Friday, 25 October 2013

EU policy towards Israeli settlements in the occupied territories

Please find attached a short briefing paper on the EU policy towards Israeli settlements in the occupied territories, in particular the recent EU guidelines excluding the settlements from EU funding programmes.

The paper lays out nine key reasons why the EU guidelines must be fully implemented. This is especially important in the current negotiations between the EU and Israel on the EU research programme Horizon 2020. The EU must ensure that its programmes do not support activities in the illegal settlements, as happened in the past.

The briefing also identifies six follow-up measures that are necessary to apply the principles of the recent guidelines in other areas of EU and Member State relations with Israel.

The paper has been prepared in collaboration among several European NGOs including Caabu who all worked together on the Trading Away Peace report last year; the note should not be attributed to any single organisation.

We hope the information and arguments in the briefing will be useful. We would warmly welcome any feedback or questions.

Best regards,

Chris Doyle
Director

Caabu @caabu
Advancing Arab-British Relations
1 Gough Square, London, EC4A 3DE
Tel: +44 20 7832 1321 
Fax: +44 207832 1329
Mobile +44 7968 040281
Twitter: @doylech
Skype: caabu
www.caabu.org

Nine reasons for full implementation of the EU guidelines on the funding of Israeli entities
Introduction
In July 2013, the European Commission published guidelines excluding Israeli entities and activities in
the occupied territories from EU grants, prizes and loans.1
These guidelines are an essential measure to bring the EU’s financial support for Israeli entities in line
with its international law-based policy of non-recognition of Israeli sovereignty over the territories
occupied since 1967. The guidelines are the minimum necessary to ensure that no EU public money
benefits activities in Israel’s illegal settlements.
As such, the guidelines must be implemented fully and effectively in all areas involving EU financial
support for Israeli entities. Given that the guidelines represent the necessary minimum and already
contain significant exemptions, there is no room for further compromise on their implementation.
The first test for the implementation of the guidelines is the ongoing negotiation on the terms of Israel’s
participation in Horizon 2020, the new EU Framework Programme for Research and Innovation (2014-
2020). To ensure the inapplicability of Horizon 2020 to the occupied territories, Israel’s participation in
the programme must be conditioned on its explicit agreement to the provisions of the guidelines in
the currently negotiated EU-Israel Memorandum of Understanding (MoU) on Horizon 2020.
This briefing outlines nine key reasons why insisting on full implementation of the guidelines in the
context of Horizon 2020 as well as other programmes is essential.
In addition, to ensure coherence in the EU’s conduct of bilateral relations with Israel and to put the EU’s
non-recognition of Israeli sovereignty over the occupied territories into full effect, it is important that
the principles of the guidelines are applied in all other relevant areas of EU-Israel relations. Some of
these areas and follow-up measures are listed at the end of the briefing.
The guidelines and the follow-up measures must stay in place until an Israeli-Palestinian peace
agreement ends the occupation and establishes mutually recognised borders.
Nine reasons for full implementation
1. The guidelines are the minimum necessary to implement the EU’s long-standing policy of
non-recognition of Israeli sovereignty over the occupied territories.
In line with the rest of the international community, the EU does not recognise Israeli sovereignty over any
of the territories occupied since 1967, namely the Golan Heights, the West Bank including East Jerusalem,
1 ‘Guidelines on the eligibility of Israeli entities and their activities in the territories occupied by Israel since June 1967 for
grants, prizes and financial instruments funded by the EU from 2014 onwards’, Official Journal of the European Union,
19/07/2013, (2013/C 205/05).
and the Gaza Strip. Israeli settlements in the occupied territories are illegal under international law and
cannot be considered part of Israel’s territory, irrespective of their legal status under domestic Israeli
law. The EU has made it clear it will only recognise changes to the pre-1967 borders as part of a mutually
agreed peace agreement between Israel and the Palestinians. The guidelines belatedly bring the EU’s
financial support for Israeli entities and activities into line with this policy.
2. The guidelines are the minimum necessary to meet the EU’s obligations under
international law.
Third parties including the EU have an obligation not to recognise, aid or assist serious breaches of
international law, as well as the duty to effectively oppose them.2 The EU’s own law obliges it to conduct
