The EU Finally Acts Against Cash Smuggling

December 24, 2006

The Funding for Peace Coalition has consistently rallied against the efforts of the Hamas government to smuggle money and weapons into the Gaza Strip. Such activities deceive local residents, where only a small minority is likely to benefit from such efforts. These manipulations also distort the basis of claims put out to aid agencies.

In an agreement brokered by the USA in the autumn of 2005, the European Union accepted the task of monitoring the Gaza crossing points. However, until recently, the mission did not use its powers, and the result has often been seen as impotence.

In one of the most recent episodes, the Palestinian Prime Minister, Ismail Haniyeh, returned from a trip to Iran laden with money he stated was intended for salaries, for health care and for armaments. Eventually, he was required to deposit the cash - approximately $35 million - in an Egyptian bank, outside Palestinian territory. Following the diplomatic clash, the EU closed the crossing for two weeks, until General Pietro Pistolese, the head of the European Union's monitoring mission in Rafah, forced a commitment from Palestinians to cease the smuggling.

The Funding for Peace Coalition finds encouragement from the fact that the EU mission has discovered a new-found resolve to enforce its mandate and agreements with the Palestinians. What is too early to tell is whether this commitment will hold. Neither is it clear if this agreement applies to the cessation of the building and use of smuggling tunnels - around 200 are reported to have been found so far under the Gaza borders.

The Hamas Prime Minister is determined not to be humiliated further. On December 28 2006, Haniyeh and his entourage drove straight through a Gaza crossing, without stopping, on his way to a pilgrimage to the holy city of Mecca. The border with Egypt was once again temporarily closed, as EU monitors expressed their anger at Haniyeh's deliberate defiance of previous agreements.

The issues involved are more than mere technicalities. The EU wishes to choke the supply of cash which funds the terrorist attacks that destroy normal life on both sides of the border.

Unfortunately, the immediate effect of these incidents impacts on the average Palestinian. Border closures as a result of these capricious acts mean uncertainty, frustration, long queues and a disruption to trade. The pride of the ruling Palestinian elite has yet again triumphed over the daily needs of the individual.

The article below comes from the Israeli newspaper, "The Jerusalem Post". It is a more comprehensive version of events on the Gaza border as reported by Al-Jazeera and others.

Fatah moving to end cash smuggling

Tovah Lazaroff, The Jerusalem Post, December 21, 2006

The economic noose around Hamas tightened a bit Thursday when the head of the European Union's monitoring mission in Rafah, Gen. Pietro Pistolese, told reporters that the Palestinian Authority's Fatah forces, which operate that border crossing, have committed themselves to resolving the problem of cash smuggling into Gaza.

Pistolese said the EU knew of some $60 million in cash that had passed through the Rafah border crossing. While Pistolese spoke in strong language about the need to stop the flow of money, he said that what had been secured from the Palestinians was a commitment to finding a solution rather than an agreement to stop the smuggling all together.

"It's not an agreement, it's a commitment. This commitment was expressed yesterday morning at the committee of Palestinians, Israelis and EU officials who met to discuss issues relating to the border crossing," Pistolese said.

The EU is a neutral, third party monitor at the Rafah crossing. It has a mandate to report on activity at the crossing, but it has no authority to impose conditions. The issue of cash smuggling through the Rafah crossing is of particular concern to the Israelis and to Western governments who fear the funds are going to support terrorism either directly or through the Hamas government.

Elmar Brok, the head of the EU Parliament's Committee on Foreign Affairs, was visiting Israel this week and told The Jerusalem Post he was concerned about the flow of cash through Rafah.

In light of Hamas's failure to renounce violence and recognize the state of Israel, Israel and Western governments have economically boycotted Hamas for the last year, a move that has crippled the Hamas-led government.

But despite the economic boycott, cash has still entered the Palestinian territories, including Gaza. Hamas leaders and Palestinian legal experts have maintained that there is no law that prevents anyone, including Hamas officials, from bringing money into the PA territories. Those passing through the crossing are, however, expected to declare sums greater than NIS 80,000.

An Israeli security official disputed Palestinian claims regarding the lack of regulations. He told the Post that the Palestinians have ignored an agreement which monitors the cash flow.

The extent of the problem of cash entering Gaza was highlighted on December 14, when PA Prime Minister Ismail Haniyeh of Hamas unsuccessfully tried to cross from Egypt into Gaza carrying approximately $32 million. He was eventually forced to leave the funds in an Egyptian bank before being allowed to pass through the crossing into Gaza.

Chief Palestinian negotiator Saeb Erakat told the Post that this money would be given to the Arab League. Erakat said that no pledge had been made to the EU to stop those entering Gaza, including Hamas, from bringing in cash.

At a press conferencea in Ashkelon, Pistolese also addressed the December 14 attack on the border crossing in which Hamas gunmen, angry that Haniyeh had been prevented from returning to Gaza, burst into the Rafah terminal, sparking a gun battle with guards.

The PA's Force 17, the presidential guard which is responsible for security at the terminal and loyal to Abbas, returned fire.

In spite of the violence, Pistolese said that the EU intended to fulfill the terms of its contract at the terminal, which calls for EU forces to remain at the border crossing until May 24, 2007.

"I am aware that there have been rumors that the Mission will be withdrawn. At this time, there is no information to suggest that this will be the case," said Pistolese. "The Mission will continue until at least May 24, 2007," he added.

In addition to monitoring the flow of cash, the EU's mission has also checked to make sure that no weapons have been smuggled through the terminal.

Israeli intelligence has widely reported on the smuggling of weapons through tunnels built under the border. But Pistolese said that this phenomenon has not extended to the terminal itself, which is under the EU jurisdiction.

"No weapons have been smuggled throughout the Rafah crossing point," said Pistolese. "It is impossible to cross the border [through the terminal at Rafah] while wearing weapons, explosives or other dangerous substances."

Still, he noted that the EU's work was limited to the terminal and it was not in a position to monitor activity along the border outside the boundaries of the terminal.

He therefore called on Israel to stand by its commitment to maintaining freedom of movement and access by re-opening the Rafah crossing to pedestrians.

Since the EU began monitoring the passage of pedestrians through the terminal between Gaza and Egypt, some 344,574 people have crossed the border, according to Pistolese.

"As you know, the situation changed dramatically on June 25, 2006 when there was an attack on an IDF border post near Kerem Shalom and Cpl. Gilad Shalit was captured," Pistolese said. Since then, he added, the crossing had only been opened for 30 days. This has allowed only 65,112 people to cross the border.

The border is now closed. It was last opened for six days from December 13 to 18, to allow Palestinians from Gaza to cross into Egypt en route to the Haj pilgrimage.

That has been "the longest period of continual operation since June. Our hope is that there will be a return to normal operations as soon as possible. We are focusing our efforts on this," Pistolese said.

An Israeli security official told the Post that the border is now closed awaiting repairs following the attack. He said that since the crossing is controlled by the Palestinians, who allow large sums of cash to pass through and fail to stop suspected individuals, Israel exercises the only authority it has over the terminal, which is to shut it down.

©2003. All Rights Reserved. Copyright information and fair use notice.
P.O. Box 2009. Rochford, Essex. SS4 1DB ENGLAND. Phone: +44 (700) 593-0923. Fax: +44 (700) 593-0984.