A Message for the EU: Withdrawing Preferential Trade with Israel is an Appropriate Response to Israel’s Violation of International Human Rights Law

Ever since the International Court of Justice (ICJ) rendered its advisory opinion on the wall to the General Assembly on 9 July 2004, there have been calls from various quarters for boycotts, divestment, and sanctions against Israel. Some of the questions that have arisen in this context are whether sanctions are legal, whether they will work against Israel, and if not, what alternative means are available to pressure Israel to comply with international law.

 Sanctions against Israel though lawful are problematic

Economic coercion is generally not prohibited by international law. Article 2 (4) of the UN Charter only prohibits the use of armed force – not economic force. A Brazilian proposal to extend the prohibition of this Article to include economic force was rejected during the drafting of the Charter in 1945.

 The only prohibition of economic coercion is contained in the 1970 Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States. This prohibits the use of economic measures if its aim is ‘to coerce another state in order to obtain from it the subordination of the exercise of its sovereign rights’. However, this does not apply to Israel since sanctions would not subordinate its sovereign rights for a purpose that is inconsistent with the principles of the Charter. Rather, it is Israel’s policies and practices in the Occupied Palestinian Territories (OPTs) that conflict with the principles and purposes of the Charter.

Comprehensive sanctions against Israel must be authorised by the UN Security Council. Article 41 of the Charter authorises the Security Council, as the principal political organ of the UN, to direct states to take measures against the incumbent state not involving the use of armed force. However, this would need the assent of all of the permanent members of that body. State practice would suggest that the USA would veto such an attempt and so too would Britain, and possibly France (who normally abstain or shield behind the US veto).(¹)

Comprehensive sanctions, such as a trade embargo or an arms embargo (similar to the 1977 arms embargo against Apartheid South Africa) would involve a complete halt (as far as that is possible) of trade in such items with Israel. However, for these to be effective all states would need to cooperate.(²)

Why withdrawing preferential trade is not a sanction

In the absence of an agreement providing otherwise, goods imported into one country from another would normally be subject to customs and excise duty (i.e. a tax). Preferential trade agreements waive or lower this tax. The EU, like all states and international organizations, is under no obligation to confer gifts or favours, in the form of economic aid or trade concessions to any other nation. This is because preferential trade is discretionary. It is a privilege and not a right. Israel is taking advantage from something that it would not otherwise be entitled to benefit from. Withdrawing preferential trade from Israel cannot therefore be a sanction.

Although Israel is not a member of the EU (and is therefore not entitled to profit from the common market), it benefits from trade concessions granted through the application of the EU-Israel Association Agreement to its territory.(³) This agreement extends the advantages of being a member of the EU (such as free trade) to Israel (without having to be burdened with the costs of being a member). The EU also benefits because it has another market to export its capital, goods and services.

However, the association agreement is conditional upon respect for human rights, democratic principles and the rule of law.(⁴) The preamble to the agreement states that “the principles of the United Nations, particularly the observance of human rights and democracy” form the very basis of the association.

Article 2 provides:

“Relations between the Parties, as well as the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this agreement.”

According to three separate UN reports by Catherine Bertini, John Dugard and Jean Ziegler, and reports by Amnesty International, Human Rights Watch and a plethora of other NGOs, Israel does not respect the human rights of the Palestinian people in the OPTs. It is therefore in breach of its humanitarian and human rights obligations under international law. Moreover, the ICJ, from which there is no appeal, held that the construction of the wall “constitutes breaches by Israel of several of its obligations under the applicable international humanitarian and human rights instruments.”

It is therefore difficult to see why Israeli products should continue to be exempt from EU customs and excise duty when it is in material breach of this agreement. Article 60 (¹) of the Vienna Convention on the Law of Treaties between States and International Organizations provides that “[a] material breach of a bilateral treaty by one of the parties entitles the other to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part.” Whilst a material breach of a treaty, however serious, does not ipso facto put an end to the treaty, it does give the other party, subject to certain safeguards, the right to invoke the breach as a ground for terminating the treaty.

It is submitted that in light of the advisory opinion, the very legality of this agreement is questionable.

The EU can act unilaterally

The EU, as an international organization made up of its constituent states, has a responsibility, in the same way as states do, to abide by the ICJ’s advisory opinion. The EU is set up by treaties which are governed by international law. The European Court of Justice has held that customary international law is binding upon the EU.(⁵) At least two of the obligations set out in the ICJ’s advisory opinion are of a customary character. Further, all 25 members of the EU voted in favour of the General Assembly resolution which demanded that Israel comply with its legal obligations as identified in the advisory opinion.(⁶)

The ICJ called upon all states to prevent the wall from impeding the exercise by the Palestinian people of their right to self-determination and also to ensure Israel’s compliance with international humanitarian law. The EU is not having much success issuing statements, declarations and demarches. Something more substantive is necessary.

