EU changes rules to allow trade with Israeli settlements

The top lawyer A European Union foreign service official told the ministry's top official that a new opinion from judges in The Hague does not require EU states to ban imports of goods from Israeli settlements, according to a leaked analysis.

Legal experts said the analysis contradicts the International Court of Justice (ICJ) ruling that states should end all support for Israel's occupation of Palestine, including the West Bank and Gaza Strip.

In a seven-page memo, Frank Hoffmeister, the head of the legal department of the EU's foreign service, argued that while European law requires the labeling of settlement products, a ban on their import and sale was still up for debate.

“EU law requires labeling indicating that food comes from the West Bank and settlements,” Hoffmeister’s analysis says. “It is a matter of further political consideration whether the EU’s policy towards importing goods from the settlements should be reconsidered.”

The legal advice, reproduced in full below, was sent to EU foreign policy chief Josep Borrell on July 22, three days after the ICJ ruled that states must not “aid or assist in the maintenance” of Israel’s illegal occupation.

“The EU is neglecting its responsibility to uphold international law.”

Francesca Albanese, United Nations special rapporteur on the situation of human rights in the Palestinian territories occupied since 1967, told The Intercept that the EU's stance on the ICJ opinion is “legally flawed, politically harmful and morally compromised.”

“The EU is neglecting its responsibility to uphold international law,” she said. “This bending of the rules for political reasons undermines the credibility of the EU’s foreign policy and betrays the trust of people outside Palestine.”

“The EU’s approach also sets a dangerous precedent by treating its obligations under the ICJ advisory opinion as optional, particularly in light of ongoing atrocities,” Albanese said. “This implies that compliance with international law is discretionary and undermines trust in the international legal system.”

Daniel Levy, a former Israeli peace negotiator and president of the US/Middle East Project, joined the criticism, describing Hoffmeister's advice as “a very wrong and easily refuted interpretation.”

Pete Stano, senior spokesman for foreign affairs and security at the European Commission, said in a statement to The Intercept: “As a policy, we do not comment on leaks of alleged internal documents.”

International law scholars told The Intercept that Hoffmeister's analysis is wrong: For products that came from Israel's illegal settlements, specific labeling does not meet the International Court of Justice's requirement not to recognize the Israeli occupation.

“The ICJ has made it clear that 'all aid and support' from all states for the settlement project must be stopped. “In my assessment, this requires a revision of EU policy to end any trade, financing or other support that in any way supports the Israeli occupation,” said Susan Akram, director of the International Human Rights Clinic at Boston University School of Law. “The current policy is not in line with the opinion of the International Court of Justice and, as the EU statement states, this is not a matter for further political consideration as to whether EU policy should be reconsidered.”

Akram said the analysis incorrectly equated the International Court of Justice's call not to recognize the occupation with the EU's policy of working “with international partners to revive a political process” for a two-state solution.

“This is not what the court asked for,” she said. “It has been determined that the entire occupation is illegal and must be ended as soon as possible. This does not depend on negotiations, whether on a two-state solution or any other.”

Hoffmeister's analysis also warned the EU to expect “further litigation in national courts related to arms sales or other forms of support to Israel.”

Billions in European investments

The International Court of Justice is the world's highest judicial body for hearing disputes between states. Although its opinions are not binding, they have “great legal weight and moral authority” and are considered the gold standard in international law. In September, the United Nations General Assembly responded to the International Court of Justice ruling by saying Israel should end its 57-year occupation within 12 months.

Hoffmeister, the author of the EU legal note, is also the Brussels-based director of the foreign and security policy working group of the liberal Free Democratic Party of Germany, which is a strong supporter of Israel's war in Gaza. The FDP, for which Hoffmeister was previously deputy leader in Brussels, has called for EU and German payments to be frozen to Palestinian institutions and programs until a special audit ensures that no money is used “to finance Islamist terror.”

For more than 100 years, European countries have played a central role in supporting Jewish settlements in the areas between the Mediterranean and the Jordan River. Since Israel's creation in 1948 and its conquest of the occupied territories in 1967, their trade and political support have consolidated Israeli control over the territory.

