In a landmark verdict, the European Court of Justice ruled on Thursday, February 25, that goods produced in Jewish settlements cannot benefit from EU trade privileges because the West Bank is an occupied Palestinian territory.
"Products originating in the West Bank do not fall within the territorial scope of the EU-Israel agreement and do not therefore qualify for preferential treatment under that agreement," the Luxembourg-based court said in a statement cited by Agence France-Presse (AFP).
The EU has signed a deal which allows Israeli industrial products to be imported to Europe without customs duties.
"The European Union takes the view that products obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under that agreement," ruled the court.
"The (EU)-Israel agreement applies to the territory of the state of Israel, whereas the (EU-Palestine) agreement applies to the territory of the West Bank and the Gaza Strip."
Israel occupied the West Bank, the Gaza Strip and Al-Quds (occupied East Jerusalem) after the 1967 war.
It withdrew from the Gaza Strip in 2000 but continues to occupy the West Bank and the holy city of Al-Quds.
Some 280,000 Jewish settlers live in more than 120 settlements scattered across the occupied West Bank.
The international community considers all Jewish settlements on the occupied Palestinian land illegal.
Under the internationally-backed roadmap, Israel must freeze all settlement activities and dismantle 22 outposts constructed after March 2001.
Israel was not surprised by the European ruling, the first of its kind.
A source in the Israeli Foreign Ministry told Army Radio that the ruling "surprised no one."
He claimed the verdict was part of what he called "the European political campaign against the settlements."
The Palestinians welcomed the European verdict.
President Mahmoud Abbas urged Europe not to invest in the settlements and to boycott products made in Israeli settlements.
Many pro-Palestinian groups regularly protest in European supermarkets to complain about Israeli labels on products from the occupied West Bank.
The British government has promised to advise supermarkets on how to differentiate between goods produced in settlement and those produced inside Israel.
The Israel Manufacturers Association reported in 2009 a drop in demand due to boycotts, mostly from Britain and Scandinavian countries.
The Palestinian Authority launched late last year a new boycott campaign of all goods produced in Israeli settlements.
Prime Minister Salam Fayyad launched the campaign into the limelight last month with the public burning of $1 million in products made in Israeli settlements and confiscation of them from the shelves of Palestinian shops.
An 80-member monitoring team now roams West Bank cities and villages, looking for goods to confiscate.
(IslamOnline.net and Agencies)