An audit by the European Commission examined the financial aid provided by the European Union to Palestine. Following the Hamas attack on Israel, the aid announced on 7 October has concluded, bringing relief to European leaders after the controversy over suspending the funds. The review confirms that European money was not directed to the Palestinian movement and that aid flows will continue without disruption on the whole. The vice president in charge of Community Management stated that the review found no evidence that European funds financed the terrorist organization directly or indirectly, a conclusion welcomed after the commissioners’ gathering.
According to the European Commission, the document demonstrates that the control framework is functioning and that the protective measures introduced and strengthened in recent years are effective. They worked well, and there is no indication that funds were diverted to other goals. Nonetheless, the review also identified seven projects valued at €75.6 million that are no longer viable given the current on-the-ground situation.
These projects are largely large-scale infrastructure initiatives related to gas containment, access to desalination plants, and healthcare services in the Gaza Strip. The commission notes that their application is not valid in the present context. The aid includes allocations to the Gaza local government, civil servants, and retirees, with a plan to reprogram these funds to support Palestinians in light of new priorities.
Review of 119 contracts
The audit reviewed a total of 119 contracts, totaling €331 million, financed through various European instruments. Eighty-eight percent, worth €216 million, was reviewed and approved by Brussels after receiving information from governing institutions and organizations. The European Commission asked for clarifications and additional information on 12 percent of contracts, amounting to €39 million.
Officials described a process of posing questions and awaiting answers, and sources within the community stressed that, despite the information requests, overall outcomes were acceptable and no instances of fund diversion were identified. However, two projects worth €8 million raised concerns tied to terrorism and hate speech, and Brussels has not disclosed which projects were approved, a step that would constitute a breach of contract disclosure norms.
While the in-depth review did not uncover major problems in aid to Palestine, the risk of fund diversion persists in a war-wary and politically charged environment. This climate prompted Brussels to enhance controls by adding safeguards. In all new contracts with Palestinian entities, including operations centrally managed by the European Commission, clauses against sedition and restrictive measures are now included to reinforce compliance.
Organizations benefiting from EU funding are being asked to provide more information on the procedures and tools used to meet contractual obligations under restrictive measures and anti-subsidy clauses during grants involving third-party funding. The commissions require detailed information on the organization and composition of the management boards of all sub-beneficiaries to ensure transparency and accountability.