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European Court of Justice Rules Goods Made in West Bank Not Israeli

By Eric Lipman

The highest court in the European Union ruled today (PDF) that goods manufactured in the Israeli occupied territories of the West Bank and the Gaza Strip are not covered by the trade agreement between the European Community and Israel, and thus may be subject to import duties when shipped into a member state. The case originated in Germany, where Brita had imported some equipment manufactured by Israeli company Soda-Club Ltd. Brita claimed the goods were eligible for preferential tax treatment under the EC-Israel agreement. German customs officials investigated and, when Israeli authorities refused to answer the question whether the goods were made in the occupied territories, Germany refused to grant that treatment. According to the Court, the EC has two independent trade agreements -- one with Israel and one with the PLO. Each of those is geographically limited, and "products obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under" the agreement with Israel. Rather, all goods manufactured in the West Bank and Gaza would be covered by the EC-PLO agreement and apparently would qualify for tax breaks if their origin was certified by the Palestinian Authority. When...

Full post as published by Legal Blog Watch on February 25, 2010 (boomark / email).