territories as a circulating currency which legally serves there as means of payment for all purposes and to be accepted by the Palestinian Authority and by all its institutions, local authorities and banks.
Pursuant to the Protocol, Israel withholds 25% of these income taxes by default (not from Palestinians employed in settlements).
This makes the PA vulnerable to unilateral suspension of clearance revenue transfers by Israel.
[8] As early as 1997, Israel began to unilaterally settle bills unpaid by Palestinians, not the PA itself, including fines and interests.