Between 2020 and August 2023, European investors provided an estimated $164.2 billion in loans and guarantees to companies “actively” involved in Israeli settlements – and held $144.7 billion in stocks and bonds of the same companies, according to an estimate by a coalition of groups against European settlement investments.

Most of the world considers Israeli civilian settlements in the occupied territories to be illegal under international law. But today the settlement project seems to be accelerating: new outposts are being built in the West Bank and planned in the Gaza Strip.

The dissonance of these moves against the backdrop of what some are calling “the first live-streamed genocide” has led countries such as Ireland to revive a proposed law banning trade with Israeli settlements, which was abandoned amid fears it would violate EU rules had been put on hold.

In a letter published on Tuesday about progress in implementing the law, Ireland's deputy prime minister warned that if the EU does not act, independent nations could move to ban trade in line with the International Court of Justice.

“Trade is an exclusive competence of the EU and therefore the government’s focus has been on action at EU level,” wrote Tánaiste Micheál Martin, who is also Ireland’s foreign minister. “I have repeatedly called on the EU to comprehensively review EU-Israel relations in the light of the report. “The Attorney General has made it clear that if this is not possible, there are grounds in EU law that allow states to take action at national level.”

The Norwegian government also recommended on October 17 that its companies avoid trade that strengthens Israel's presence in the occupied territories.

On the same day, a cross-party group of 30 members of the European Parliament sent a written question to the European Commission asking whether it would now “fulfill its obligations under international law and urgently ban all trade with the illegal Israeli settlements” following the ICJ ruling.

“The EU risks being held liable for supporting an apartheid regime and its heinous crimes.”

Hoffmeister himself last year called on states to abide by the International Court of Justice's rulings and deplored Russia's failure to do so in Ukraine.

However, when it came to Gaza and the West Bank, his advice was that the bloc was already “consistent” with its duty not to recognize the legality of the occupation, leaving the issue of Israeli settlements to the two-state peace process.

According to Akram, a law professor at Boston University, this also contradicts the International Court of Justice's demand that all settlers be immediately removed from the occupied territories. “There is no discretion for states to allow this issue to be negotiated,” she said.

Albanese, the U.N. special rapporteur, said the EU's self-image as a mediator in Palestine had been tarnished by its reluctance to comment on Israeli violations of international law.

“By resorting to escamotry and flouting universal rules to maintain trade with these settlements and Israel as a whole at a time of unspeakable atrocities, the EU risks being held liable for supporting an apartheid regime and its heinous crimes,” she said . “This suggests that Palestinian rights are secondary to Europe’s economic interests, which would further damage the EU’s already compromised credibility among Palestinians and other peoples in the Global South.”

July 22, 2024, European Union legal analysis of the International Court of Justice ruling (transcription)

The Intercept publishes a reproduction of the legal analysis memo below, with some of the administrative notes removed.

EUROPEAN EXTERNAL ACTION SERVICE

The Director

SG. LD
Legal Department

Brussels, 22 July 2024

NOTE FOR THE ATTENTION OF JOSEP BORRELL FONTELLES HIGH REPRESENTATIVE

Subject: The ICJ Advisory Opinion of 19 July 2024 in respect of the Occupied Palestinian Territory

I. Introduction

On 19 July 2024, the International Court of Justice (“the Court”) delivered its Advisory Opinion in respect of the “Legal Consequences arising from the Policies and Practices of Israel in the Occupied Palestinian Territory, including East Jerusalem”. It replied to two questions, which the General Assembly had submitted to it on 30 December 2022:

(a) “What are the legal consequences arising from the ongoing violation by Israel of the right of the Palestinian people to self-determination, from its prolonged occupation, settlement and annexation of the Palestinian territory occupied since 1967, including measures aimed at altering the demographic composition, character and status of the Holy City of Jerusalem, and from its adoption of related discriminatory legislation and measures?

