EU to Tax Israeli Goods Originating Outside Green Line
The European Union is planning to impose customs tariffs on Israeli goods originating from occupied areas outside the Green Line, including the Jewish settlements, east Jerusalem and the Golan Heights, reported Haaretz newspaper on Monday.
The Israel-EU free trade agreement covers only the “State of Israel” inside the Green Line.
In August 2000, customs authorities from several EU countries presented Israel with a list of detailed questions about the origins of Israeli exports to Europe.
Israel is supposed to provide detailed responses to the questions at a conference next month with tax officials from Israel and all the EU countries, said the paper.
At a meeting Monday of the Associations Commission responsible for administering the free trade agreement, EU officials are expected to raise the issue of the rules of origin in the trade pact.
Foreign Ministry deputy director-general Ehud Gol, heading Israel's delegation to the conference, is expected to tell the Europeans the issue is "technical, not political" and belongs at the professional level of tax officials from both sides, while the settlements issue should come up only in final status negotiations between Israel and the Palestinians.
EU External Relations Commissioner Chris Patten said last week in the European parliament: "We have to respect the rule of law. The West Bank, Gaza and the Golan Heights depart from the territorial coverage of the agreement with Israel. This is not a new point.
Already in 1998, a commission report said granting special access to European markets for products originating in the Israeli settlements...contradicts the rules of origin, since those areas are not part of Israel according to international law."
EU sources told the paper that "this is not about sanctions against Israel but about proper implementation of an international agreement made to guarantee that the products under discussion do not benefit illegally from preferential tax treatment. Of course we are aware of the political symbolism of the matter, in Israeli and Palestinian eyes, but Europe cannot be party to fraud."
Next week, EU tax officials meet to form a unified policy for dealing with Israel.
An Israeli source said: "There's no argument the agreement does not cover the territories. But for 30 years the Europeans paid no heed. So why now?"
The source said that "at worst, customs tariffs will be imposed on settlement products and that will spell death for some of the factories, since they can't compete in the European market. But the national economy can withstand it."
The source said that when the issue came up last year, before the current Intifada, "we had the feeling that we were on the verge of a solution for the settlements in the negotiations with the Palestinians, and the problem would go away on its own.” – Albawaba.com
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