bilateral relations with third countries in conformity with international law. By permitting its funds to
support activities in the settlements, the EU has been failing to meet these obligations; full
implementation of the guidelines is necessary to ensure EU legal compliance.
3. The guidelines implement the commitment that EU member states made during the
Foreign Affairs Council of December 2012.
The FAC conclusions of 10 December 2012 state: “the European Union expresses its commitment to
ensure that – in line with international law – all agreements between the State of Israel and the
European Union must unequivocally and explicitly indicate their inapplicability to the territories
occupied by Israel in 1967”. This commitment, as well as the guidelines themselves, was adopted to
close the loopholes left by the lack of clarity in past EU-Israel agreements which allowed Israel to extend
their application to the settlements. It is essential that the EU-Israel MoU on Israel’s participation in
Horizon 2020 includes explicit and unequivocal territorial provisions effectively preventing any form of
EU support to settlement-based entities or activities.
4. The guidelines are the minimum necessary to ensure that no EU tax-payer money benefits
settlement activities.
The guidelines require the Israeli applicants to submit a declaration of honour that the project will be
carried out in accordance with the guidelines, i.e. within the pre-1967 borders. This gives the
Commission the tool to stop a project and recover funds if it is later revealed that funded activities are
taking place in the occupied territories. Without obtaining such declarations, the EU would not be able
to prevent its taxpayers' money from being used to support activities carried out in settlements, as
happened in the past. A case in point is the cosmetics company Ahava Dead Sea Laboratories, which has
a factory in the settlement of Mitzpe Shalem, but has a head office address in Israel. Ahava has received
over EUR 1.1 million in funding under the FP7 programme in 2007-2013 (the predecessor of Horizon
2020), and was awarded a new grant as recently as July 2013 even though its activities in the occupied
territories have been known for years. According to the Commission, since Ahava’s head office was
within Israel proper, nothing could have been done under the FP7 framework to withhold funds from its
activities in the settlements. 3
2 ICJ Advisory Opinion of 9 July 2004, ‘Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory’,
para.163(3)(D); see also ‘Rule 144: Ensuring Respect for International Humanitarian Law Erga Omnes’, in ICRC, ‘Customary
International Humanitarian Law’, 2005, http://www.icrc.org/customary-ihl/eng/docs/v1_rul_rule144
3 See answer by Ms Geoghegan-Quinn on behalf of the Commission to European Parliamentary Question by David Martin, E-
007505/2012 of 27 July 2012, 18 September 2012: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2012-
007505&language=EN
5. The guidelines already contain significant exemptions.
The guidelines are already carefully drafted to ensure there is nothing excessive beyond the minimum
necessary requirements. The guidelines do not apply to Israeli natural persons based in or carrying out
activities in the occupied territories. They also do not apply to Israeli ministries and government agencies
located in the occupied territories (but do apply to the activities carried out by them). Given these builtin
exemptions, there is no room for further compromise on the implementation of the guidelines.
6. The guidelines are in line with long-standing US-Israeli and German-Israeli precedents.
The United States-Israel Binational Science Foundation was set up in 1972 and the German-Israeli
Foundation for Scientific Research and Development in 1986. In both agreements establishing these
foundations, the Israeli government explicitly accepted the exclusion of the areas that came under its
administration after June 1967.4 The criteria of the US-Israel foundation go even further than the EU
guidelines in stating that projects “may not relate to subjects primarily pertinent to such areas”. While
the EU’s eligibility criteria for projects are limited to the place of their implementation, the US-Israel
agreement also looks at their final aim and effect. The 40-year old US-Israeli precedent demonstrates
that the EU guidelines are overdue and in fact relatively limited in their scope.
7. Israel stands to gain incomparably more from Horizon 2020 than it loses from the
exclusion of activities in the occupied territories.
Israel’s earlier threats not to sign the MoU for Horizon 2020 do not appear credible. The EU is the
second-largest source of funding for basic scientific research in Israel (after the Israel Science
Foundation). The country is expected to receive an estimated one billion euros from Horizon 2020 in the
next seven years in return for its expected contribution of 600 million euros.5 Even more important than
the direct financial benefits is access to the cross-border scientific cooperation and knowledge exchange
