EU Labelling of Israeli Settlement Products: Finding Nuance Amongst Complexities

Natasha Spreadborough - A look at the new European Union guidelines on products made in the West Bank and Golan Heights, what they entail, and the questions they raise at the political economy of Israel and Palestine.

Back in November 2015, the European Union issued a series of guidelines as to how products made in the West Bank and Golan Heights should be labelled, according to the origin of their producer. Products made in Israeli settlements will be identified as such, whereas Palestinian products will be described as "products from the West Bank (Palestinian product)" or "product of Gaza" or "product of Palestine". These new regulations are not part of any new legislation, but according to the EU, an attempt to clarify their position on Israel's presence in the West Bank and the Golan Heights in accordance with international law.

The EU instatement of labels on Israeli products made in the West Bank and Golan Heights illustrates the complexity of the political economy of the occupation, and the intertwining of the Israeli and Palestinian economies. Whilst seeking to provide clarity as to Israeli products produced in occupied territories, the labelling system's simplicities clash with the reality of Israeli enterprises that operate in the territories. At the same time, the implication of boycott raised runs into problems with the dependence of Palestinians on both legal and illegal employment in settlements. This article seeks to explore and discuss the nuances of one aspect of the political economy of Israel and Palestine.


The labelling seeks to notify EU consumers which products made in the West Bank or Golan Heights come from Israeli companies, as the EU considers these territories occupied under international law. The EU presented these new regulations as a clarification in alignment with its official position regarding the legality of Israel’s presence in the West Bank and the Golan Heights. Whilst presented by the EU primarily as a legal technicality,  and more privately indicated to be a diplomatic move, it also implicitly allows consumers the choice of boycotting products made in disputed territory by the occupying power. In this way, though seeking to bring clarification, the EU’s labelling has over-simplified the economics surrounding Israeli companies that operate in the Golan and the Palestinian territories. This discussion is not intended as an advocate either for or against boycotts, of any kind, but instead an attempt to highlight some complexities surrounding the political economy of the Israel-Palestine conflict.

For starters, the legal and political issues surrounding the Golan Heights, captured in 1967 during the Six Day War1 , and the West Bank, not annexed but considered occupied territory, are vastly different. But for the purposes of this discussion I will focus on the West Bank, as that is where the implications of boycotts really come into play.

Let’s break it down. The West Bank products will now be marked separately according to whether they emerge from an Israeli or Palestinian factory. The issue here is that the Israel has used land that, according to international law, is not theirs to use, to produce their products. The EU’s stance aligns with this interpretation of international law, and considers Israeli settlements in the West Bank illegal, and a barrier to the peace process. The EU therefore views these guidelines as a technical clarification.2 It does also explain, however, that there has been “a demand for clarity from consumers, economic operators and national authorities” about the EU’s position with regards to the origins of settlement products, and that the new labelling is therefore partly in response.3 So the EU’s new guidelines have a second implication with regards to the potential for consumer boycotts.


First let's address the labels themselves. They've been in the pipeline for several years, facing stiff opposition from Israeli diplomats and government officials. They come after three years of administrative work and discussions, during which time the EU repeatedly warned Israel of the consequences of further settlement construction.4 Two years ago, their publication was delayed at the behest of the US, in the middle of nine-month long negotiations between Israel and the Palestinians.5 We can infer, then, that the guidelines are more than a helpful clarification, rather they constitute a punitive reaction to perceived Israeli resistance to the peace process. This is strengthened by the lack of information from EU diplomats surrounding the guidelines on what sort of positive action the EU expects Israel to take, such as deconstructing settlements, or what exactly the EU would expect Israel to do in order to stop the labelling process.

The labelling tactic does not emerge from a void. The EU has previously used similar measures that have sought to clarify the origins of imports from the disputed territory. Since 2003 the EU has used numerical codes on Israeli imports that allow customs to distinguish between products made within the Green line, and those beyond it. Back in 2012, the UK adopted its own guidelines for labelling settlement products.