(b) How do the policies and practices of Israel […] affect the legal status of the occupation, and what are the legal consequences that arise for all States and the United Nations from this status?”

The present note briefly presents the Advisory Opinion (“the Opinion”) (II), provides a few observations on its possible legal implications (III) and suggests a conclusion (IV). The detailed reasoning of the Court is summarised in Annex 1. Annex 2 contains a summary of EU positions which were shared with Member States when preparing their national submissions to the Court.

II. The Opinion

In the proceedings, over fifty States and three international organisations submitted observations. From the EU, only a third of Member States engaged in the process.

After having affirmed its jurisdiction and underlined there is no compelling reason why it should not answer the questions posed by the UNGA, the Court clarifies that Israel has duties as an occupying power in the West Bank and East Jerusalem. Such duties also exist vis-à-vis Gaza, even after the withdrawal of its military presence, commensurate to the remaining ability of Israel to exercise effective control there (control of airspace, access by land, delivery of certain basic services).

Importantly, the Court then stresses that occupation is temporary in nature. Even prolonged occupation does not give title to sovereignty over the occupied territory. Applying the applicable standards of international humanitarian law, as complemented by human rights obligations that apply also for Israeli conduct beyond its national borders, the Court then scrutinizes Israeli policies and practices. The Court is convinced that Israeli settlements are meant to be permanent and quotes numerous indicators in that direction. It also stresses the duty not to annex territory, the prohibition to apply discriminatory legislation and the right to self-determination of the Palestinian people. Significantly, the Court considers that a broad array of legislation adopted and measures taken by Israel in its capacity as an occupying Power constitutes a breach of Article 3 of the UN Convention on the Elimination of Racial Discrimination (CERD), which prohibits racial segregation and apartheid.

In the most important part of the opinion, the Court analyses the “effects” of the Israeli policies on the legality of the occupation and on the obligations of other States and international organisation. In the view of the Court, the sustained abuse by Israel of its position as an occupying Power, through annexation and an assertion of permanent control over the Occupied Palestinian Territory and continued frustration of the right of the Palestinian people to self-determination, violates fundamental principles of international law. On this basis, the Court comes to the following substantive operational conclusions:

(3) The State of Israel’s continued presence in the Occupied Palestinian Territory is unlawful;

(4) The State of Israel is under an obligation to bring to an end its unlawful presence in the Occupied Palestinian Territory as rapidly as possible;

(5) The State of Israel is under an obligation to cease immediately all new settlement activities, and to evacuate all settlers from the Occupied Palestinian Territory;

(6) The State of Israel has the obligation to make reparation for the damage caused to all the natural or legal persons concerned in the Occupied Palestinian Territory;

(7) All States are under an obligation not to recognise as legal the situation arising from the unlawful presence of the State of Israel in the Occupied Palestinian Territory and not to render aid or assistance in maintaining the situation created by the continued presence of the State of Israel in the Occupied Palestinian Territory;

(8) International organisations, including the United Nations, are under an obligation not to recognize as legal the situation arising from the unlawful presence of the State of Israel in the Occupied Palestinian Territory;

(9) The United Nations, and especially the General Assembly, which requested this opinion, and the Security Council, should consider the precise modalities and further action required to bring to an end as rapidly as possible the unlawful presence of the State of Israel in the Occupied Palestinian Territory.

III. Legal significance and implications

1. The legal status of advisory opinions

Advisory Opinions of the International Court of Justice are not legally binding. Nevertheless, they carry great significance and legal authority, because the Court interprets binding principles of international law, such as the right to self-determination and the duties of occupying States. Therefore, even if formally non-binding, the Advisory Opinion clarifies Israel’s obligations under international law as regards the Occupied Palestinian Territory and the related obligations of other States and international organisations, including the EU.

Israel did not participate in the proceedings. It only submitted a brief written statement arguing that it has not given consent to judicial settlement of its dispute with Palestine, and that the Opinion would force such a settlement without Israel’s consent. The Court, however, rejected this argument when examining potential reasons why it should render an Advisory Opinion. It found that Advisory Opinions do not constitute a judicial settlement of bilateral disputes, but rather clarify international law principles beyond the question of Israel and Palestine, in particular the duty of non-recognition for States and international organizations.

