On 29 October 2009, Attorney General Bot published his Opinion on a preliminary reference addressed to the European Court of Justice by a German court on the application of the EC-Israel Association Agreement in the context of products originating from the occupied Palestinian territories and the question of their entitlement to preferential customs treatment under the EC-Israel Preferential Trade Agreement (for the full text of the Opinion; and the press release).
According to the AG’s Opinion: (i) the customs authorities of the importing State are not bound by the result of the subsequent verification carried out by the customs authorities of the exporting State, and (ii) goods certified by the Israeli customs authorities as being of Israeli origin but which prove to originate in the occupied territories, more specifically the West Bank, are not entitled either to the preferential treatment under the EC-Israel Agreement or to that under the EC-PLO Agreement.
In the framework of the Euro-Mediterranean Partnership, bilateral agreements have been concluded between the Community and its Member States , of the one part, and the majority of countries of the Mediterranean basin, of the other part. Those agreements provide, in particular, that products originating from the Mediterranean countries concerned may be imported into the European Union free of customs duty. The Community and its Member States concluded such an agreement both with Israel (EC-Israel Agreement) and the Palestine Liberation Organisation (EC-PLO Agreement), acting for the benefit of the Palestinian Authority.
Brita is a German company which imports drinks makers for sparkling water manufactured by the company Soda-Club based in Mishor Adumin, a settlement in the occupied West Bank. When the Israeli customs authorities were asked about the origin of the products by the German company, which suspected that the products originated in the occupied territories, the Israeli customs authorities labeled these products as coming from Israel. The German Court submitted a reference for a preliminary ruling on whether “the German customs authorities are bound by the result of the subsequent verification of origin of those products carried out by the Israeli customs authorities.” It also asked which agreement would apply to goods originating from the occupied territories.
The AG equally holds that the certificate issued by the exporting State must be capable of certifying unambiguously the products origin from that State in order that the preferential treatment relating to that State may be applied to those products. In this context, the AG recalls that Israel’s borders were defined by the UN Plan for the Partition of Palestine, approved on 29 November 1947 by the United Nations, according to which the territories of the Gaza Strip and the West Bank, including East Jerusalem, do not form part of Israeli territory. Moreover, pursuant to the Israeli-Palestinian Agreement, Israel and the PLO both view the West Bank and the Gaza Strip as a single territorial unit.
The AG proceeds by upholding that there is a general presumption that the customs authorities of the exporting State are in the best position to verify directly the facts which determine the origin of the products. Therefore, the importing State is, in principle, bound by the result of the subsequent verification by the exporting State. However, since, despite the abovementioned, none of the parties to this agreement is in the best position to give a unilateral interpretation of its territorial scope of application (taking into consideration Israel’s repeated insistence on the inclusion of settlement products under the agreement by declaring them as originating from inside Israel), the presumption does not apply in this case and the German authorities are not bound by the verification of origin carried out by the Israeli customs authorities.
The bottom line, according to AG Bot, is that preferential treatment under the EC-Israel Agreement cannot be applied to goods originating in the West Bank and, more generally, in the occupied territories. Meanwhile, the entitlement to preferential tariffs under the EC-PLO Agreement may be granted to goods manufactured in the occupied territories but only if the certificates of origin necessary are issued, in accordance with that agreement, by the Palestinian authorities.
Notably, the AG’s Opinion is not binding on the Court of Justice. It is the role of the AG to propose to the Court, in complete independence, a legal solution to the cases for which they are responsible. The Judges of the Court are now beginning their deliberations in this case and judgment will be given at a later date.
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In the same tone, it is useful to recall a research paper prepared at the School of Oriental and African Studies, University of London on ‘UK economic links with Israeli settlements in occupied Palestinian territory’, published February 2009. The report examines Israel’s relations with the UK and the EU, looks at the UK companies importing from Israeli settlements and other British business links with the occupied territories, all in light of the UK’s obligations in international law.