EU may have funded terrorists, says Parliament

EU Parliament: the terrorists' bank? (EU Parliament photo)

For the first time, EU authorities have admitted that their money might have been used for terrorism. From the EU Observer, with thanks to LGF.

Tens of thousands of euro of EU funds may have been diverted to people linked with Palestinian terrorism, according to a report from the European Parliament, obtained by the EUobserver.

The report cites documentary evidence seen by a Parliamentary working group- set up last year after allegations that EU funds to the Palestinian Authority (PA) had been misused - that between 21,500-39,000 US dollars of EU funds may have been transferred to terrorists.

It is the first time that the EU has judged its own funds to Palestine may not been used for their intended purpose.

The allegations relate to funds given by the EU directly to the Palestinian Authority account from June 2001 until December 2002.

What constitutes evidence?

The report details the work of a 13-member cross-party parliamentary group. It is due to be finalised this evening (31 March) behind closed doors and is, in many ways, inconclusive.

The group says it does not yet have enough evidence to show funds were transferred directly to terrorists, but can show that monies were transferred from the PA to members of the Fatah group, which is linked to the 'Al Aqsa Martyrs Brigades' - a group on the EU's terror list.

The Israeli intelligence services say that evidence yielded from military operations in the Palestinian territories show 2.5 million euro which was "requested and delivered" to the PA fell into terrorists hands, of which 39,000 US dollars can be proven to have been actually paid out.

"Examination of the documents by the European Commission showed that payments to alleged Fatah activists had been authorised for a sum of 21,000 US dollars", according to the report.

Although it adds: "a link between the Palestinian Authority budget structure and the financing of Fatah is difficult to clearly picture".

Direct assistance

The EU paid around 10 million euro a month directly into the Palestinian Authority's budget during between June 2001 and December 2002 to help avert its financial collapse after Israel withheld tax transfers.

The retention of the tax left the authority unable to pay staff and pay for basic public services, promoting the EU and other international donors to step in.

The EU withdrew its direct assistance shortly after Israel resumed payments in June 2002.

The Parliamentary report backed the Commission's aim of propping up the PA but criticised the method chosen.

"The Commissioner [External Relations Commissioner Chris Patten] showed his best intentions in order to stabilise the situation and to encourage the reform of the PA institutions in a very difficult context".

However it does conclude: "Budgetary Assistance was not the most appropriate financial instrument to be implemented".

Sources taking part in the talks say there is still discussion over what constitutes evidence of funding terror which could change some details of the final text of the document.

It is not clear when the Parliament will publish the report.