that is essential for the Israel’s competitiveness and innovation. A number of representatives of the
Israeli scientific community have appealed to their government to ensure continued research
cooperation with the EU. In contrast, the loss to Israel due to the exclusion of entities active in the
occupied territories from Horizon 2020 is small. According to one estimate, about 0.3% of the funds for
Israel under the FP7 programme went to entities based or active in Israeli settlements.6
8. The guidelines have had a positive impact on peace negotiations and may constitute an
incentive for their successful completion.
According to media reports, both Israeli and US officials privately said that the publication of EU guidelines in
July 2013 created greater flexibility on both the Israeli and Palestinian sides, helping Secretary of State Kerry
succeed in his mission to resume the peace talks.7 The failure of the EU to insist on full implementation of
the guidelines would undercut the position of the Palestinian Authority, for whom the guidelines were an
important guarantee to enter the peace talks. On the Israeli side, it would confirm that there is no need to
fear consequences for its continued occupation and settlement expansion. On the other hand, by insisting
on full implementation of the guidelines, the EU will signal to Israel that further such EU measures are
inevitable until an Israeli-Palestinian peace agreement establishes mutually recognised borders.
4 See: ‘Eligibility’, US-Israel Binational Science Foundation,
http://www.bsf.org.il/bsfpublic/DefaultPage1.aspx?PageId=221&innerTextID=221; ‘Eligibility of Institutions’, German-Israeli
Foundation for Scientific Research and Development, http://www.gif.org.il/pages/applicants/eligibility-of-institutions.aspx;
5 ‘EU’s Scientific ties with Israel under threat’, Neth-ER, 13 August 2013, http://goo.gl/GE7jhE
6 ‘EU-Israel talks fail to agree on science funding’, EU Observer, 19 September 2013, http://euobserver.com/foreign/121424
7 ‘EU made Netanyahu go the extra mile, U.S. threats left Abbas with no choice’, Haaretz, 21 July 2013, http://goo.gl/Q7adyx
9. A failure of the EU to fully implement the guidelines would undermine its credibility.
With the publication of the guidelines, the EU has re-established its position as a credible international
actor which conducts its external relations in line with international law and which can exercise a
meaningful and positive influence on the Middle East Peace Process. Any compromise which would
water down the application of the guidelines under Horizon 2020 or any future agreement or
cooperation instrument would be detrimental to the credibility of the EU as an international actor.
Applying the principles of the guidelines to other areas of EU-Israel relations
To ensure coherence in the EU’s and Member States’ conduct of bilateral relations with Israel and to put
the EU’s non-recognition of Israeli sovereignty over the occupied territories into full effect, the same
principles must be applied in all other relevant areas of EU-Israel relations. These include:
· Member States’ bilateral agreements and cooperation programmes with Israel
Following the EU, individual Member States must also ensure that their agreements and cooperation
instruments involving Israel cannot be applied to the occupied territories.
· EU’s bilateral agreements with Israel
Beyond the funding guidelines, the EU must take the necessary steps to ensure the inapplicability of all
EU-Israel agreements to the occupied territories in line with the commitment of the Foreign Affairs
Council of December 2012.
· Correct labelling of settlement products
In line with the existing consumer protection legislation, the EU must issue guidelines to ensure all
settlement products sold in the EU market are correctly labelled so that consumers can distinguish
between products of Israel, Palestinian products, and products of illegal Israeli settlements.
· Procurement of goods and services
As procurement by EU and Member State bodies of goods and services from Israeli entities in the
occupied territories is not covered by the current guidelines, the EU must work out a separate
arrangement applying the principle of non-recognition also to this area.
· Non-preferential treatment of settlement products
Currently, under the EU’s ‘technical arrangement’ on preferential treatment of Israeli imports, the onus
is on the European side to distinguish settlement products and ensure their exclusion from preferential
treatment. In line with the principles of the EU funding guidelines, the EU must insist that the onus is on
the Israeli side to apply the distinction and correctly designate the origin of goods.
· OECD treatment of Israeli statistical data
European governments and other OECD members must insist that Israel disaggregates statistical data
from Israel and from the occupied territories. This was required from Israel during its accession to the
OECD but has not been implemented.
For any inquires or feedback on this briefing, please contact: a.bertrand@aprodev.net;
Deborah.Casalin@broederlijkdelen.be.