oPt

OPT: European Union renews support to Ministry of Finance

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Minister of Finance, Dr Salam Fayyad, and European Commission Representative, Mr John Kjaer, today signed a memorandum of understanding which relaunches European Union assistance to the Ministry of Finance. The European Union's first step will be a €4 million project to help the Minister of Finance in ensuring that Palestinian taxpayers' money is spent efficiently and that all expenditures are accounted for to the highest international standards.

The European Union had been one of the largest providers of assistance to the Ministry of Finance. However, it suspended its activities following the creation of the Hamas Government. With the establishment of the National Unity Government and the appointment of a Minister committed both to the Quartet principles and the development of sound public financial management, the European Commission has decided to renew its assistance to the Ministry of Finance.

Welcoming this renewed partnership between the European Union and the Palestinian Authority, Dr Salam Fayyad said, "The European Union has always played a leading role working with the Palestinian Authority to help it achieve its objective of managing public money efficiently and transparently. This support for the Ministry's internal audit and internal control departments will help me ensure that we work in accordance with the best international standards, and that the government can give every Palestinian taxpayer the assurance that their money is being legally and honestly spent."

John Kjaer responded, saying, "Dr Fayyad and his team at the Ministry of Finance have impressed all of us by their dedication, seriousness and professionalism. They have achieved remarkable results in exceptionally difficult circumstances. I am very pleased to be able to relaunch this project today which will help ensure that the PA's money is well managed. And I take the opportunity to recall that the European Union continues to call on Israel to transfer to the Palestinians the money that Israel collects on their behalf."

Up until 2005 the European Union had already provided basic and advanced on-the-job coaching for the internal audit department, ad-hoc support to the internal auditors as well as the provision of general governance advice on the management of public sector finance audit and control. Over 90 staff received training and/or worked on practical assignments within the Ministry of Finance and other ministries, gaining a variety of skills including risk analysis, documentation, applying audit concepts and techniques, reporting and communication. During this period a new financial regulation was passed into law and separate departments for internal control and internal control were created.

The project relaunched today provides €4 million of assistance to be delivered continuously until June 2009. It builds on the EU's and the Ministry's earlier achievements and is focused on further strengthening the public financial management system of the Palestinian Authority. Through its implementing partner, the internationally renowned firm of Ernst & Young, the European Union will be able to deliver training in both the Ramallah and Gaza offices of the Ministry of Finance. The first training programmes will begin on 1 July in Ramallah and 8 July in Gaza.

In the coming weeks the European Union will also restart a major two-year programme of assistance to the Palestinian Authority Customs Department, and restart assistance to the Tax Administration.

For further information contact: Mark Gallagher, First Secretary

Mark.gallagher@ec.europa.eu

Mob: 00 972 2 541 5888