The EU can act unilaterally and there is a precedent for this. On 22 April 1980, during the hostage crisis at the American Embassy in Tehran, the EU imposed sanctions against Iran for violating the laws of diplomatic immunity. The EU acted after the Soviet Union vetoed a resolution in the Security Council that sought to impose sanctions on Iran. It justified its act by saying “the situation created a concern for the whole international community”. If the EU could then act without express authorisation from the Security Council, it could surely do so today. The EU need not be concerned about US vetoes. The US may have a seat in the Security Council, but it does not have a seat in the European Council.

The EU would rather breach its own laws than censure Israel

The EU has been ambivalent when it comes to censuring Israel. On the one hand, it says it is committed to the “two state vision” enshrined in the Roadmap and in Security Council resolutions 1397 and 1515. On the other hand, it has done nothing substantive about Israel’s Wall which is snaking its way throughout the West Bank. In February 2005, President George W. Bush said at a press conference in Brussels that a “state of scattered territories will not work”. But this is precisely what the Palestinians will get if nothing is done about the Wall.

The EU is allowing politics to prevail over law. But in a democratic society it should be the other way around. Sanctions are a non-violent measure designed to induce Israel to comply with international law. Withdrawing preferential trade is not even a sanction. It is a cardinal principle of international law that no benefit can be conferred from an illegal act (ex injuria non oritur jus). The EU in allowing Israel to benefit from its unlawful policies and practices in the OPTs - through the application of the association agreement - is doing precisely that.

Victor Kattan, LLB (Brunel), LLM (Leiden), was formerly a UN Development Program TOKTEN consultant to BADIL. This article is partly based on a paper that will appear in volume 13 of the Palestine Yearbook of International Law.

Endnotes:
(1) See, Victor Kattan “A state cannot indefinitely stand against the world”: An interview with UN Special Rapporteur John Dugard, The Electronic Intifada, 23 September 2004 at the following web site: http://electronicintifada.net/v2/article3112.shtml.
(2) See, the example of sanctions against Apartheid South Africa in Shridath Ramphal, South Africa: The Sanctions Report (Prepared for the Commonwealth Committee of Foreign Ministers on Southern Africa). New York: Penguin Books, 1989.
(3) This agreement entered into force during the Presidency of Ehud Barak in June 2000. It replaced the 1975 free trade agreement, which replaced the 1964 non-preferential trade agreement signed with the European Economic Community. The territorial requirement does not include the Arab territories occupied by Israel.
(4) The Euro-Mediterranean Agreement establishing an Association between the European Communities and the Member States and Israel, which was signed on 20 November 1995 and entered into force on 1 June 2000 can be located at OJ 2000, L 147, 21 June 2000. For further reading see, Esa Paasivirta, ‘EU Trading with Israel and Palestine: Parallel Legal Frameworks and Triangular Issues,’ 4 European Foreign Affairs Review (1999): pp. 305-326; and by the same author, “Human Rights, Diplomacy and Sanctions: Aspects to “Human Rights Clauses,” in the “External Agreements of the European Union” in Jarna Petman and Jan Klabbers, Nordic Cosmopolitanism: Essays in Honour for Martti Koskenniemi. Leiden: Brill 2003, pp. 155-180.
(5) See, the opinion of M. Darmon AF in joined cases 89, 104, 114, 116, 117 and 125-129 185, Ahlström Osakeyhtiö [1988] ECR 5193 para 49; Case C-286/90 Anklagemyndigheden v. Pouslen und Diva Corp. [1992] ECR I-6019, para. 9; Case C-162/92 Racke [1998] ECR I-3655, para. 24; Case C-405/92 Mondiet [1993] ECR I-6133 paras. 12 and 13; Case C-27/96 Danisco Sugar Case [1997] ECR I – 6653 para. 21; Case C-29/99 Commission v. Council ECR I – 11221 [2002] paras. 83 and 84; and finally see C-216/01 Budvar v Ammersin (2003) at para. 154.
(6) H.E. Mr. Richard Ryan, Ambassador, Permanent Representative of Ireland to the United Nations, on behalf of the European Union, explained the EU’s vote at the General Assembly as follows, “[t]he European Union reaffirms its commitment to a negotiated two-state solution agreed between the parties which would result in a viable, contiguous, sovereign and independent Palestinian State existing side by side in peace with an Israeli in secure and recognized borders [emphasis added].” 6 May 2004, EU Presidency Statement – the question of Palestine – explanation of votes (New York).