An EU directive will impose customs duty on products made in the cities of Modiin and Maccabim-Reut, because they are built on what was considered no-man’s land between 1949 and 1967. The directive also applies to good produced in eastern Jerusalem, according to Globes.
As of Monday, the EU will no longer recognize products originating beyond the “green line” – the armistice line of 1949 – as made in Israel, and those products are now liable to customs duty.
Any company exporting goods from Israel to Europe must now declare the location where the goods were manufactured, and if they originate beyond the 1949 armistice line, they may not receive the benefits of duty-free status under the 1995 EU-Israel Free Trade Agreement.
In addition to the two towns whose land has been part of Israel proper throughout its existence, the EU directive will affect companies operating in Ariel, Barkan, Emmanuel, Givat Zeev, Itamar, Oranit, Shaarei Tikva, and Yitzhar in Jerusalem, Judea and Samaria, and Alonei Bashan, Ein Zivan, Katzrin, Marom Hagolan, Majdel Shams, and Neve Atid on the Golan Heights, which was legally annexed by the Knesset on December 14, 1981.
Israel Export and International Cooperation Institute chairman Ramzi Gabbay told Globes that there were few exports from Modiin and Maccabim-Reut, but, “The government should make every effort to remove this from the agenda to prevent creating a precedent.”
The new EU directive could mean an end to the ability of many Israeli made products to compete in the European market. But Arutz 7 quotes some Israeli manufacturers in Judea and Samaria who are welcoming the distinction between their region and 1948-1967 Israel, claiming that the “made in the settlements” labels actually boost sales.
UPDATE: The EU has clarified that they only see part of Modiin (Maccabim-Reut) as an illegal settlement, not the entire city.