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European Court of Justice: Israeli Settlement Goods do not Fall into Israeli Customs Authority

Wednesday, 13 October 2010 11:41
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Ref.: LRAD-E010-PR-20/3
2 March 2010

Al-Haq would like to highlight and commend the ruling of the European Court of Justice (ECJ), rendered on 25 February 2010, confirming that products originating from Israeli settlements do not fall into Israeli customs authority and

therefore do not benefit from preferential treatment under the EC-Israel Association Agreement (C-386/08 Brita GmbH v. Hauptzollamt Hamburg-Hafen).

According to the EC-Israel Association Agreement signed between the European Community and Israel in 1997, Israeli goods benefit from preferential treatment, i.e. tax-exemption when imported to the EU market. A similar agreement was signed between the European Community and the Palestinian Liberation Organisation for the benefit of the Palestinian Authority (PA), which gives duty free access to goods from the West Bank and the Gaza Strip. According to these two agreements, the origin of goods entering the EU is to be determined by the authorities of the exporting party.

Brita is a German company, which imports drink makers and accessories for sparkling water, produced by an Israeli supplier, Soda Club Ltd. The Israeli company manufactures in Mishor Adumim, an Israeli settlement in the occupied West Bank, located east of Jerusalem.

Brita intended to import goods produced by Soda Club Ltd. into Germany, under the duty-free rule, claiming that these products originated from Israel. The German customs authorities requested Israel to clarify the origin of the products in order to ensure that they indeed fall into the territorial scope of the EC-Israel Association Agreement and were not manufactured in the occupied West Bank. Israel refused to provide sufficient information, asserting merely that the products were manufactured in an area under Israeli customs authority. In September 2003, the German customs authorities refused to allow entry of these goods under preferential treatment, a decision that Brita challenged in court.

The German court referred the case to the ECJ, the highest court of the European Union in matters of European Union law. The ECJ ruled on Thursday that "products originating in the West Bank do not fall within the territorial scope of (the EC-Israel) Agreement and do not therefore qualify for preferential treatment under that agreement," confirming further “that products obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under that agreement.”

The Court further rejected the argument that Israeli goods ought, in any event, to profit from preferential treatment, be it under the EC-Israel or EC-PA Association Agreement, making reference to the general international law principle of the relative effect of treaties (‘pacta tertiis nec nocent nec prosunt”).

This principle, reflective of customary international law, and therefore binding upon the EC institutions as part of EU law, stipulates that treaties do not impose any obligations, or confer any rights, on third States. As reiterated by the ECJ, this rule finds particular expression in Article 34 of the Vienna Convention, under which a treaty does not create either obligations or rights for a third State without its consent.

Based on these considerations, the Court affirmed that the territorial scope of the EC-Israel Agreement “must be interpreted in a manner that is consistent with the principle ‘pacta tertiis nec nocent nec prosunt’,” concluding that each of the two association agreements has its own territorial scope. While the EC-Israel Association Agreement applies to the “territory of the State of Israel”, the EC-PA Association Agreement applies to the “territories of the West Bank and the Gaza Strip.” The Court thus affirmed that Israeli goods can receive preferential treatment only under the EC-Israel Association Agreement, provided that they originate from Israel and that only the PA is entitled to certify for export goods produced in the West Bank.

Al-Haq praises the ruling of the ECJ, which reaffirms the EU’s commitment to and adherence by general principles of international law and which essentially rejects Israel’s territorial claims over settlements constructed and operating in the occupied West Bank.

Commending the ruling of the ECJ, Al-Haq calls upon the EU Member States:

  • To act in accordance with the ruling of the ECJ and to take all feasible measures to ensure that Israeli settlement products do not enter the EU market under preferential treatment accorded under the EU-Israel Association Agreement.
  • To ensure that the “technical arrangement” signed between the EU and Israel in 2005 is applied in a manner that is consistent with the ruling of the ECJ, i.e. in manner, which allows the customs authorities of the EU Member States to distinguish between products originating from Israel proper as opposed to Israeli settlements.
  • To issue national guidelines and/or legislation which ensure the adequate labelling of products entering the EU market in a manner that allows consumers to distinguish between products originating from illegal Israeli settlements in and Palestinian produce from the West Bank.
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