THINK TANK TARGETS ISRAEL

Europe pressed to distinguish dealings with Israel from West Bank activity,

JERUSALEM // The European Union agreed this week to push ahead with the introduction of labels that identify Israeli goods made in settlements in the occupied West Bank.

Now, an influential European think tank is proposing that Israeli banks also be targeted.

The European Council on Foreign Relations, which frequently informs EU policy, argued in a paper yesterday that the EU was in breach of its own laws.

“Under its own regulations and principles, Europe cannot legally escape from its duty to differentiate between Israel and its activities in the occupied Palestinian territories,” said the report titled “EU Differentiation and Israeli Settlements”.

The EU must go further to distinguish its dealings with Israel from Israel’s activities in the West Bank and East Jerusalem, which it has occupied since 1967, the report said.

European diplomats have long maintained identifying goods originating in settlements was only the first in a series of steps the EU could take against Israel over its settlements policy, one that in financial terms was expected to have a relatively minor effect on the Israeli economy. But the new proposals would go much further, reaching into banking, loans and mortgages, qualifications earned in settlement institutions, and the tax-exempt status of European charities that deal with Israeli settlements.

Authors of the report say separating the EU’s dealings with Israel from the settlements will force Israel to consider the sort of relationship it wants with Europe, and, in turn, encourage the Jewish state to return to talks with the Palestinians for a two-state solution to the conflict.

The most significant proposal was on banking, where large Israeli institutions have daily dealings with major European banks, while also providing loans and financing to Israeli businesses and individuals based in the settlements. Under European Commission guidelines from 2013, EU loans and member state-funded lending cannot be provided to Israeli entities operating in the occupied territories.

While not legally binding on EU states, the guidelines have an influence.

“Do day- to- day dealings between European and Israeli banks comply with the EU requirement not to provide material support to the occupation?” the report asks, saying it was an issue the EU had yet to resolve.

Israel is furious at Europe’s steps on labelling, and compares the policy to to the growing Boycott, Divestment and Sanctions movement.