The European Union and its member states have established relations with Israel economically and politically, with the discrepancy between these two levels gradually increasing in recent decades. During this time, the EU has upgraded its economic relations with Israel in various fields, and has signed a string of economic agreements with Israel, giving it a "favored state" status that influences all economic relations. However, the political relations between the two have been characterized by conflict and tension due to the continuing Israeli occupation of the Palestinian territories since 1967, and, more importantly, the persistence and expansion of Israeli settlement activities in the occupied West Bank and East Jerusalem, with the purpose of "Judifying" the greatest possible amount of land in the West Bank-up to 60 percent of the occupied territories-as a prelude to annexing them. In the occupied West Bank, Israel has established a settler-colonial security/administrative system that seeks to reinforce the economic capacity of the settlement project and increase the agricultural and industrial output of Israeli settlements. The proportion of exports from settlements within the occupied territories to the European Union has been increasing year after year.
It has become clear to the European Union that its economic relations with Israel provide Israeli products, especially those from the settlements, a favored status, along with tax exemptions, making it easier for settlements and their various economic projects to obtain grants, aid, prizes, and investments from the EU. For this reason, the EU has taken punitive steps against Israeli settlements and their economic projects. This report investigates these measures, and discusses the Israeli government's reaction to these measures, as well as the extent of the impact of these decisions on Israel's settlement policy in the occupied territories.
New EU Instructions Regarding Settlements
In June 2013, the European Commission sent new instructions to all EU countries, prohibiting the financing of, or the investment in, Israeli settlements established on occupied Palestinian and Syrian lands; the EU directives also prohibited distribution of grants or prizes to these settlements and their products. On July 19, the EU Commission published these decisions on its official webpage in a four-page document consisting of five sections.[1] The first section of the document deals with the general principles that prompted the formulation of the new guidelines, while the remaining four sections specify the manner in which sanctions are to be applied on Israeli settlements located in territories that have been occupied since 1967.
The document explains that the objective behind these guidelines is to affirm that the EU does not acknowledge Israeli sovereignty over Arab lands that were occupied in 1967, based on the principles of international law and in line with the oft-repeated stance of the EU in this regard. The document asserts that the EU views the West Bank, East Jerusalem, the Gaza Strip, and the Golan Heights as occupied territories, and that Israel does not have sovereignty over these lands or any part thereof. Based on these principles, the document explains that the EU considers all of Israel's activities and civil works throughout these territories-including East Jerusalem and the Golan Heights, which have been annexed to Israel- as illegal, and that the EU does not acknowledge any changes to the Israeli borders established on June 4, 1967, with the exception of modifications that are agreed-upon by the parties engaged in the Middle East Peace Process. The document also states that these guidelines will be put into effect starting January 1, 2014, and that any agreement to be signed in the future between Israel and the EU, or any EU state, must include a special provision clearly affirming that all Israeli settlements in the lands occupied in 1967 are not part of the state of Israel, and are not, therefore, included in the agreements between the European Union and Israel.
The remaining sections of the document explain in detail how to prevent financial aid, prizes, and investments from EU institutions from reaching settlements, as well as the mechanisms that should be implemented for this purpose. The provisions state that any Israeli institution or body that wishes to obtain EU support must present a statement affirming that all of its activities take place within the borders established on June 4, 1967, and that they have no direct or indirect links to Israeli settlements in East Jerusalem, the West Bank, or the Golan Heights. This condition applies to all private and public Israeli institutions and firms, as well as non-governmental associations and organizations, municipal councils, regional councils, and banks. The Israeli ministries that are headquartered in the territories occupied in 1967, especially East Jerusalem (such as the Ministry of Justice), are exempted from the EU sanctions, as are Israeli human rights organizations and peace-oriented NGOs that are active in the occupied territories.
These directives derive their importance from the fact that they reveal the EU's intention to further its policies opposing Israeli occupation and settlement of Palestinian lands, which opens the possibility for other, more serious sanctions against Israel in order to pressure it to cease settlement activities in the occupied territories. For the first time, the EU has published clear and detailed guidelines placing sanctions upon Israeli settlements in an official and binding manner. If they decide to apply these guidelines to the letter and establish an effective mechanism for their implementation, and if the member countries commit to these guidelines in practice, this would constitute the beginnings of effective pressure against Israeli decision makers regarding the continuation of settlement activities in the occupied territories.
