Products originating in the West Bank do not qualify for preferential customs treatment, rules EU Court

By Leo Gasteen

The European Court of Justice (ECJ) has ruled that products originating in the occupied territories of the West Bank cannot qualify for preferential customs granted for Israeli goods detailed in the Israel-EC agreement. 

After a German firm (Brita) sought to import goods supplied by an Israeli firm (Soda-Club) into Germany, it informed the German customs authorities that the goods originated in Israel and hoped to be granted the preferential treatment provided for under the EC-Israel Agreement. 

Suspecting that the products originated in the occupied territories, the German authorities asked the Israeli customs authorities to confirm that the products had not been manufactured in those territories. Although the Israeli authorities confirmed that the goods in question originated in an area that is under their responsibility, they did not reply to the question whether the goods had been manufactured in the occupied territories. 

The ECJ ruled that Brita's import cannot fall under the scope of the EC-Israel Agreement, as it applies to the territory of the State of Israel. As the product originates from the West-Bank the import would fall under the EC-PLO Agreement which applies to the territory of the West Bank and the Gaza Strip.

For that reason, the German authorities refused in the end to grant Brita the preferential treatment, on the ground that it could not be established conclusively that the imported goods fell within the scope of the EC-Israel Agreement.

In addition, the ECJ noted that under general international law, an obligation cannot be imposed upon a third party – such as the Palestinian Authority of the West Bank and the Gaza Strip – without its consent. As a consequence, the EC-Israel Agreement may not be interpreted in such a way as to compel the Palestinian Authorities to waive their right to exercise the competence conferred upon them by virtue of the EC-PLO Agreement and, in particular, to refrain from exercising the right to issue customs documents providing proof of origin for goods manufactured in the West Bank and the Gaza Strip.

Background

The European Community concluded two Euro-Mediterranean Association Agreements, first with Israel (the EC-Israel Agreement) and then with the Palestinian Liberation Organisation (the EC-PLO Agreement), the latter acting for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip. Those agreements provide inter alia that the importation into the European Union of industrial products originating in Israel or the Palestinian territories is to be exempt from customs duties and that the competent authorities of the parties are to cooperate with a view to determining the precise origin of the products receiving preferential treatment.

Brita is a German company which imports drink-makers for sparkling water, as well as accessories and syrups, all of which are produced by an Israeli supplier, Soda-Club Ltd, at a manufacturing site at Mishor Adumin in the West Bank, to the east of Jerusalem.

European Court of Justice - Justice and Application - Full Text