The European Court of Justice (ECJ) ruled today France properly applied European Union (EU) law by requiring exporters of goods made in Israeli settlements to label their products accordingly. Israel is present in the territories it has held since 1967 as an occupying power under international humanitarian law. Therefore, the court reasoned, labeling products from those areas as “Made in Israel” would mislead consumers as to (a) the goods’ place of origin, and/or (b) Israel’s status as an occupying power, and not a sovereign entity, in those territories. 

The ECJ took note that settlements “give concrete expression to a policy of population transfer conducted by [Israel] outside its territory, in violation of the rules of general international humanitarian law.” Without specific language identifying products from the settlements, consumers in Europe would lack information they require to make “ethical considerations and considerations relating to the observance of international law.” Labeling must therefore specify, the court held, whether goods are made in Israeli settlements in addition to whether they originate in the territories Israel occupies. The court’s decision binds all EU member-states, and cannot be appealed. 

The labeling dispute has been ongoing since the European Commission issued an EU-wide notice in November 2015 interpreting a 2011 regulation on consumer food information promulgated by the European Parliament. Under the 2015 notice, EU member governments were advised to require goods imported from Israeli settlements in the West Bank, Golan Heights, and East Jerusalem to carry special labeling language, and to bar such goods from being labeled simply “Made in Israel.” (The Commission cannot impose new legal obligations on EU member states, but its interpretations of EU law serve as guidance for European governments.) Such regulation was necessary, the Commission reasoned, to apply the 2011 parliamentary rule in accordance with the EU’s position that Israel’s pre-1967 borders define its sovereign territory.

Critics were quick to condemn the interpretive notice as anti-Semitic and anti-Israel. Prime Minister Netanyahu and others in his administration analogized the European Commission’s analytical distinction between Israel and its settlement outposts to Nazism. “In the past Jews were marked with a yellow patch, and today they are looking to mark our products,” Vered Ben-Sadon, a wine producer in a West Bank settlement, told Israel Radio. The American right-wing blogger Robert Spencer published an article titled “Nazism Returns: European Union to Put Warning Labels on Jewish-Made Products.” But many within Israel and abroad applauded the notice as a step toward curbing the settlement enterprise and reducing tensions in the region.  

France implemented the Commission’s notice one year later with a regulation directing that goods produced in Israeli settlements be labeled as such. The Organisation Juive Européene (European Jewish Organization) (OJE) and Psagot Winery, which “sources its grapes from five vineyards located near the [West Bank] settlements of Psagot, Kida, Har Bracha, Gush Ezion and Alon Moreh,” challenged the French rule as discriminatory before the Council of State. The French council referred the matter to the ECJ because it would turn on interpreting EU law, which is the ECJ’s purview. 

There, the case first came before Advocate General Gerard Hogan, who advised the court that “EU law requires for a product originating in a territory occupied by Israel since 1967, the indication of the geographical name of this territory and the indication that the product comes from an Israeli settlement if that is the case.” The Grand Chamber of the ECJ then received the case for consideration. 

The Israeli government has opposed this challenge from the outset. It urged Psagot and OJE to withdraw their complaints, fearing they would backfire by precipitating an ECJ ruling that would “create a more difficult reality” for settlement producers who have, until now, not been required by many European governments to comply with the EU labeling rule.  

“We expect European countries that value the peace process and that deem the relationship with [Israel] important not to implement the ruling in a manner that would damage our relationship,” an Israeli diplomatic source told the Times of Israel last month, anticipating the court’s decision. After the 2015 EU notice was issued, Israel temporarily suspended ties with EU bodies involved in the peace process with the Palestinians. Israel may respond with similar diplomatic measures should additional European governments issue labeling requirements in line with today’s ruling. Israel has also prepared a diplomatic and public relations campaign to mitigate the fallout from the case, encouraging EU members “to adopt a loose interpretation and implementation of the ECJ decision.” In the past the country has even lobbied U.S. lawmakers and policymakers to weigh in with the EU on its behalf. 

The EU and its members have taken a range of steps to differentiate between Israel’s sovereign, “Green Line” territory and the Palestinian territories it occupies. Some EU governments, Ireland for example, have discussed a ban on products from settlements as a next step to advance pressure on Israel’s settlement policy. Israel has long sought to brand such efforts, however, as the equivalent of rejecting Israel’s right to exist. Businesses like the home rental platform Airbnb have faced serious backlash for seeking to distinguish between Israel and Israeli settlements, including private legal challenges, threats of litigation by Israel’s Justice Minister, and blacklisting by U.S. state governments. Many U.S. states have enacted laws prohibiting boycotts of Israel, 17 of which specifically ban boycotts aimed at the territories Israel illegally occupies. 

And last week the Israeli Supreme Court upheld the government’s deportation of Human Rights Watch’s Israel Palestine director Omar Shakir under a theory holding criticism of business activity in settlements to constitute advocacy for boycotting Israel, which is grounds for deportation under a 2017 amendment to Israel’s Law of Entry. “By the logic of the Israeli Supreme Court, EU officials promoting [the ECJ] ruling or supporting labeling of settlement goods should also be deported from Israel,” said Shakir on Twitter today.

Today’s ruling provides the French Council of State with a binding interpretation of EU law, according to which it must dispose of the complaints brought by OJE and Psagot. All other courts in EU member states will be likewise bound by the ECJ’s finding that labeling language identifying goods from the occupied Palestinian territories and Israeli settlements is mandatory.