Israeli Settlement Product Labeling
In recent years, the European Commission, along with EU leaders, has debated how products exported from Israeli settlements to the EU are, or are not, specifically labeled as such. In this regard, 13 EU foreign ministers sent a letter to Catherine Ashton, the EU High Representative for Foreign Affairs, on April 12, 2013, expressing their support for her efforts to formulate guidelines for all EU countries regarding labeling requirements for products from Israeli settlements imported by the EU countries and sold in European markets.[2] On July 8, 2013, Ashton sent a letter to the senior officials in the European Commission, instructing them to take all necessary legal and administrative steps in order to place such labels on the products of Israeli settlements by the end of 2013. In her letter, she affirmed that there is a definite link between the EU's position opposing the construction of Israeli settlements in the occupied territories, and the necessity of preventing the possibility that products from the Israeli settlements could be exported to the EU as products from within the recognized borders of June 4, 1967.[3] This step is even more significant because it dovetails with the active non-governmental boycott movement in Europe against Israeli products in general and the products of Israeli settlements in particular. These activities are led by many activist groups, including solidarity groups, trade unions, student unions, and consumer groups, all of which urge the boycott of Israeli products due to the persistence of the occupation and the settlements. The European boycott movement has begun to register tangible successes on this front.
The Israeli Government's Reaction
These limited, yet significant, EU measures have angered the Israeli government, which wishes to continue enjoying the status of the most favored nation in its economic relations with the EU, not only within the June 4, 1967 borders, but throughout the territories gained through its expansionist occupation, including East Jerusalem, the West Bank, the Gaza Strip, and the Golan Heights. Israel is insistent on considering its colonial project in the occupied territories an integral part of the state, and its government continually attempts to impose this formula upon the EU in their economic relations. In this context, Israeli administrations, especially the Netanyahu government, have consistently attempted to combine the legal/political reality of its settlement project with that of pre-1967 Israel. Israel also claims that whoever opposes the Israeli project of occupation and settlement in the occupied Palestinian territories; whoever rejects its legitimacy, calls for its removal, or demands sanctions on settlements, or on Israel as a state that occupies and settles lands belonging to others, is in fact calling for the destruction of Israel and guilty of anti-Semitism rather than calling for confronting Israel on its occupation and settlements.
Israeli Prime Minister Benyamin Netanyahu contacted many EU leaders, as well as the head of the European Commission and the EU High Representative for Foreign Affairs Catherine Ashton, with the goal of canceling or postponing these decisions. His attempts, however, were met with failure: the leaders of EU states were not swayed by the familiar arguments employed by Netanyahu, which claim that any sanctions against the settlements or against Israel would damage negotiations with the Palestinians, and would harm the so-called peace process between Israel and the Palestinians. Furthermore, the official Israeli position claims that these sanctions constitute an attempt to impose permanent borders on Israel though the exertion of pressures on the Hebrew state, and that there are many more urgent problems in the Middle East than the Palestinian cause or the persistence of the Israeli occupation and settlement in Palestinian and Syrian lands.
Netanyahu's logic, however, neglects the fact that the Israeli colonial occupation and settlement in the Palestinian and Syrian territories are a clear affront to international law and the decisions of the UN and other international organizations, not to mention dozens of similar decisions that have been issued by the EU over the years. Furthermore, Netanyahu conveniently ignores the fact that the Israeli settlements constitute a war crime according to international law, and that Israel is attempting-through the expansion of the settlements under the cover of negotiations and the "peace process"-to create new facts on the ground in the occupied territories in order to expand its borders to the farthest possible limit in the West Bank, preventing the establishment of a Palestinian state in the occupied Palestinian territories within the June 4, 1967 borders. In other words, Netanyahu expects the world to deal with all these trespasses and exactions as natural occurrences.
While Netanyahu was conducting these talks with the leaders of the European states, Israeli sources indicated that the government was preparing a series of steps against the EU in case it refused to backtrack from its position. Following the EU's publication of its punitive directives regarding Israeli settlements, and after consulting Netanyahu, Israeli Defense Minister Moshe Yaalon issued an order to the Israeli military to cease its cooperation with EU representatives in the occupied West Bank. He also ordered a halt to the aid that is provided by the EU to Palestinian economic projects in Area C of the West Bank, which constitutes around 60 percent of its total area and is where Israel is attempting to further its settlement activities in the hope of annexing these lands in the future. Israeli directives were also issued to complicate the entry and exit of EU representatives from the Gaza Strip.[4]
However, it would be difficult for Israel to persist with these punitive steps against EU activities in the occupied Palestinian territories because it understands that the EU has the ability to impose serious and painful sanctions against Israeli settlements in the occupied territories, or against Israel itself-if Israel decided to enter into a true sanctions war over this matter. The measures that were taken against the EU activities in the occupied territories indicate that Israel wants to enter into negotiations with the European Union in order to reduce the EU measures or postpone them under weak pretexts, such as the continuation of negotiations with the Palestinians.
