Diplomats Say EU Knew Palestinians Misappropriated Cash To Finance Terrorism

EUP20020509000511[0] Rotterdam NRC Handelsblad (Internet version-WWW) in
Dutch 08 May 02

Reference:

1.EU Provides Further Euro 3.5 Million Humanitarian Aid to Palestinian
Territories EUP20020508000238 Brussels Rapid Database WWW-Text English 08
May 02

[Unattributed report: "EU Knew That Arafat Misappropriated Cash"]

[FBIS Translated Text] Brussels, 8 May -- The EU has deliberately refrained
from monitoring the misappropriation of European money by the Palestinian
Authority over the past few years. EU diplomats said this on the occasion of
new Israeli accusations published earlier this week in Jerusalem. The EU has
deliberately never raised the issue of the diversion of European relief
money to finance terrorism and corruption because it feared that this would
jeopardize the resumption of the Middle East peace process, according to the
diplomats.

One EU diplomat also said that the monitoring of Palestinian leader Yasir
Arafat's budget by the IMF could not prevent European money from being used
for terrorist purposes either. "Everybody has known for quite some time now
that money ended up in the wrong hands. Officially, however, they feigned
ignorance so as not to jeopardize attempts to revive the peace process. The
IMF, too, did not want this to happen," he said.

The Israeli Government says it has evidence that Arafat used EU cash to
finance terrorism. Earlier this week, EU Commissioner Chris Patten (foreign
policy) received the Israeli evidence, which consists of a three-page
document. According to Patten's spokesman, the Commission is taking the
issue very seriously. However, the Commission's first impression is that the
evidence is not conclusive, the spokesman said.

More than one half of all the EU's international aid goes to the Palestinian
Authority. Between 1994 and 2001, the EU gave 1.446 billion euros in aid to
the Palestinians, including 256 million euros in loans from the European
Investment Bank. The EU member states also supported the Palestinian
Authority with 1 billion euros.

Last year, EU Commissioner Patten decided that there was insufficient
control on the use of EU funding. Therefore, he decided to call in the IMF
so as to regain control over the situation.

[Description of Source: Rotterdam NRC Handelsblad in Dutch (Internet
version-WWW) -- prestigious left-of-center newspaper]