EUROPEAN UNION CONSIDERING ECONOMIC SANCTIONS AGAINST ISRAEL

A leaked internal EU report, allegedly critical of Israel for reputedly failing to move forward with peace talks, and for initiating new construction in East Jerusalem, indicates that the European Union may decide to impose sanctions. Bankers in countries that are members of the European Union, and whose client base includes companies that import goods from Israel proper, or the settlements in Judea and Samaria, which Arab residents want as part of their proposed state, should be on the alert for any announcement that might affect their ability to transfer, or receive, funds, on behalf of customers.

Tensions are particularly high in the region this week; Israel has stated that it will only accept defensible borders, and a demilitarized Palestinian state, but PLO and PA officials have demanded a Right of Return for Arabs who left Israel in 1948, all the territory west of the Jordan River that was annexed by Jordan*, and East Jerusalem for their capital. Israel annexed East Jerusalem in 1967, in a defensive war with the Arab countries. Additionally, the PA has created a unity government with Hamas, which is supported by the Palestinian Islamic Jihad in Gaza, and  the stated aim of both is the total destruction of Israel. Under these circumstances, a negotiated solution that would result in the creation of a new state of Palestine is highly unlikely. Israel knows that the presence of these two radical Islamist groups in Judea and Samaria would result in all-out missile attacks upon it, from that territory.

Whether actual economic sanctions against Israel, or products originating in the Israeli settlements located outside the Green Line (the 1948 Armistice line from the Israeli War of Independence) is not known, but compliance officers should be on standby, and ready to implement sanctions, if they are declared.
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* Post-World War I international treaties, which were ratified and adopted by the League of Nations, and later by the United Nations, stated that all of the new British Mandate of Palestine was to be a Jewish National Home, with all minorities resident therein to have their rights protected. Jordan, which was part of the original 1920 Palestine, was unilaterally separated by the British Government, who imposed a monarchy there, installing the Hashemite Kingdom of Jordan.

 The Golan Heights, part of the League Mandate, was transferred to France by Britain, in exchange for certain petroleum rights in Iraq. All these the British actions appeared to violate the terms of the League Mandate, and left a number of territorial issues unresolved to this date.