EU court strikes blow against Israeli settlers

Israeli customs authorities had put forward documents saying that the goods were made in Israel and fell under the customs rules of the EU-Israel Association Agreement.

But the court said Soda-Club should have obtained papers from the Palestinian Authority instead if it wanted any customs breaks.

"Products obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under that [EU-Israel] agreement," the court explained in a statement, referring to the 1967 Six-Day War.

The ruling sets an EU-wide precedent for Israeli imports to the union, worth €8.8 billion last year.

It is unlikely to have a big financial impact, however. The European Commission says that exports from settlements currently account for just 0.87 percent of the trade volume.

But the judgement has a political significance in the context of long-standing EU complaints that Israeli support for settlers is damaging the Middle East peace process.

An internal EU report of November 2009 written by the 21 EU embassies located in Ramallah said the union should put pressure on settler products from the most sensitive occupied regions as a mini-sanction.

It outlined a number of measures under the rubric "Recommendations to re-inforce the EU policy on East Jerusalem," including to "ensure that products manufactured in East Jerusalem are not exported to the EU under the EU-Israel Association Agreement," and to "provide guidance on origin labeling for settlement products to major EU retailers."

The recommendations were not taken up by EU foreign ministers.