- The Washington Times - Thursday, June 22, 2006

RAFAH BORDER CROSSING, Gaza Strip — European monitors who have overseen the first Palestinian-controlled border terminal for the past seven months warn of unspecified “consequences” if Hamas officials don’t stop smuggling millions of dollars into the territory.

Yesterday, the Gaza Strip’s main international gateway was closed after the European monitors said an Israeli security alert prevented them from manning the crossing, officials said.

The Palestinian militant group Hamas said it suspected the Rafah crossing with Egypt was closed to send a message to its government to stop carrying cash by hand into Gaza to sidestep a Western aid embargo. The monitors brushed aside the accusation.

The Palestinian Authority has resorted to carrying millions of dollars in cash across the border from Egypt because Middle Eastern banks, fearing U.S. sanctions, have refused to transfer funds to the Hamas-led government. Most of the money represents donations from Arab and Muslim countries.

The Islamic militants paid government employees this week for the first time in almost three months after Foreign Minister Mahmoud Zahar carried $20 million across the border. Mr. Zahar’s refusal to declare the cash at the Rafah terminal has alarmed Israel and triggered a protest by the European delegation.

Italian delegation chief Lt. Gen. Pietro Pistolese warned the Palestinian officials in a letter last week that they must insist that large sums of cash be declared. The letter was addressed to Palestinian negotiator Saeb Erekat, who has been named by Palestinian Authority President Mahmoud Abbas to oversee the terminal.

A spokesperson for the border monitors said the decision is ultimately up to the Palestinians, but that if nothing is done, it would impede the monitors’ ability to oversee an orderly border.

“If there is an accumulation of cases like we have seen in the past few weeks, there will be consequences. The ball is in the Palestinians’ court,” said Julio De La Guardia, the spokesman for the European Union monitoring team.

Three weeks ago, Hamas spokesman Sami Abu Zuhri smuggled $807,000 in euros across the border in a money belt, Mr. De La Guardia said in an interview.

When Mr. Zahar arrived at Rafah last week, border officials had been notified by the Egyptians that the Hamas leader was carrying about $20 million. But when Mr. Zahar reached the Palestinian side, the foreign minister claimed his diplomatic status granted him immunity from being searched.

Mr. De La Guardia said the Palestinians should be requiring anyone with more than $2,000 in cash to declare it at the border.

“What we are asking for is international standards to be implemented,” he said. “For any citizen crossing the border, there needs to be accountability. We need to know how much money crosses the border, where it is coming from, and what its destination is.”

Mr. Zahar, who later deposited the $20 million in the Palestinian treasury, was defiant. In an interview with a reporter from Israeli Channel 2, he said the Palestinians had a right to smuggle money into Gaza given the international “siege” of the territory.

The EU monitoring spokesman said that the team was concerned by that statement and was awaiting a clarification from Mr. Erekat.

Mr. Erekat said the Palestinian president, who has taken control of the Gaza crossing by deploying his presidential guard, wants to do whatever is necessary to ensure the European monitors remain at the border.

“We want to follow international standards,” Mr. Erekat told The Washington Times, “but we don’t know what the law allows us to do or not to do. We have laws.”

The European monitoring team has been on site at the terminal since Nov. 30 as a result of a U.S.-brokered agreement that ended an Israeli blockade of Gaza. The monitors report on the management and performance of the Palestinian border workers, but have no authority to adopt or enforce policy.

An Israeli Foreign Ministry spokesman said that the government has complained about the money smuggling to the Europeans, the Palestinians and the Egyptians.

“It’s not enough money to effectively run the PA’s government, but its more than enough money to ensure that the terrorist infrastructure is kept alive and active,” said Mark Regev, a spokesman for the Israeli foreign ministry. “The problem is that it gives them cash, which is fungible.”

At a post office in downtown Gaza City this week, the lowest salaried government employees exchanged vouchers for three crisp $100 bills — about three week’s salary — from the money carried in by Mr. Zahar.

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