Sunday, September 27, 2015


A 2015 report, from EU auditors, stating that more than two billion dollars in donations, made to the Palestinian Authority over the past six years, cannot be found, and was not applied to any of the projects which it was intended to support, reinforces my opinion that one simply cannot accept any Palestinian PEPs as clients, for any purpose, as universal corruption means their money is probably diverted from its original purpose. Any international bank that accepts their money does so at a huge risk.

Additional information, released this year, reveals that Palestinian PEPs are spending much of the aid and donation funds on themselves. The most prominent candidate to succeed retiring PA President Abbas reportedly spent over $2m on a lavish wedding for one of his children, in Cairo, this summer. Where did all that money come from ? He does not earn a salary from any known source, but does receive aid money intended for Palestinian projects.

Another PEP asked for $4m, from a Gulf country donor, so that luxury housing could be constructed in the West Bank, allegedly to block Israeli settlements there, but the area he has proposed for the homes is not near any settlement activity. If this makes no sense, remember that it is estimated that there are 1700 millionaires living in the Territories, where unemployment exceeds 50%, and most jobs are in local government, or an NGO or non-profit organization.

The prudent path is to decline all individuals who wish to open accounts:

(1) Who advise that they intend make a large initial deposit, or to carry large balances.
(2) Who have Jordanian passports, but their place of birth is located in Israel.
(3) Cannot be identified as business owners, with established businesses that you can verify.

If you, by the process of elimination, has established that the prospective client appears to be, by the  weight of the evidence, to be a Palestinian PEP, then you would be well advised to decline his business, for some corrupt PEPs have been charged by their government, and their dirty laundry exposed in the media, which would probably cause reputation damage to your bank. Also, what if the PEP funds a terrorist act in the EU or North America, through your bank ?

More ominously, some PEPs, are affiliated with Hamas, meaning terrorist funding issues could arise, and even in the West Bank, others have ties to Hamas, and are receiving funding from Hamas' overseas operational headquarters in Turkey. The potential problems are just too high; avoid these potential customers, as part of your risk-based compliance program.

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