WRITTEN QUESTION P-1300/01

by Luisa Morgantini (GUE/NGL) to the Commission

(19 April 2001)

Subject: Irregular application of the EC-Israel Trade Agreement

In September 1998 Israeli officials confirmed to the European Commission that as a matter of official policy Israeli Customs was routinely certifying products wholly produced or substantially processed in Israeli settlements as originating in the State of Israel. In 1999 several cases of fraudulent imports of settlement products under preferences were uncovered by Member States' customs services and presented to the Commission. In January 2000 we were informed by the Commission that the interpretation of the territorial scope of application of the agreement adopted by Israel does not coincide with the interpretation accepted by the European Union, and that efforts were under way to find a viable solution without prejudicing the position of any of the parties. In March 2000 the Commission assured us that the verification procedure for the origin of products makes it possible to determine whether a product may benefit from the right to preferential treatment even where there is a failure to co-operate in the determination of origin on the part of the third country concerned. According to statements made to the Israeli press by the responsible Israeli official, in May and June Member States' customs services reportedly carried out the first of several thousand such verification procedures, and Israeli customs was preparing to reply to Member States' queries concerning the origin of settlement products by confirming their originating status.

Has Israel's application of the origin rules protocol according to an interpretation of the territorial clause that contravenes public international law encumbered or diminished the capacity of the Member States' customs services to detect and prevent customs fraud? As the guardian of the Community Treaties, can the Commission tell us the extent of the customs fraud perpetrated against the Community that has arisen over the past years and decades from the failure of Member States to prevent the importation under preferences of settlement products improperly certified by Israeli customs as originating in the State of Israel? Does the Commission intend to recover the losses to the Community treasury from the Member States whose customs services failed to detect and prevent such fraud?

Answer given by Mr Patten on behalf of the Commission

(21 May 2001)

As the Honourable Member may know, the Union-Israel Association Agreement establishes a procedure for the verification of the proof of origin. It is foreseen that the customs authorities of the importing country returns the origin certificate to the customs authorities of the exporting country if they have a reasonable doubt

as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of Protocol 4 of the Agreement. The verification shall be carried out by the customs authorities of the exporting country. This process is presently taking place.

About 2000 certificates of origin have been sent to Israel's customs authorities by Member States customs authorities. The Union-Israel Association Agreement foresees that Israel's customs authorities have up to 10 months to send an answer to Member States custom authorities. In case Israel customs authorities fail to answer or if reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the agreement indicates that the requesting customs authorities shall refuse entitlement to the preferences.