Belgium no longer wants Italy to transfer two suspects in EU scandal - sources

FILE PHOTO: Plenary session at the European Parliament in Strasbourg

MILAN (Reuters) - Belgium no longer wants Italy to hand over two women suspected of involvement in a cash-for-influence corruption scandal at the European Parliament, two sources with direct knowledge of the matter told Reuters on Wednesday.

The scandal, the biggest to rock EU politics in decades, hinges on suspicions that Qatar and Morocco bribed politicians, parliamentary assistants and NGOs to influence decisions of the EU assembly.

Qatar has denied any involvement, while Morocco has compared the probe to "judicial harassment."

Maria Dolores Colleoni and Silvia Panzeri, respectively the wife and daughter of former EU lawmaker Pier Antonio Panzeri, believed by Brussels prosecutors to be one of the main players in the alleged corruption, remain under house arrest in northern Italy.

The sources said that the Belgian judicial authorities have sent the two women's lawyers a document, written in French, in which they waive handing over requests on condition that they agree, when requested, to go to Belgium for questioning.

"There is nothing official at the moment", Nicola Colli, one of the two women's lawyers said.

"Let's wait, there are still technical issues to be addressed", Angelo De Riso, the other lawyer for the pair, told Reuters, adding that he had asked an appeals court in the northern city of Brescia to release the two women.

"We hope that our two clients will soon be set free", he said.

The Brussels Public Prosecutor's office did not comment. A source close to the Belgian investigation confirmed that the request has been renounced.

The move from Belgian authorities came a week after Panzeri, who was arrested in Brussels in December and charged with three others including Greek EU lawmaker Eva Kaili, admitted guilt and agreed to cooperate in exchange for a reduced sentence.

The decision not to pursue the extradition of Panzeri's family members is not formally part of the agreement with him, but is a consequence of his willingness to cooperate, a source with direct knowledge of the matter told Reuters.

An appeals court in Brescia had previously agreed to hand over the women to Belgium. The women are still in Italy because their lawyers had filed an appeal against their transfer with Italy's highest appeals court.

Colleoni and Silvia Panzeri have been under house arrest since Dec. 10, in compliance with a European arrest order issued by Belgian magistrates over their alleged "participation in a criminal organisation, money laundering and corruption". They have denied any wrongdoing.

A third Italian woman, Panzeri's tax accountant, was arrested on Jan.18 and is waiting for the Milan appeals court to decide whether she can be handed over to Belgium.

(Reporting by Emilio Parodi, additional reporting by Charlotte Van Campenhout in Brussels, editing by Alvise Armellini and William Maclean)