Israel frets as imminent EU ruling expected to force settlement labeling
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Expected verdict cannot be appealed

Israel frets as imminent EU ruling expected to force settlement labeling

Court of Justice on November 12 likely to make it legally binding for all member states to label West Bank goods; decision ‘could harm Israeli food exporters,’ official warns

Raphael Ahren is the diplomatic correspondent at The Times of Israel.

In this photo from February 11, 2014, Israeli workers inspect barrels in a winery in the West Bank settlement of Psagot. (AP/Dan Balilty)
In this photo from February 11, 2014, Israeli workers inspect barrels in a winery in the West Bank settlement of Psagot. (AP/Dan Balilty)

Israel is worried about an expected court decision that would enshrine in law the requirement for European countries to label Israeli products made in the settlements.

On November 12, the Court of Justice of the European Union is set to issue its final decision on a case that began when an Israeli winery in the West Bank and a pro-Israel advocacy group appealed a French court’s decision that determined that wines produced by Israeli settlers may not be labeled as “Made in Israel.”

The EU court is widely expected to rule that settlement goods must indicate that they were produced in Israeli settlements, as opposed to in sovereign Israel.

The court’s decision cannot be appealed and will be legally binding on all EU member states. In practice, it would allow any pro-Palestinian activist to take legal steps against West Bank products labelled as as made in Israel, Israeli officials said this week.

Furthermore, Jerusalem fears the forthcoming ruling could have a chilling effect on European businesses currently considering whether to import settlement products, which has the potential to seriously hurt Israeli exporters.

“We are concerned about the expected verdict,” an Israeli diplomatic source told The Times of Israel. “We expect European countries that value the peace process and that deem the relationship with us important not to implement the ruling in a manner that would damage our relationship.”

The EU introduced the need to label settlement goods in November 2015, triggering vociferous condemnations from Israeli politicians. While technically all 28 member states were required to implement the guidelines laid out in the “interpretative notice” the European Commission published at the time, some countries, including Germany, openly rejected the idea. Hungary said it had no intention to label settlement products.

A year later, in November 2016, the French Minister for the Economy and Finance published a notice about the need to label goods that originated in the areas Israel captured in 1967, including the West Bank, East Jerusalem and the Golan Heights.

“Foodstuffs from the territories occupied by Israel must be labelled to reflect this origin,” it read, adding that the label should include the term “Israeli settlement” or equivalent terms.

Psagot, a winery in the Binyamin region of the West Bank — a 15-minute drive from Jerusalem — and a French-Jewish advocacy group called Organisation Juive Européenne (OJE) appealed that decision at the French Council of State, a government body that serves as legal advisor to the government.

Wine barrels age at Psagot Winery, located in a settlement of the same name in the hills of the central West Bank. (Psagot Winery/JTA)

The Paris-based Council of State, in turn, referred the matter to the EU’s Court of Justice in Luxembourg.

Until now, European governments could ignore Brussel’s guidelines on labeling. In practice, many supermarkets across the EU continued to carry settlement goods, with few enforcing the labeling requirement.

However, if the court next month decides to uphold the French ruling, every group or individual who spots a settlement product being sold anywhere in the EU as “made in Israel” can take the issue to a local court. The local court would then no longer need to discuss the merits of settlements, as the matter has already been ruled on in Luxembourg, according to Jerusalem’s understanding of the legal process.

This ruling will give a great boost to BDS

“The European countries’ maneuvering space will decrease after the ruling,” an Israeli diplomat lamented, speaking to The Times of Israel on condition of anonymity. “Those seeking to delegitimize Israel could use the ruling against us, both on the legal level as well as in terms of public perception.”

In June 2019, the Court of Justice’s Advocate General Gerard Hogan issued an opinion on the matter. He argued that “the absence of the indication of the country of origin or place of provenance of a product originating in a territory occupied by Israel and, in any event, a settlement colony, might mislead the consumer as to the true country of origin or place of provenance of the food.”

Therefore, he concluded that goods made in a territory captured by Israel in 1967 should indicate the “geographical name of this territory and the indication that the product comes from an Israeli settlement if that is the case.”

A new housing project in the West Bank settlement of Naale, January 1, 2019. (AP Photo/Ariel Schalit)

Hogan’s ruling is non-binding, but the court often follows the recommendations of its advocate general.

The Israeli government was opposed to Psagot’s and OJE’s appeal to the Council of State from the beginning, and especially after Hogan published his opinion, and made efforts to convince them to withdraw it.

“However, the company decided to continue the process, which in the future may create a more difficult reality that could harm Israeli food exporters,” the Israeli official said.

“This ruling will give a great boost to BDS,” another Israeli official said, referring to the anti-Israel Boycott, Divestment and Sanctions movement. “We know that they’re following this with great interest.”

Various government bodies — including the Foreign Ministry, National Security Council (which is part of the Prime Minister’s Office), Economy Ministry and Justice Ministry — have been trying to soften the blow of the expected ruling, but Jerusalem soon realized it’s likely fighting a losing battle.

“We all agree that this ruling will be very damaging,” the official said.

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