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"As is" reference - not a United Nations document

Source: European Commission
European Union (EU)
15 May 2012

Brussels, 15 May 2012

The European Commission and the High Representative of the Union for Foreign Affairs and Security Policy published on 15 May 2012 the annual “neighbourhood package”, consisting of a joint communication (“Delivering on the new European Neighbourhood Policy”) making an assessment of the first year of implementation of the new ENP adopted in 2011, a separate joint communication proposing an “Eastern Partnership Roadmap”, a report on the “Partnership for Democracy and Shared prosperity” with Southern Mediterranean (including a roadmap for future action), an Eastern Partnership progress report, 12 country reports (on developments in 2011 and with a set of recommendations for the future), including one on occupied Palestinian territory, and a statistical annex.

In 2011, the Palestinian Authority (PA) has made good progress in the implementation of the Action Plan in the areas within its control. However, the occupation and internal Palestinian divisions continued to have a serious impact on the PA’s ability to serve the public effectively and to pursue economic development.

On the basis of this year’s report and with the view of a sustained implementation of the ENP Action Plan in 2012, the Palestinian Authority is invited to:
• Pursue the implementation of the reconciliation agreement signed on 3 May 2011 based on a commitment to the two-state solution.
Hold genuine, transparent local and national elections in the oPt in line with international standards.
Reform and develop the Palestinian security sector, institutionalising democratic control, promoting an environment conducive to civilian oversight and accountability for individuals suspected of abuses, and ensuring that all security sector agencies fully respect human rights, in particular for all detainees.
Adopt a unified penal code which adheres to international human rights standards, including the formal abolition of the death penalty and strengthens legal guarantees
for all fundamental freedoms.
Clarify the responsibilities of the three main judicial institutions namely the Ministry of Justice, the Office of the Attorney General and the High Judicial Council.
Adopt and implement the new regulatory framework for public procurement, including the adoption and harmonization of the relevant by-laws and procurement-related regulations.
• Implement a Public Expenditure and Financial Accountability (PEFA) assessment in 2012 and continue improving public finance management, in particular by developing
and upgrading the State Audit and Administrative Control Bureau (SAACB) as an independent external audit institution in line with the International Organisation of
Supreme Audit Institutions standards.
Develop costing models and ensure appropriate allocation of the national budget to cover the cost of providing a set of basic social protection interventions, including the
development and implementation of contributory schemes.
• Sign and ratify the regional Convention on pan-Euro-Mediterranean Rules of Origin.
Implement the energy strategy including further progress on electricity sector reform particularly through further reductions in net lending.

Political dialogue and reform

The EU continued to support the operational capacity of the Central Elections Commission and the Palestinian Legislative Council. Nonetheless the holding of presidential, legislative and local elections across the entire occupied Palestinian territory remains a priority precondition for the reinvigoration of democratic legitimacy, institutional sustainability and the reinforcement of good governance.
Freedom of association remains under tight control in the West Bank and is under permanent threat in the Gaza Strip. Freedom of assembly is guaranteed by the Palestinian Basic law but suffered a number of violations in the West Bank. Violations of the rights of Palestinian journalists, by Israeli forces as well as by the Palestinian security forces in the West Bank and Gaza Strip, persisted on a wide scale.
Improvements continued to be witnessed regarding the independence of the judiciary and combating impunity.
An Anti-corruption Commission was created, co-operation between the Ministry of Finance’s Internal Audit Department and the PA’s audit committee improved and the PA Supreme Audit, State Audit and Administrative Control Bureau was strengthened with EU support.
Security and law enforcement sector reform remained unsatisfactory, with no major progress in terms of civilian or democratic control over security forces.
In the West Bank the de facto moratorium on the death penalty continued. Serious violations of detainees' rights by security agencies and patterns of illtreatment and torture across the oPt were reported.
In 2011, 11 Palestinians were killed in Israeli-Palestinian conflict-related incidents in the West Bank and Gaza Strip, and 265 Palestinians were injured. West Bank settler-related violence remained of high concern.
On 9 October, the High Representative hosted Quartet envoys and the parties in Brussels, with the latter stating their readiness to engage in line with the Quartet statement. Under the auspices of the Quartet, this process brought about the first direct meeting of the parties’ negotiators on 3 January 2012.

