At dawn on December 24, the Knesset approved Amendment No. 2 of the World Zionist Organization- Jewish Agency (Status) Law-1952, concerning the formal status of the WZO’s Settlement Division and its relations with the Israeli government.The amendment was originally submitted in a private member’s bill by MK Bezalel Smotrich of Bayit Yehudi on July 6, 2015.However, the amendment as finally passed was substantially different to that submitted by Smotrich. Smotrich’s bill merely dealt with the right of the government to assign to the Settlement Division “national tasks in the settlement sphere, in accordance with the government’s policy,” and a list of the Division’s powers in implementing the government’s decisions in this sphere. What he had sought to achieve was the enactment of the existing status quo – no more and no less.What was absent from his bill was a list of legal provisions that the Settlement Division – a body that is not part and parcel of the government, and therefore not subject to all the laws and regulations that apply to the government and its agencies – must abide by in its activities as an executive arm of government. The amendment as enacted includes such a list, especially the duty to abide by the provisions of the Mandatory Tenders Act (1992), and of the Freedom of Information Act (1998).But before we analyze the implications of the historic amendment, a bit of history is called for, in order to put the issue in context.The Settlement Division was established in 1971 (when the Labor Alignment was still in power) within the framework of the WZO, but under the auspices of the Jewish Agency Settlement Department, and from the very start was fully financed by the Israeli government.However, since the Settlement Department is responsible for settlements within the Green Line boundaries only, and the Settlement Division was assigned the task of developing Jewish settlements in Judea, Samaria, Gaza, the Jordan Valley and the Golan Heights. The two bodies were formally separated in 1993. The reason the government originally decided to carry out its settlement activities in the territories by means of an external body had to do with the problematic nature of these activities from an international law point of view, and the preference of successive governments (both Labor and Likud) to avoid taking direct responsibility for settlement issues, largely for reasons connected with Israel’s foreign relations, given the general international disapproval of Israel’s settlement activities.Due to the experience and expertise it had accumulated over the years, the division was requested to assume settlement activities in the Negev (2002) and in the Galilee (2004) as well, thus turning into the government’s executive arm for settlement activities in the periphery – both those within and outside the Green Line.In the Sasson Report on unauthorized outposts in the West Bank, prepared by attorney Talia Sasson in 2005 at the request of prime minister Ariel Sharon, the Settlement Division was mentioned as one of the bodies involved in the construction of these outposts. Sharon’s request had been made against the background of Israel’s commitment to the Quartet’s Roadmap for an Israeli-Palestinian peace process, which inter alia called for Israel’s dismantlement of “unauthorized outposts.”Since then those opposed to unauthorized or “illegal” settlement activities in the territories have called for transparency in the activities and financial affairs of the division, and even for its dismantlement, pointing out that the government should not farm out to external bodies activities which it ought to carry out itself.Especially since the 18th Knesset, and Prime Minister Benjamin Netanyahu’s second government, these demands have increased in frequency and intensity.One of the reasons has been the fact that in recent years the financing of the division has been carried out largely by means of backhanded budgetary transfers in the Knesset Finance Committee, which have inflated the division’s budget to well above the sums allocated to it in the approved state budget, and mostly for activities in the territories, or for religious settlement nuclei in secular neighborhoods within the Green Line. Thus in 2013 the original budget allocation of NIS 58.2 million was increased to NIS 614.5m., and in 2014 NIS 58.2m.was increased to NIS 525m. Another reason was the division’s enhanced settlement activities outside the “settlement blocs” in the West Bank, which are rapidly turning the two-state solution – to which Netanyahu claims to be committed – into a totally unrealistic option.What finally pushed the government to act decisively were several developments that served as a wake-up call: • Police investigations toward the end of 2014 of suspicions that funds were illegally transferred to the division within the framework of what has been called the “Yisrael Beytenu Affair.” • A highly critical report, dated February 26, 2015, prepared by one of the attorney general’s deputies, Dina Silber, on the need to reform the highly irregular relationship between the government and the division.• Heavy criticism of a provision in the coalition agreement between the Likud and Bayit Yehudi signed on May 7, 2015, to the effect that the Settlement Division, with an increased budget, will be handed over to Agriculture Minister Uri Ariel.• A ruling by the High Court of Justice on June 29 to the effect that the government must pay heed to the recommendations of the attorney general’s office.• Criticism by the State Comptroller, submitted to Netanyahu in writing on November 30, of the manner in which the government was proceeding on the issue of formalizing the status of the Settlement Division, by supporting Smotrich’s bill while a committee of ministerial director-generals had not finished deliberating the government’s policy on the issue. Inter alia the State Comptroller wrote that “the chain of events on this issue raises concerns regarding a serious malfunction in the governance arrangements.”ALL THIS finally pushed the government to act, and produce a much less objectionable version of Smotrich’s bill for second and third readings, which was nevertheless met with an all-night Opposition filibuster.For all those who would like all settlement activities in the territories to come to an end, or those who want to get rid of the Settlement Division, which they view as the main enabler in this sphere, the new legislation is clearly a disappointment.To those whose main goal was to introduce transparency and proper administrative practices to the division’s operations, the new legislation is certainly a welcome improvement, though one must wait and see what will actually occur in practice, especially with regards to the division’s finances, and to whether it will be prevented from engaging in operations that are not explicit approved by the government.As to the more extreme political Right, which Smotrich represents, it is no secret that transparency and proper administrative practices are the last thing on their minds.What they want is maximal settlement activities in Judea and Samaria, with minimal obstacles. The previous chairman of the Constitution, Law and Justice Committee – the late David Rotem – said as much during meetings of the committee in March and April 2014, when he overtly obstructed an attempt by the then justice minister, Tzipi Livni, to pass regulations regarding transparency of the division’s operations.Therefore, even though Smotrich and his supporters consider the passage of the amendment a victory, insofar as the continued activity of the Settlement Division ensures continued settlement activities in the territories, they are undoubtedly concerned about how the new constraints will affect the division’s activities.In the final reckoning, for everyone, the proof of the pudding will be in the eating.The writer is a political scientist and retired Knesset employee.