Goods from Israel settlements granted preferential EU trade deals

Goods from illegal Israeli settlements in the occupied West Bank have been bypassing European Union (EU) laws and profiting from the preferential trade tariffs with the EU, MEMO has learnt.

The EU has admitted that it has become “impossible” to monitor the source of goods imported to Europe from Israel despite a legal obligation to implement a policy of differentiating between Israel and settlement activities within its multibillion dollar bilateral trade relations.

Documents obtained under EU freedom of information rules seen by MEMO revealed that it has become “impossible” for the EU to differentiate between Israel and the Green Line following the introduction of a “new 7 digit zip code system”.

Notes from a meeting in June between Israeli Minister of Economy, Eli Cohen, and Lars Faaborg-Andersen, then the EU’s ambassador in Tel Aviv, state that the new zip code is “impossible for the delegation to follow” and the “EU requested Israel’s input to address the issue”.

The EU delegation confirmed that the European side suggested using a different method to ensure that settlement products are not granted the same preferential treatment Israel gets under existing trade rules, but the reply from the Israeli side was that “the current system is very effective and that the arrangement operates in a very satisfactory manner”.

It’s unclear if the new zip code system introduced four years ago was intended to circumvent tariff rules that differentiate between Israel and the occupied territories. However “despite having rather fewer people than China” said the Israel’s Haaretz newspaper, “Israel [is] switching to a rather more complicated 7-digit postal code system”.

The EU delegation repeated its stance on the differentiation rules but the admission by the EU Ambassador Faaborg-Andersen indicates that under his term, EU trade rules have been flouted for four years.

The influential European Council on Foreign Relations (ECFR) explained to MEMO details of the trade agreement between the EU and Israel. The EU and its member states, like the rest of the international community, do not recognise any legal or de facto Israeli sovereignty over the Occupied Palestinian Territories. This duty of non-recognition is based on international law, resulting in a legal obligation to clearly differentiate between Israel and its activities beyond the Green Line within their bilateral relations.

Asked how far the EU could go to uphold its own trade rules, ECFR representative said that the EU will not be able to completely terminate its trade agreement with Tel Aviv but if it really insisted on being faithful to its rules, then Brussels could cancel all its preferential trade deals with Israel until it clearly distinguishes between itself and the territory beyond the Green Line. In the meantime the EU and Israel could maintain a non-preferential trade agreement.

Read also: UN warns companies about doing business in Israeli settlements