A stepladder of sanctions to stop Israel’s annexation of the West Bank

A lot of politicians have come round to the view recently that the only way to stop Israel annexing Area C of the West Bank is to impose sanctions.  Not before time!  But what sanctions would be the most effective? And what sanctions stand the best chance of being adopted by the Government?

Suspend the EU-Israel trade agreement

Suspending Israel’s privileged access to the EU market would stop the annexation and probably the occupation as well. The Israelis love being part of Europe even more than they love the settlements.

The EU is Israel’s biggest trading partner with more than a third of imports and exports. Israel is tiny by comparison with less than 1 per cent of the EU’s trade. So the EU’s negotiating position is very strong.

In fact it doesn’t need to negotiate. Article 1 of the EU-Israel Association Agreement gives the Israelis tariff-free or low-tariff access to the EU. Article 2 makes it conditional on “respect for human rights and democratic principles”. All they have to do is to invoke Article 2.

The only problem is that the EU needs the agreement of all 27 members to do this. And there’s always at least one country that will cast a veto.

The UK has now negotiated a post-Brexit UK-Israel Agreement[i] that reproduces the EU-Israel trade agreements as closely as possible and comes into force on January 1st. Even after we leave, we are still Israel’s 3rd biggest trading partner (after the rest of the EU and the US) and they are 42nd on our list of trading partners, so we also have a strong negotiating hand.

Recognise Palestine

Recognition may not have an immediate impact on the welfare of Palestinians in the refugee camps, but it would send a very strong signal to Israel and it has the added advantages that it costs nothing and is a decision that is entirely in the hands of the UK government. It’s also the measure that the Palestinians say would do the most good. When he was foreign secretary William Hague promised to recognise Palestine “at a time when it can best help bring about peace” and that time has surely come. If we recognise, France, Belgium, Spain, Ireland, Luxembourg, Slovenia and Italy might join us.

Ban settlement trade

The Government keeps telling us that Israeli settlements are illegal. Why, then, is it legal to sell settlement products in this country? There is no sensible answer to this question. The Irish Dail is currently considering a Bill to ban settlement products from Ireland. A similar move in the UK is supported by senior MPs from the LibDems and the SNP and by Labour’s shadow Middle East Minister Wayne David who has said it “would send out a clear message that such a blatant breach of international law is not without consequence”.

There are no official figures on settlement goods sold in the UK because Israel makes no distinction between Israel and West Bank, but the most recent estimate put EU imports from settlements at €229 million[ii] a year, equivalent to less than 2½ per cent of EU-Israel imports, so a ban on settlement products would not in itself be a heavy blow. But if it was broadened to include a ban on trade with the companies that trade in the settlements, especially the banks, it would very effective. The United Nations recently published a list of 112 companies that trade in settlements, including three based in the UK, JCB which sells bulldozers to the Israeli army, Opodo, who promote tourism in the settlements, and Greenkote, who have a factory in a settlement. Three major Israeli banks, Hapoalim, Leumi and Discount, saw their share prices nosedive on (sadly unfounded) rumours of an EU ban on banks that trade in settlements, revealing just how nervous this makes them.

End the zip code deal

Since 2000 Israel has benefited from zero or low tariffs to the EU. Settlements are not in Israel, so they don’t qualify. The Israeli government did not want to say publicly that settlements are not in Israel, so they did a deal with the EU whereby they would just provide zipcodes for Israel so national customs officials could check whether goods qualified for zero tariff at each port of entry.

The “Technical Arrangement” of 2004 led to a lot of attempted fraud.  In the first five years UK customs intercepted 597 consignments where preferential rates of duty had been claimed for goods originating from illegal settlements, according to UK Treasury figures. More up-to-date figures are not available, but enforcement by customs authorities is said to be “patchy”. Anecdotally, the postcode most often claimed by exports from settlements is the postcode of Tel Aviv airport.

The solution is to insist that settlement goods are accompanied, like most other goods, by an EUR1 Movement certificate stamped by the Customs and Excise Department of their country of origin, ie Palestine. If the Palestine Authority won’t stamp their forms, which they won’t, it’s because the goods are produced on stolen land using stolen water and often containing stolen natural resources.  A similar approach was adopted in Crimea where the annexationist government was told that Crimean goods could be exported only if they were stamped by the customs department of their country of origin, ie Ukraine.


When Russian troops annexed Crimea in February 2014, it took just 17 days for European leaders to impose travel bans and asset freezes on named Russian government officials. They followed up with other sanctions costing Russia $100 million a year and they were all justified on the basis of “differentiation” – ie you should refuse to treat the annexation as legitimate in any way.

