Israeli-Arab director Suha Arraf will have to return state funding for her film Villa Touma, as she presented it to international film festivals as Palestinian despite the funding agreement stipulating it must be considered Israeli, an Economy Ministry Committee determined Wednesday.
Economy Minister Naftali Bennett ordered that the committee be formed in August, calling it "unacceptable" for a film funded by Israeli taxpayers and made by Israeli artists to be presented as Palestinian.
"You can't take from the state and then spit in its face," he added.
Arraf will have to return NIS 600,000 that she received to the Economy Ministry, but will be allowed to do so in payments.
In August, the Israeli Film Fund, which is under the Culture and Sport Ministry's jurisdiction, demanded that Arraf return the NIS 1.258 million it invested in the film.
The Israel State Lottery (Mifal Hapayis), which gave Arraf a NIS 114,000 grant, also said she violated the conditions of the funding by calling her film Palestinian.