An EU investigation has established there was "no conclusive evidence" that European Commission aid to the Palestinian Authority was used to finance armed attacks or unlawful activities.
The OLAF investigation lets the Palestinian Authority off the hook
"The investigation has found no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commissions contributions to the (Palestinian Authority) budget," the European Anti-Fraud Office (OLAF) said Thursday.
Risks of misuse
Palestinian militants of the Al-Aqsa Martyrs Brigade, a militia linked to Yasser Arafat's Fatah movement, march in support of Moussa Arafat and Palestinian leader Yasser Arafat, in Gaza city, Monday July 19, 2004. Backing down in the face of other widespread protests against the move, Yasser Arafat asked the ousted Palestinian chief of security to return to his job Monday, placing him in command of his controversial cousin, Moussa Arafat Palestinian officials said. Arabic on the headbands read that "Al-Aqsa Martyrs Brigade ". (AP Photo/Adel Hana)
But it did not rule out that some of the assets of the PA "may have been used by some individuals "for other than the intended purposes".
It said that despite significant progress made by the PA since 2002 through the introduction of a single treasury account for the consolidation of revenues, "risks of misuse of the PA budget and other resources cannot yet be excluded."
"This is primarily due to the fact that the internal and external audit capacity in the PA remains underdeveloped," it added.
Lack of communication
OLAF investigators for example determined that the PA leadership had transferred $238 million (177 million euros) to Swiss bank accounts between 1997 and early 2000, without informing its international donors.
"It is clear, however, that this cannot concern EU funds as the European Commission only made its first disbursement in the framework of the Special Cash Facility in November 2000," the office said.
OLAF had opened its probe in February 2003 following expressions of concern by European MPs and Israeli charges that some Palestinian groups were diverting EU funds to finance armed attacks.