The city of Modi’in-Maccabim-Reut appears on a new European Union list of settlements, putting it for the first time alongside places listed as ineligible for tax breaks when their goods are exported to European countries.

Part of the city, which sits halfway between Jerusalem and Tel Aviv, lies inside a no-man’s land buffer zone that existed between Israel and the West Bank between 1948 and 1967.

In practical terms, the city’s inclusion on the list will only affect three zip codes within Maccabim, a posh neighborhood on the city’s eastern edge.

Since that part of Maccabim is not recognized by the EU as Israel, products exported from there fall outside the parameters of the free-trade agreement known as the EU-Israeli Association Agreement.

The Times of Israel learned that the change was made due to pressure on the European Commission from the European Parliament.

The Foreign Ministry responded to the listing by saying the EU was ignoring reality: “There is not the slightest doubt that the Modi’in, Maccabim and Re’ut localities are an integral part of Israel, and their future is not in question,” the ministry said in a statement. ”The EU ignores reality when it extends the domain of conflict to places and issues that do not belong there. As for the other locations mentioned on the EU list, the European approach, though not new, is not acceptable in Israel’s view, and it is being addressed through ongoing diplomatic engagement.”

The change, in practical terms, causes the goods to be at a comparable disadvantage because European importers will be forced to pay import tax on them — but not on Israeli goods.

The process is clarified by zip codes, an EU spokesman told The Times of Israel. As of August 13, 2012, Israeli companies exporting to Europe must state where the products were produced, via postal code, so the EU can confirm the product was not created beyond the 1967 border.

Another area considered no-man’s land is located between the eastern and western parts of Jerusalem. Other locations listed by the EU as not being a part of Israel are the Golan Heights, the West Bank and East Jerusalem.