EU lists locations ineligible for customs exemptions

The EU has put Modiin-Maccabim Reut on its first-ever list of "settlements" as it clamps down on exporters' customs exemptions.

15 August 12 12:25, Globes correspondent

The EU has for the first time published on the Internet a list of locations which are over the Green Line (land in Israeli hands since the Six Day War in 1967), and therefore not eligible for customs exemptions for goods that are "Made in Israel." Under a longstanding EU notice, companies that exports goods from Israel to Europe must declare where the goods are manufactured, and if they are produced beyond the Green Line, they are not eligible for duty-free status under the 1995 EU-Israel Free Trade Agreement. However, because the EU has never previously published the actual list of "settlements" that are over the Green Line, EU importers have tended to assume goods were made in Israel by default. Now the EU is attempting to clamp down on the matter by leaving no room for uncertainty about the origin of goods.

The communities listed in the notice include Ariel, Barkan, Emmanuel, Givat Zeev, Itamar, Oranit, Shaarei Tikva, and Yitzhar in the West Bank, as well as Alonei Bashan, Ein Zivan, Katzrin, Marom Hagolan, Majdel Shams, and Neve Atid on the Golan Heights.

The EU list surprisingly includes Modiin and Maccabim-Reut, because they are built on what was no-man's land between 1949 and 1967. However, an EU spokesman told "Globes" that the list has the postcodes of those parts of Modiin and Maccabim-Reut that are over the Green Line, and only products manufactured in those few streets of Maccabim-Reut will be liable to customs.

The list also includes eastern Jerusalem.

Israel Export and International Cooperation Institute chairman Ramzi Gabbay told "Globes" that there were few exports from Modiin and Maccabim-Reut, but, "The government should make every effort to remove this from the agenda to prevent creating a precedent."

Adv. Gil Nadal, an expert in international trade law, warns that the new notice and list will harm the competitiveness of many Israeli exporters in Europe.

Israel's Ministry of Foreign Affairs said, "The EU ignores reality when it extends the domain of conflict to places and issues that do not belong there. As for the other locations mentioned in the EU list, the European approach, though not new, is not acceptable in Israel's view, and it is being addressed through ongoing diplomatic engagement."

The Ministry added, "Remarkably, by the unilateral publication of the locations on the internet, the EU has unacceptably cut off a negotiating process regarding this very issue. This action, conducted "ex abrupto", has therefore been the object of an official protest lodged by the Mission of Israel in Brussels to the EU."

Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2012

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