Economic and social reform

The economy of the occupied Palestinian territory grew by 9.8% in the first half of 2011 although there was a sharp contrast between the Gaza Strip (27.7%) and the West Bank (4.5%).
The PA continued its efforts to reduce the structural deficit, increasing tax collection and lowering spending in line with the Action Plan and the Palestinian National Development Plan. The EU continued to be the most reliable and important partner of the PA, contribute essentially to the stabilisation of the precarious fiscal situation.
In 2011, the EU also granted duty-free and quota-free access to the EU market for Palestinian agricultural products, processed agricultural products, fish and fishery products.
High unemployment rates (20.2%), low participation rate (around 42% of the labour force), low wages and high rates of poverty against the background of rapid population growth continue to be crucial concerns.
A national tri-partite Socio-economic Council was set up with the aim of facilitating social dialogue. In May, the PA adopted a Business Strategy (2011-2013) of the Ministry of Social Affairs (which also covers Gaza).

Trade-related issues, market and regulatory reform

• In 2011 oPt was the smallest trading partner for the EU in the Euro-Mediterranean region, with total trade amounting to EUR 99 million. EU–oPt bilateral trade contracted by 13% year-on-year after having doubled in 2010.
The Agreement between the EU and the PA on the further liberalisation of trade in agriculture, processed agricultural products, and fish and fisheries products, concluded in 2011, entered into force in 2012.
An assessment under the EU TAIEX programme noted various gaps in the sanitary and phyto-sanitary legislation and in institutional capacity.
The improvement of the investment climate in 2011 was severely hampered by the closures imposed by the Israeli government on both the West Bank and Gaza.
The PA procurement law was adopted in July, reflecting, to a large extent, the essence of the United Nation Commission on International trade Law Model Procurement Law (1994).
As regards public finance management and external audit, the EU continued to support the PA Supreme Audit Institution, State Audit and administrative Control Bureau with technical assistance.
The PA participated in implementing the 2011-2012 industrial cooperation work programme that Euro-Mediterranean Industry Ministers adopted in May.

Transport, energy, environment, the information society, research and development

Transport: The PA adopted a revised transport strategy in April. Restructuring of the public passenger transport is ongoing and the independent roads regulator remained to be established.
Energy: The PA adopted an energy strategy until 2013 and pursued electricity sector reform, with EU assistance aimed at reducing net-lending. The PA implemented energy efficiency measures and developed renewable energy projects, solar energy in particular. The EU remains committed re-launching trilateral energy cooperation with the Palestinian Authority and Israel.
Climate change: Sub-regional co-operation (Israel, Jordan, Palestine) was launched on the impact of climate change on water availability.
Environment: The reform of the environment and water sectors continued. The Cabinet endorsed the environment sector strategy for 2011–2013, and the Environmental Quality Authority prepared the related action plan for 2012-2014.
Research and innovation: The PA participated in the 7th Framework Programme for Research and Technological Development (11 grant agreements involving 11 participants).

People-to-people contacts, education and health

Education: The Palestinian Authority remained highly committed to the implementation of the Education Development Strategic Plan 2008-2012. However, challenges persisted. Higher education cooperation continued (two additional Tempus university cooperation projects). No project was selected under Erasmus Mundus programme, the Jean Monnet programme or the Marie Curie scheme.
Culture: The PA developed a cross-cutting Youth Strategy for 2011-2013. An increasing number of Palestinian youth and youth organisations benefitted from the Youth in Action programme (43 projects targeting 176 young people). The oPt continued to benefit from the Euromed Heritage IV programmes and participated to the Euromed Scuola 2011 event.
Health: The PA started implementing its health strategy 2011–2013 including by rehabilitating health care facilities, establishing a chronic diseases centre and further preparing a health insurance law. The PA participated in the EU-supported ‘Episouth Plus’ project aimed at increasing health security in the Mediterranean region and South East Europe.

EU–occupied Palestinian Territory – BACKGROUND


The European Neighbourhood Policy governs the relations between the EU and occupied Palestinian territory.

1997: The Palestinian Authority and the EU concluded an Interim Association Agreement on trade and cooperation.

2005: EU-PA ENP Action Plan was approved.


Due to the continuing emergency situation in the West Bank and Gaza there is no National Indicative Programme (NIP) under the European Neighborhood and Partnership Instrument (ENPI) covering the period 2011-2013. Funding committed under the bilateral envelope of the ENPI to the occupied Palestinian territory for 2010 amounted to EUR 377.9 million.

2004-2010 EU Financial Assistance to the Palestinian people from the EU budget amounted to EUR 2.923 billion, this being mainly directed at direct and indirect financial support to the PA, as well as to UNRWA, humanitarian and food aid. Most assistance is channelled through the EU PEGASE Mechanism (« Mécanisme Palestino-Européen de Gestion de l’Aide Socio-Economique »).

2012: The Agreement between the EU and the PA on the further liberalisation of trade in agriculture, processed agricultural products, and fish and fisheries products entered into force.

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