2. The legal implications of the operative parts

a) The illegality of prolonged occupation and the duty to end it (OP 3 and OP 4)

The Opinion was adopted with a large majority, with operative articles on settlements and reparations adopted by 14 to 1 votes, while the operative articles stating that occupation is unlawful and must be brought to an end were adopted by a majority of 11 to 4 votes. Next to Vice-President Sebutinde (who generally thought that the Court should not have expressed itself on the questions), Judges Abraham, Tomka and Aurescu voted against this point.

This divide in the bench (and the absence of a common EU position on this point) shows that this proposition was not clear-cut. However, for the majority, the key point was that Israeli settlement activity went beyond the rights of an occupying power to temporarily govern the territory under its effective control. It sends a strong signal against annexation of territory by force, even if “sliced” over time, and even if practiced by “private” settlers who received ex-post authorisation and support by the State for their illegal activities.

The position adopted by the Court is broadly in line with the key demands expressed by the State of Palestine, the League of Arab States and the Organisation of Islamic Conference, with the notable exception of the “right of return” of all Palestinian refugees to their original places of residence.2 The Opinion requires that “all Palestinians displaced during the occupation” be able to return to their original place of residence”, with the preceding sentence mandating the return of seized land “since [Israel’s] occupation started in 1967” (§ 270). The Advisory Opinion thus appears to endorse the “two-State” approach as regards residence rights, with the “Green line” as the demarcating border between them. It does not analyse the situation and potential rights of Palestinians who became refugees before 1967.

Another contentious issue relates to the Court’s treatment of Article 3 of the Convention on the Elimination of Racial Discrimination (CERD) on the prohibition racial segregation and apartheid. While the Court was unanimous that “Israel’s legislation and measures constitute a breach of Article 3 CERD” (§ 229), it did not specify on the basis of which of the two elements contained in this provision (racial segregation or apartheid) it comes to this conclusion. While President Salam (§§ 14-32) and Judge Tladi (§ 36) qualified Israeli practices as “tantamount to apartheid” or having the “character of apartheid” in their respective individual declarations, Judges Iwasawa (§ 13) and Nolte (§ 8) argue that the Court did not make such a finding.

b) The Israeli duty to evacuate the settlers and make reparation (OP 5 and OP 6)

Probably the most far-reaching conclusion relates to the obligation of Israel “to cease immediately all new settlement activities” and to “evacuate all settlers from the Occupied Palestinian Territory” (OP 5). The duty to evacuate concerns 465,000 residents of the West Bank and some 230,000 residents of East Jerusalem. At the same time, the opinion contains a nuance on the timing. While the implementation of the most urgent requirement, i.e. ceasing new construction of settlements, must be done “immediately”, “bringing to an end” of the “unlawful presence” must only be brought about “as rapidly as possible” (OP 4). This could be read together with OP 9, according to which the UNGA and the UNSG should consider “precise modalities and further action” to bring an end to the unlawful presence of the State of Israel in the Occupied Palestinian Territory. In the Chagos case (where the UK was requested, in an Advisory Opinion, to respect that the Chagos Islands are part of Mauritius), the UNGA adopted, only three months later, Resolution 73/295, in which it interpreted the wording “as rapidly as possible” as “no more than six months from the adoption of the present resolution”.

As regards the duty of reparation for the damage caused to all persons concerned (OP 6), the question will arise how to organize the claims and their satisfaction (establishment of an International Claims Commission?). Due to the inherent complexity of this point, it would be wise to include this point in the “precise modalities” to be agreed by the UNGA and the UNSC under OP 9.

c) The obligation of non-recognition of States and international organisations (OP 7 and OP 8)

In OP 7 and OP 8 the Court stresses the obligation “not to recognise as legal the situation arising from the unlawful presence of the State of Israel in the Occupied Palestinian Territory”. This obligation of non-recognition is bearing on both States and international organisations, which include the European Union.

