PricewaterhouseCoopers (PwC) and Ernst & Young (EY) have both confirmed that they are no longer auditing two NGOs that were recently designated as terrorist organisations by Israel.
EY is no longer auditing the Union of Agricultural Work Committees (UAWC), even though it only took over the contract in May 2019 from PricewaterhouseCoopers (PwC). UAWC is one of the six organisations which were designated by Israel on 19 October 2021.
Meanwhile PwC has confirmed that it no longer audits the accounts for Defence for Children International Palestine (DCI-P) another of the six recently designated organisations. “PwC Palestine, a member of the PwC Global Network ….had audited it since at least 2014.
Both UAWC and DCI-P were described in the Israeli designation as “an arm of the “Popular Front for the Liberation of Palestine”. The designation document for UAWC said that it “acted in forgery and deceit vis-à-vis many European countries and international organizations to obtain financing, which in practice reached the Popular Front terror activity.”
UK Lawyers for Israel (UKLFI) wrote to EY (formerly Ernst and Young) in May 2020, before the Israeli designation of UAWC, warning EY about UAWC’s links with the PFLP, and in particular the fact that several of their officers had been implicated in a terrorist attack. At that time EY’s counsel replied saying that EY member firms “regularly evaluate negative information that becomes available after acceptance of a client that could give reason to doubt the integrity of the client or its management.”
UKLFI wrote to PwC, pointing out that it was auditing two PFLP linked organisations (UAWC and PFLP) in May 2018, and highlighting the publicly available information that showed connections of these two organisations to a designated terrorist group, the PFLP. In December 2018 PwC Palestine replied saying:
“We have conducted an investigation into the allegations UKLFI have raised in the letters against PwC and the NGOs. Given the very serious nature of the allegations, our investigation has taken some time …… The results of our investigations are such that we consider each NGO to be undertaking legitimate humanitarian based activities that are legally and ethically permissible. We note, in particular, that current global sanctions data base searches indicate that no current or former NGO board member…is included on any government terrorist or other government sanctions or watch list ….…. Our conclusion is that we do not consider there to be any good reason why PwC Palestine should discontinue providing audit services to the NGOs.”
In October 2019 it emerged that
Abdul Razaq Farraj, the then finance director of UAWC and an employee of UAWC for 30 years was arrested by the IDF in late 2019 as part of a 50 person PFLP terror network and according to his indictment, authorized the 23 August 2019 bombing which killed 17 year old Rina Shnerb and injured her father and brother.
Samer Mina Salim Arbid, was Financial Director of the UAWCfrom around 2015 to 2016 and, according to the indictment, he commanded a PLFP terror cell that carried out the bomb attack on Rina Shnerb and her family.
Both these Financial Directors were members of PFLP and had been detained on security grounds in the period in which PwC Palestine audited UAWC.
Other financial service companies have ceased dealings with DCIP and UAWC over the past few years following representations from UKLFI:
DCI-P’s funding platform, GlobalGiving, confirmed that DCI-P was not eligible to receive donations through its organisation in 2019, following representations by UKLFI which pointed out links between DCI-P and the PFLP. In June 2018 Arab Bank and Citibank stopped providing banking services to DCIP after UKLFI’s interventions.
UKLFI has also highlighted UAWC’s connections to the PFLP terrorist group to its European donors. Following UKLFI’s interventions,
Norway confirmed it had no money earmarked for donations to UAWC
The Netherlands suspended funding to the UAWC and launched an investigation
Belgium launched an investigation into whether its donations had funded terrorism