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I read that there is $5.4 billion in planned donations to the Palestinians to build the Gaza Strip. I guess that all the money is foreign, and will be transferred between banks and different systems. I know that MoneyGram or Western Union (and many other businesses) take a fee for money transfers. How many businesses, platforms, banks, and hands will this $5.4 Billion pass? Could you generalize a movement chain example? How many fees are expected to be taken off this "donation"?

Are these kind of money movements the same as when a certain country gives aid to another?

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    Not to be flippant but usually the chain is from donor to some ngo or un agency to leader's pockets ( look at yassir arafats net worth). With Un taking its cut – user4012 Oct 15 '14 at 17:48
  • That is what I am trying to figure. Who will be banking the most from this? The banks that do the transfer? The leaders of a so called government? Or the actual people? – KingsInnerSoul Oct 15 '14 at 20:07
  • This is difficult to answer. The PA is infamously corrupt, and no doubt some of the money will be going towards them when it shouldn't be, but I'm not sure how much of the answer to this question would have to be prediction. It's also contingent on whether Hamas fully allows Gaza to transition back to PA control. – Avi Oct 15 '14 at 20:22
  • @KingsInnerSoul - "Actual people" is the least likely of ANY possibility. – user4012 Oct 16 '14 at 5:08
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    @KingsInnerSoul About a quarter of USA aid to Afghanistan went to bribes. If there are such guidelines, I don't think they're being followed. – Avi Oct 16 '14 at 17:01
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Let's take this from March 2016 as an example: EU approves $274 million in aid for Palestinians

  • $184m to the Palestinian Authority (PA) via PEGASE
  • $89m via UNRWA

I won't focus on the money going to UNRWA, the agency has its own complicated maze of subcommittees. The $184m is intended to be funneled to the PA, but with a focus on health and education.

PEGASE is a mechanism the EU set up in 2008 to facilitate direct financial support to the PA. This EU document explains how PEGASE works. The money is sent directly from the EU using the ENPI to the PA's bank account so there are no middle men that the money will pass.

The lion share of the PEGASE donations goes to two PA expense areas:

  • About 70%: Civil Servants and Pensioners (CSP)
  • About 15%: Vulnerable Palestinian Families (VPF)

VSP is a welfare system for poor families and CSP pays parts of the salaries of civil servants staff and pensioners. That is everything from doctors in public hospitals to teachers and policemen.

Payments to CSP appears to be monthly and to VPF quarterly. So if salaries are due in October 2016, the EU will pay the amount in September 2016.

A very complicated system of checks are in place to ensure that the money reaches the intended recipients:

For the CSP and VPF components, the ‘activity flows’ describing the checks to be performed by the EUREP, audit firms, PA and banks consist of more than 50 actions. Excluding the PA staff involved, the Pegase DFS checks require the involvement of 16 full-time equivalent employees.

Among the checks mentioned is ensuring that no recipients are on any terror lists. "Lists" in plural because the EU, the US and Israel have different lists of sanctioned individuals and each list has to be checked by PEGASE staff.

A picture of the verification system is found on page 42 of the linked to document.

From what I can deduce, PEGASE has names and addresses (and in the case of CSP beneficiaries salary) of the almost 100,000 Palestinians recieving aid. If civil servant is hired, his or her salary and contact details are forwarded to PEGASE administrators who then either denies or accepts the beneficiary. According to the EU itself, there is very little corruption or mismanagement of the funds:

In December 2013, the European Court of Auditors (ECA) published a report on PEGASE ... The report also concluded that the control measures put in place are robust and that there is no sign of mismanagement or diversion of funds. http://ec.europa.eu/enlargement/neighbourhood/pdf/key-documents/palestine/20160219-aap-2016-palestine-part_1-financing-commission-decision.pdf

Details of the actual money transfers are found in the ENPI financing agreements. The appendix at page 44 - 49 lists all of them for the years 2008 - 2010. They appear to not be available online. But in them you should find details about the involved banks and so on.

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