The EU has a long standing policy of not recognising any changes to 1967 lines between Israel and the West Bank. It has also committed to work within the UN toward an equitable two-State solution to the conflict, implying the establishment of a Palestinian State and therefore the end of Israeli occupation of the Occupied Palestinian Territory. The precise position of the EU on recognition (July 2014) was as follows:

“An agreement on the borders of the two states, based on 4 June 1967 lines with equivalent land swaps as may be agreed between the parties. The EU will recognize changes to the pre-1967 borders, including with regard to Jerusalem, only when agreed by the parties.”

In its most recent conclusions of 27 June 2024, the European Council invited the Council to take work forward on further restrictive measures against extremist settlers in the West Bank and condemned the Israeli government’s decisions to further expand illegal settlements across the occupied West Bank and urged Israel to reverse these decisions. It reiterated its unwavering commitment to “lasting and sustainable peace in accordance with the relevant resolutions of the UN Security Council, on the basis of the two-state solution, with the State of Israel and an independent, democratic, contiguous, sovereign and viable State of Palestine living side-by-side in peace, security and mutual recognition”. It also committed the EU to “continue to work with international partners towards reviving a political process to this end” and noted “that a credible pathway to Palestinian statehood is a crucial component of that political process”.

Agreed EU policy is therefore in line with the obligations under international law as interpreted by the Court as regards other States and international organisations in points (7) and (8) of the operative parts of the Opinion. The envisaged measures against extremist settlers will further align EU policy with the Opinion.

Another question concerns trade relations with the occupied territories. Here the Court emphasises the duty of distinguishing dealings with Israel between its own territory and the Occupied Palestinian Territory (§ 278). For the Court it encompasses the obligation to abstain from treaty relations with Israel in all cases in which it purports to act on behalf of the Occupied Palestinian Territory or a part thereof on matters concerning the Occupied Palestinian Territory or a part of its territory. This view is already followed by the EU, as the Court of Justice of the European Union has delineated the territorial scope of application of the EU-Israel and the EU-PLO Agreements in line with this principle. More difficult to discern is the duty to “to abstain from entering into economic or trade dealings with Israel concerning the Occupied Palestinian Territory or parts thereof which may entrench its unlawful presence in the territory” and to “take steps to prevent trade or investment relations that assist in the maintenance of the illegal situation created by Israel in the Occupied Palestinian Territory” (§ 278). In this respect, EU law requires labelling indicating that foodstuffs originate in the West Bank and settlements. It is a matter of political appreciation of whether further measures are needed in this respect.

Among other legal consequences, the Opinion might encourage further litigation before national courts in relation to arms sales or other form of assistance to Israel, based on the argument that this is used to maintain the situation created by the continued presence of the State of Israel in the Occupied Palestinian Territories. The Opinion might also exacerbate the already existing boycotts and citizens petitions for a total ban on trade with products originating in the settlements.

IV. Conclusion

In view of the elements above, the Legal Department considers that

1. The Advisory Opinion clarifies international obligations binding on Israel as occupying power of the Occupied Palestinian Territory; the fact that the opinion itself is advisory in nature does not change the nature of Israel’s legal obligations.

2. The illegality per se of the prolonged occupation constitutes a new element in the legal analysis of Israel’s presence in the Occupied Palestinian Territory.

3. The duty to end settlement activities and to evacuate a significant number of settlers needs to be taken into account in any future peace initiative.

4. The long-standing position of the European Union on the illegality of settlements beyond the Green Line is in conformity with the duty of international organizations not to recognize as legal the situation arising from the unlawful presence of the State of Israel in the Occupied Palestinian Territory. It is matter of further political appreciation whether to revisit the EU’s policy vis-à-vis the import of goods from the settlements.

5. Given that the final operative article (9) of the Advisory Opinion stresses a particular role of both the UN General Assembly and the UN Security Council in defining the precise modalities how to bring an end to the illegal occupation, any future EU initiatives should take their findings into account.

e-signed
Frank Hoffmeister