In December 2018 the United Nations Security Council passed a resolution by 14 votes to nil (the UK drafted it and voted for it) describing Israeli settlements as “a flagrant violation” of international law and calling on all countries “to distinguish in their relevant dealings between the territory of the State of Israel and the territories occupied since 1967”.

This is the official policy of the UK Government. The European Council for Foreign Relations has spelt out some of the possible sanctions that could be imposed on settlers on the basis of a thorough implementation of this policy of differentiation:

  • Imposing asset freezes and travel bans against officials of Regional Settlement Councils in the West Bank and Israeli government officials involved in planning and implementing annexation measures.
  • Denying entry to the UK of Israeli citizens known to have engaged in or called for violent acts (including ‘Price Tag’ attacks) against Palestinians or suspected of human rights abuses.
  • Requiring tourism operators and educational publishers to follow regulations on consumer protection and advertising standards by not describing East Jerusalem or Bethlehem as in “Israel” and not describing Jerusalem as the sole “capital” of Israel.
  • Refusing to engage with Israeli ministries and government agencies located in occupied territory, such as Israel’s Ministry of Science and Technology, and Antiquities Authority.
  • Stipulating that Israeli settlers living in the occupied territory should access the same UK consular services as Palestinians, ie in East Jerusalem.

Stronger business guidelines

In 2014 the UK Government published some very weak guidance to UK firms that trade in settlements. This advises them that “we do not encourage” and “we do not offer support” to firms that trade with illegal settlements. UK Embassy support was no longer provided to help UK firms in the settlements. This advice could be made more effective with stronger words such as “discourage” (as in Scotland) and “disincentivise”. Former foreign secretary William Hague promised a policy of “incentives and disincentives” in 2012, so it’s a policy already in the UK’s armoury.  The Department of Business and the Foreign Office, who publish the guidance on the UK Trade & Industry website, could take a far more proactive role in advising UK firms and banks to stay out of the West Bank.


In 2009 the last Labour government introduced labelling guidelines to distinguish Israeli settlement products from Palestinian West Bank products. The former were to be labelled ‘Produce of the West Bank (Israeli settlement produce)’ and the latter ‘Produce of the West Bank (Palestinian produce)’. The agreement was voluntary and applied only to agricultural produce, but the supermarkets agreed to abide by it and successor governments have continued to apply it.

Many EU governments, such as Denmark and Belgium, and some countries outside the EU, such as South Africa, followed the UK example with labelling guidelines and in 2015 the EU issued its own guidelines on labelling agricultural products and cosmetics produced in settlements so that they could not be labelled as “Made in Israel”. A ruling by the European Court of Justice reaffirmed this in 2019.


Since 2009 the Co-operative Group has operated a Human Rights and Trade Policy, under which it withdraws trade from disputed or illegal territories such as Israeli settlements in the Palestinian Occupied Territories and the Moroccan settlements in Western Sahara. The Co-op says this does not constitute a boycott of Israeli businesses and it remains committed to sourcing produce from Israeli suppliers that do not source from the settlements. At least seven local authorities have voted to ban procurement from settlements and the TUC has supported this policy since 2009. The Government has tried to make public sector procurement or investment bans illegal, but was defeated in the Supreme Court. It is planning new legislation aimed at local authorities and pension funds.

A stepladder of measures

The task for MPs now is to hold the government’s feet to the fire until they agree on a course of action that will bring enough pressure to bear on the Israeli government. The most effective is likely to be not a single measure, but a stepladder of measures, starting with moderate steps, such as recognition or settlement trade, but with more radical steps held in reserve in case a greater degree of persuasion is needed. If the Israeli Government believes that the international community means business, then none of these measures will be needed, other than as a threat.

It has been Israel’s time-worn tactic they have used over decades, building illegal settlements little by little and especially when the world is distracted by some other crisis. They may do this again by annexing less territory than expected and hoping that is regarded as a victory.

The objective most be not just to stop the annexation. If that is all the international community asks for, then the Israeli Government will take that as tacit consent for the occupation and for the two annexations they have already carried out (East Jerusalem and the Golan Heights).  What we have do is exert enough pressure, not only to stop them going ahead with annexation but to lift the occupation and to reverse the earlier annexations and to give equal political rights to all.

[i] https://www.gov.uk/government/news/uk-and-israel-sign-trade-continuity-agreement

[ii] Trading Away Peace: How Europe helps sustain illegal Israeli settlements’, October 2012, available from: www.christianaid.org.uk/Images/Trading%20Away%20Peace%20October%202012_tcm15-63607.pdf


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