18th Nov 2017

No evidence of 'misuse' of EU money by Palestinian Authority

There is no "conclusive evidence" European money was used for "armed attacks" or "unlawful activities" by the Palestinian Authority since 1997, the

European Anti-Fraud Office (OLAF) announced on Thursday (17 March) in its closing investigation report on the matter.

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  • No conclusive evidence about 'misuse' of EU money in Palestine, but risks cannot be excluded, according to OLAF (Photo: European Commission)

Some of the investigators' findings include a transfer of 238 million US dollars from the Palestinian Authority to Swiss bank accounts between 1997 and early 2000, without international donors having been informed.

However, EU money was not part of the above-mentioned sum. The European Commission took the decision of financially helping Palestine in 1997, but only initiated the payments in November 2000.

Since that time, and up to April 2003, the Commission paid 246.3 million euro to the Palestinian Authority under the programme of Direct Budget Assistance, the latter consisting of "direct payments to the PA's budget which were not linked to any specific kind of expenditure".

After April 2003, the Commission changed the forms of assistance, but paid an additional 145 million euro in the period 2003 - February 2005.

OLAF investigations cover overall payments and conclude there are no evidence EU money was used for "armed attacks".

No misuse, but...

Nevertheless, the report specifies "there are consistent indications to support the hypothesis that it cannot be excluded that some of the assets of the PA may have been used by some individuals for other than the intended purposes".

But OLAF declined to give more precise indications about what exactly "consistent indications" or "other than the intended purposes" meant.

For some, OLAF's report, with its ambiguities, has confirmed their suspicions.

Centre-right German MEP Armin Laschet stated: "It was a mistake to grant EU non-targeted financial aid, which was given between 2000 and 2003 in the form of direct payments to the PA's general budget and was not linked to any specific kind of expenditure".

Mr Laschet also said EU Foreign ministers and the European Commission had been "too credulous" while giving financial aid to the PA.

The European Commission, on the other hand, welcomed OLAF's final report, and agreed with its recommendations.

These include, amongst others, improving "the control (by all donors) of revenues and the expenditure of the PA budget" and setting up a "single system of monitoring".

Also, "the present European Commission support given to the Palestinian Authority to improve their controls and internal audit should be continued and should be reinforced", the report says.

The Anti-Fraud Office launched its investigation in February 2003, following accusations that European Commission's funds to the Palestinian Authority were misused "for terrorist activities".

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