Israel: EU to Start Taxing Goods From Beyond Green Line

October 15, 2002
By Ora Koren and Amiram Cohen, Ha'aretz Correspondents

Sources in Jerusalem predict that France and other European Union nations will, in the coming days, begin full taxation on imported goods produced beyond the Green Line. The belief stems from a recent French decision asking Jordan Valley famers to label date cartons intended for export as "Produce of Palestine," in order for them to be exempt from taxation.

According to the sources, it is not yet clear which operators beyond the Green Line will suffer from the taxes, as Israel has not yet given the the EU an official list of those that indeed do have operations beyond the Green Line. The sources estimate that the the EU will make use of lists they perceive as inaccurate, transferred to them by non-government organizations, such as the human rights group B'tselem.

Two years ago, EU institutions decided that goods produced beyond the Green Line were not considered Israeli goods. As a result, they do not enjoy tax benefits given to Israeli exporters under the Association Agreement between Israel and the EU. The decision includes goods manufactured in East Jerusalem and the Golan Heights.

However, Israel claims that the Association Agreement should include those areas, since areas under Palestinian control are considered part of Israel's tax envelope, according to the Paris Agreements between Israel and the Palestinian Authority. So far, the EU decision has not yet been implemented.

After no progress was made in negotiations on the subject, some ten months ago EU institutions decided to take deposits on Israeli goods manufactured beyond the Green Line. However, the EU countries were not required to adopt the decision, and were allowed to take action according to their interests. Countries that adopted the decision required importers of Israeli goods to make a deposit when the imported goods entered the country, and if the product was not produced beyond the Green Line, the importer could reclaim the deposit.

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