Conclusion
These modest-though important-directives issued by the European Union were designed to prevent Israeli settlements from obtaining aid from the EU, and to implement specific labeling for products coming from the settlements. These measures, coming into effect on the first of January 2014, are extremely belated. The EU has always viewed the Israeli settlements in occupied Palestinian and Syrian territories as illegitimate, as breaking international law, and as contravening UN decisions and dozens of decisions that were issued by the EU itself. It is also clear to the EU that Israeli settlements contradict the EU's interpretation of the Oslo Accords and that the continual expansion of these settlements is reducing the possibility of establishing a Palestinian state in the territories that were occupied in 1967. These facts, however, have not prevented the EU from signing important trade agreements that play a crucial role in reinforcing Israel's economy, as well as the Israeli occupation and settlements. This includes a free trade agreement signed by the two parties in 2004, without making this economic relationship conditional upon Israel halting its settlement activities, not to mention the removal of settlements and the entire apparatus of Israeli occupation from the Arab lands occupied in 1967. Furthermore, over the last decades, the EU has agreed to allow its political role to be marginalized within the so-called peace process, despite the fact that it possesses the power to pressure Israel, especially given that Israel relies on its partnership with the European Union in its economic relations and foreign trade to a large extent.
So far, Israel has taken the European political stance toward the Palestinian cause lightly because it has accepted this state of affairs and has not shown a reaction against it. The European Union has continued the policy of pleasing Israel and the provision of aid to the Hebrew state, which has made Israel conclude that it can pursue its policy of settlement, occupation, and brutality against Palestinians without risking EU sanctions.
The importance of these measures stems from the fact that they signal the beginning of a new stage in the EU's treatment of the Israeli occupation and settlements. Nevertheless, these sanctions against settlements are not nearly enough to influence Israel to halt settlement activities, or even to limit their expansion. The EU continues to import products from Israeli settlements, even if they do not receive the tax exemptions granted to Israeli products. If they so desired, the following measures could effectively influence Israel's settlement policies. Firstly, they could enter into a complete boycott of products from Israeli settlements, preventing them from entering the EU states, as these are the products of illegal settlements established on occupied lands that were forcibly confiscated from their rightful Palestinian owners. Secondly, they could boycott settlers themselves, including measures that would prevent them from traveling to the EU, which would be easy to enact as the names and addresses of settlers are publicly available in many databases, including the electoral register. Lastly, they could explain to Israel, in no uncertain terms, that the time to end occupation and settlement has come, and that the economic agreements with the European Union are conditioned upon the halting of settlement activities, in anticipation of the removal of illegal settlements along with the occupation.
Importantly, and despite the significance of these recent EU measures, the world has yet to witness a single, serious Arab attempt to revive the Arab boycott of Israel or encourage the existing boycott initiatives led by civil society. We have also not witnessed any Arab attempts to promote the model of these European sanctions among other states that have no barriers in their relationship with Israel, such as the United States and Russia.
**This Assessment was translated by the ACRPS Translation and English Editing Department. The original Arabic version published on December 4th, 2013 can be found here.
[1] The document was published by the Israeli daily Haaretz in its original English text:
"Commission Notice, Guidelines on the Eligibility of Israeli Entities and their Activities in the Territories Occupied by Israel since June 1967 for Grants, Prizes and Financial Instruments Funded by the EU from 2014 Onwards," Haaretz, July 16, 2013, http://www.haaretz.co.il/news/politics/.premium-1.2073678.
[2] Barak David, "Half of the EU Countries Support the Placing of Labels on the Products of Settlements," Haaretz, April 20, 2013, www.haaretz.co.il/news/politics/1.1998882.
[3] Barak David, "The European Union Intends to Place Labels on the Products of Settlements in European Markets before the End of 2013," Haaretz, July 23, 2013, www.haaretz.co.il/news/politics/.premium-1.2078564.
[4] Amos Herel, "Following the Boycott of Settlements: Yaalon Orders a Halt to Cooperation with the European Union," Haaretz, July 26, 2013, http://www.haaretz.co.il/news/politics/1.2081595.
