To date, there is no evidence that funds from the non-targeted EU Direct Budget Assistance to the Palestinian Authority have been used to finance illegal activities, including terrorism. This is the provisional assessment which the European Anti-Fraud Office (OLAF) gave today, August 10, 2004, in reaction to a number of media reports on the matter. OLAF emphasizes however that the investigations are still ongoing, therefore final conclusions can not yet be drawn.
Alleged irregularities with the non-targeted Direct Budgetary Assistance paid by the EU to the Palestinian Authority between 2000 and 2002 have been subject to an external investigation by the independent European Anti-Fraud Office (OLAF) since February 6, 2003. OLAF decided to open it on the basis of information received from two different sources and has since focussed on two aspects: On the one hand on allegations that European funds were misused to finance terrorism; on the other hand on the systems and control mechanisms operating within the programme of Direct Budget Assistance. This programme – like similar programmes of other donors – consisted of contributing directly to the general budget of the Palestinian Authority without linking the payments to specific kinds of expenditure.
The investigations are ongoing, therefore every interim finding may be subject to review. However, to date, the provisional assessment of OLAF is that there is no evidence that the EU non-targeted Direct Budget Assistance was used to finance illegal activities, including the financing of terrorism. This analysis is in line with the declarations already made by OLAF during a meeting of a special Working Group of the European Parliament on March 10, 2004.
In the course of their enquiries, OLAF investigators – from justice, police and financial departments – have been collecting, analysing and comparing information from a number of different sources, including the International Monetary Fund, the World Bank, representatives of Third Countries in the Middle East, audit firms and private sector sources, as well as some intelligence services of EU-Member States, who have a greater presence in the region. The OLAF investigators have also been in close co-operation with the Israeli administration and the Palestinian Authority. Several missions into the region have taken place and a number of documents have been provided by both sides.
Olaf assesses all material by using standards of evidence commonly accepted within the European Union.
Since investigations are ongoing, OLAF cannot comment on specific steps it may or may not take during its enquiries; neither is it possible for OLAF to estimate the expected duration of the investigation.