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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.“Presenting a film that was funded by Israeli taxpayers and made by Israeli artists as a Palestinian film is unacceptable and unfair,” Economy Minister Naftali Bennett said on Tuesday.Culture Minister Limor Livnat said that Arraf “acted in a seriously cynical way by asking for recognition and support for her film as an Israeli film, while presenting it as a one from ‘Palestine’ when abroad.“This is not only a misrepresentation by [Arraf] not only to the Israeli Film Fund, but to the many Israeli members of the film’s crew who worked on the film and were shocked at her behavior,” Livnat said.The Israeli Film Fund, which invested NIS 1.358 million in Arraf’s project, decided this week to demand she return the money. The fund held a hearing at the demand of Livnat.Israeli Film Fund chairman Uri Dori said Arraf’s declaration that the film is Palestinian is “fraud, since the agreement between her and the fund requires that the film must be defined as Israeli.”The Venice Film Festival website lists Villa Touma without a country of origin, but the film’s description mentions “Palestine” and Arraf’s bio on the site claims she grew up in “the Palestinian village of Mi’iliya,” which is, in fact, a Christian Arab town in the Western Galilee, adjacent to Ma’alot-Tarshiha. Israel is not mentioned once on the page.The Economy Ministry will hold a hearing as to whether to demand director Arraf return the NIS 600,000 aid she received from the Small and Medium Business Agency in the ministry.The agency sent Arraf a letter this week, pointing out that article 5.3.2 of the instructions pertaining to receiving aid in filmmaking states that the film must be defined as Israeli.“When you admitted your application, you declared that the movie is ‘Israeli’ as required in the rules of the program, and therefore, it was discussed by the committee. Funding for the film was granted based on your declaration,” the letter reads.It continues: “We realized that your film was declared ‘Palestinian’ and that is how you presented it to third parties. Therefore, the film is no longer ‘Israeli’ as demanded in the program’s rules.”The Israel State Lottery (Mifal Hapayis), which gave Arraf a NIS 114,000 grant, said she violated the conditions of the funding by calling her film Palestinian.Arraf declined to comment, but legal representatives at Adalah: The Legal Center for Arab Minority Rights in Israel said that calling the film Palestinian is not a violation of the terms of the subsidy.“Not only is there no condition requiring our client to present the film with a particular identity, but if my client wishes to present the film as ‘Palestinian’ it does not mean it was produced by the Palestinian Authority of ‘The State of Palestine,’ and does not contradict the fact that the producer is an Israeli citizen,” Adalah attorneys responded.Adalah continued: “Ms. Arraf is an Arab, a Palestinian and a citizen of the State of Israel and if she decides to emphasize her nationality by presenting the film as Palestinian when she is the producer, director and screenwriter, her choice is legitimate and no law in Israel forbids her from doing so.”