The EU agreed this week to push ahead with introduction of labels that specifically identify Israeli goods made in settlements in the occupied West Bank, a policy that has angered Israel; but now an influential European think-tank is proposing going much further, including the targeting of Israeli banks.
The European Council on Foreign Relations, which frequently informs EU policy, argued in a paper yesterday that the EU is in breach of its own laws. It had to go further to distinguish its dealings with Israel from Israel’s activities in the West Bank and East Jerusalem, which it has occupied since 1967.
European diplomats have long said that labelling - to make clear the goods originate in settlements - is only the first in a series of steps the EU could take against Israel over its settlements policy, one that in financial terms is expected to have a relatively minor impact on the Israeli economy.
But the new proposals would go much deeper and further, reaching into banking, loans and mortgages, qualifications earned in settlement institutions and the tax-exempt status of European charities that deal with Israeli settlements.
“Under its own regulations and principles, Europe cannot legally escape from its duty to differentiate between Israel and its activities in the occupied Palestinian territories,” says the report.
The most significant proposal is on banking, where large Israeli institutions have daily dealings with major European banks.
Under European Commission guidelines from 2013, EU- and member-state-funded lending cannot be provided to Israeli entities operating in the occupied territories.
The issue extends into loans and mortgages: settlement property cannot be used as collateral for a European loan since Israeli-issued property deeds are not recognised.
Another area relates to qualifications from academic, medical and other Israeli institutions based in the West Bank since the EU does not recognise Israel’s sovereignty over the territory.
Likewise, there is a question mark over whether the EU should deal with Israeli institutions - such as the Ministry of Justice, the building ministry and the national police headquarters - which are based in East Jerusalem.
