Whereas:
A.   In accordance with a decision by the Board of Governors from October 2004, the merger has been completed of the Gal Law Unit, the Contracts and Securities Division and the Idud company, and also the process has been completed for updating the data base of the various debts dealt with by Idud.

B.  The loans provided by the Jewish Agency to settlements and to settlers in the rural sector were given on a long-term basis (up to 37 years), so that the collection process is likely to continue for many more years.
C.  The long time period required to collect these loans may jeopardize the prospects for their collection and even create the need for intermediate funding and for the maintenance of a collection mechanism over a long period.

D.  The new (merged) Idud has been asked to prepare an attractive offer for the early repayment of these debts in order to increase Jewish Agency income in the next few years.
Therefore be it resolved:

1.  The Jewish Agency will implement a project for the early collection of debts owed to it by settlements and settlers; payment of these debts will be made either immediately or over a period of up to three years.  The project will be carried out and managed by the new Idud.

2.  The terms of the project will be as follows:

- A settlement and/or a settler in arrears to the Jewish Agency will be entitled to a 70% reduction on the interest charges arising from these arrears on condition that they join the debt-repayment scheme during the first year of the project.
- The project for early debt repayment will offer two possible repayment tracks:
a.  Where a settlement or settler wishes to repay the debt within 60 days, the amount to be paid will be calculated as the capitalization of the remaining payments using an annual rate of discount of 10% (an average discount for all debtors of 42%).

b.  Where a settlement or settler wishes to repay over a period of up to 3 years, the amount to be paid will be calculated as the capitalization of the remaining payments using an annual rate of discount of 9%.  The new debt, after the discount, will be index-linked and carry a rate of interest of 4% (an average discount for all debtors of 35%).

3.  Idud will send each settlement and/or settler a letter detailing the debt to the Jewish Agency, the rate of discount and the debt that will remain after the discount, depending on whether immediate payment has been chosen or payment over a period of up to 3 years.  This letter will
be accompanied by a detailed contract to be signed with the Jewish Agency as a condition for joining the debt-repayment scheme.  It will be made clear to the settlers that this agreement does not diminish the proprietary rights of the Jewish Agency with respect to land.

4. A settlement and/or a settler must decide on accepting the offer within 60 days of receipt of the above letter.

5. At the end of the three years of the project, all the discounts described in clause 2 of this decision will be cancelled and the Jewish Agency will be able to continue to collect the remaining debts that were not repaid according to the procedures that apply at present.

6.  The proposal relates only to the repayable debts (25%) and not to the standing loans which will
continue to be managed according to the settlement contracts.