Evidently these labels and their consequences do not exist in a vacuum, and imply the possibility of boycotting these products made in factories on illegal land. The EU Fact Sheet accompanying the guidelines explicitly states they “give consumers the possibility to make an informed choice”.6 This is a separate, but related issue, stemming from the use of Boycott Divestment Sanctions (BDS) as a form of non-violent resistance against the occupation. From a BDS point of view, by purchasing products made in these factories consumers enable them to profit and make it worthwhile to continue production, thus perpetuating the Israeli settlement of occupied territories, and the problems for Palestinians that ensue (inability to access land, closure of roads, increased army presence etc).

Crossing Borders

It is here that labelling reveals the complexities of the economics surrounding the occupation. Where the aim is to identify and boycott Israeli products clearly made from factories in occupied land, companies that hold factories and manufacture various parts of their products on both sides of the Green Line throw complications. Take Ahava, a brand that has come under heavy fire by the BDS movement for operating its main manufacturing facility just beyond the Green Line, in the small settlement of Kibbutz Mitzpe Shalem. The company maintains that the majority of its products are not made in the West Bank manufacturing plant. Salts and minerals come from mud mined by Dead Sea Works, which operates only on the Israeli and Jordanian side of the Dead Sea, however Ahava is licensed to extract mud from the West Bank section. Raw materials for soaps are made in another kibbutz plant in northern Israel, and many other Ahava products come from factories in south and central Israel. In some cases, Mitzpe Shalem is only used for packaging. Conversely, anti-occupation groups point out that two of its main shareholders (the settlements of Mitzpe Shalem and Kalia) are located in the West Bank. Under the new EU labelling agreement, at least some of Ahava’s products could be labelled as Made in Israel.7

Palestinian Employment

Where the aim is to pressurise Israeli companies to withdraw from the occupied territories through punishing them for being there, the Palestinian employees of factories in the settlements also lose out. Researchers of West Bank settlement conditions and supporters of boycotts have acknowledged the importance of settlement industry in providing economic opportunities for Palestinians, despite the deeply problematic working conditions and lack of pensions, vacation days and disability insurance.8 A 2014 report issued by the International Labour Office declared that Palestinians are increasingly dependent on employment in Israeli settlements.9 Around 25,000 Palestinians work for Israeli settlements, although this does not include any of the 35,000 workers estimated to be employed by Israelis (including in Israel) illegally. However, around half of those work recorded officially work in construction. As the EU has made clear, the main focus of the labelling is on agricultural products, meaning less than half of the companies that employ Palestinians would be affected.

In the end, the labelling affects roughly 1% of all trade into the EU. It clearly will have no severe practical implications for the Israeli economy, where only about $150 million of the annual $15 billion in Israeli exports to the EU are believed to originate in the settlements.10 Its significance lies in the diplomatic message European officials are sending to Israel; namely, Israel’s continued settlement building and the lack of movement on the peace process are unacceptable.

Natasha recently graduated with a Master’s degree in Middle Eastern Politics from SOAS, University of London, where she focused on Middle Eastern political economy, international law and the Israel-Palestine conflict, and wrote her Master’s thesis on the political economy of the occupation. She currently works as a research assistant at the Moshe Dayan Center, where she concentrates on the Palestinians, political economy, and Iran.

1 Israel extended its laws to the territory in 1981, effectively annexing it, even though most countries including members of the EU do not recognize the annexation.


2 European Union, ‘Interpretative Notice on indication of origin of goods from the territories occupied by Israel since June 1967’, 11 November 2015,



5 European Union, ‘ Fact Sheet on indication of origin of goods from the territories occupied by Israel since June 1967’, 11 November 2015,



8 International Labour Office, ‘The situation of workers of the occupied Arab territories’, 2014


Natasha Spreadborough

Diwaniyya Contributor