Source: EURLEX
Language: en
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# 52015SC0072

**JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in Israel Progress in 2014 and recommendations for actions Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Implementation of the European Neighbourhood Policy in 2014 /\* SWD/2015/0072 final \*/**

  

1.         OVERALL
ASSESSMENT AND RECOMMENDATIONS FOR ACTION

This
document reports on the progress made between 1 January and 31 December 2014 in
the implementation of the EU—Israel European Neighbourhood Policy (ENP) Action
Plan. Developments outside this period are taken into consideration where
relevant. This is not a general assessment of the political and economic
situation in Israel. Information on regional and multilateral sector processes
is contained in the Partnership for Democracy and Shared Prosperity progress
report.

The
political and security situation in 2014, with its armed conflicts and
hostilities, was a challenge for the Middle East. Israel launched Operation
Protective Edge in July 2014, following indiscriminate rocket fire from the
Gaza Strip. The renewed hostilities in Gaza resulted in 72 deaths on the
Israeli side and over 2 100 on the Palestinian side, of which 70 %
were civilian according to the United Nations (UN).

While
the EU recognises that Israel has the right to defend itself, the devastating
effect of the hostilities in Gaza in 2014 highlighted the significant challenge
associated with Israel’s responsibilities in the occupied territories.
The EU has consistently held the view that the current situation is untenable.

More
Palestinians were killed in the Gaza Strip in conflict-related incidents in
2014 than in any year since 1967, while in the West Bank figures were the
highest since 2007. The EU continued to call for a fundamental change in the
political, security and economic situation in the Gaza Strip. In addition, the
EU urged the parties to resume meaningful negotiations with the aim of
achieving a comprehensive peace agreement based on the two-state solution.

Following
the breakdown in direct peace negotiations in spring 2014, progress on the Middle
East Peace Process (MEPP) stalled. The EU maintained its offer of a Special
Privileged Partnership to both its Israeli and Palestinian partners, while
condemning actions which could contradict stated commitment to negotiations.
Such actions included plans for new settlements, in particular in and around
East Jerusalem, the expropriation of land and plans to displace Bedouins in the
West Bank. The EU appealed for the holy sites in Jerusalem to be fully
respected stressing that any change in the status quo would have deeply
destabilising effects.

Regarding
the implementation of the EU-Israel ENP Action Plan, no EU-Israel Association
Council or Committee meetings were held in 2014. Nevertheless, cooperation and
bilateral dialogue with Israel was far greater than in 2013. The new High
Representative for Foreign Affairs and Security Policy/Vice President of the
European Commission, Federica Mogherini, dedicated her first foreign visit to
meeting Israeli and Palestinian partners.

The
State of Israel is based on the values of democracy, respect for human rights
and the rule of law, where fundamental rights are enshrined in ‘basic laws’ and
it has a functioning market economy. This, however, needs to be seen in the
unique context of the occupation of Palestinian territories.

The 19th Knesset voted unanimously to dissolve
itself on 8 December 2014 and to hold new elections on 17 March 2015. The
outgoing Knesset remains in office until the elections, but has gone into
electoral recess, effectively putting all legislative activity on hold. The
next Knesset cannot continue proceedings on laws that have not passed a first
reading at least in the outgoing Knesset.

Regarding domestic human rights
issues, Israel’s Universal Periodic Review under the United Nations Human
Rights Council was adopted in March 2014, with Israel accepting 105 of the 237
recommendations made during the review. Progress was also made on gender
equality and on implementing related rights. Although Israel has committed
itself to respecting human rights and fundamental freedoms, concerns persist
about the discrimination of minorities, especially those of Bedouins.

There was increased tension between
Jewish and Arab communities in Israel in light of Israeli-Palestinian violence
and renewed hostilities in Gaza. This was reflected in inflammatory statements,
protests and increased instances of unrest. High-ranking officials repeatedly
condemned incitement to racism or violence. Even excluding Operation
Protective Edge, 2014 saw the highest number of civilian deaths related to
violent incidents and terror attacks for many years.

Israel addressed some of the
recommendations of last year’s report. The Convention on Pan-Euro-Mediterranean
preferential rules of origin was ratified and Israel addressed issues relating
to its Intellectual Property Rights (IPR) regime concerning pharmaceuticals.

Israel made limited overall progress on
implementing the ENP Action Plan in 2014, bearing in mind that the EU’s
relations with Israel remained the most developed in the region, involving a
significant level of trade and economic and scientific cooperation. However,
implementing common values particularly respect for human rights in the
occupied territories and in relation to minorities continued to pose a
challenge. On a positive note, Israel continued to introduce effective measures
to combat human trafficking and enhance its efforts to curb money laundering.
Israel strengthened its relations with a number of EU agencies.

Based
on the assessment of the progress made in 2014 on implementing the ENP, Israel
should focus its work in the coming year on:

·
making
every effort to ensure an early resumption of the Middle East Peace Process;

·
ensuring
respect for the principles of international law and human rights in the
occupied territories, including intensifying efforts to address the issue of
children in military detention and minimising the use of administrative
detention without trial, and ensuring accountability for possible violations
during military operations;

·
ensuring
respect for international law and human rights in the treatment of irregular
migrants and asylum seekers;

·
continuing
and increasing its efforts to ensure the equality of all Israeli citizens;

·
cooperating
fully with United Nations Human Rights Council special procedures and
mechanisms;

·
ratifying
the protocol on the illicit manufacturing of and trafficking in firearms, their
parts, components and ammunition to the 2003 UN Convention on Transnational
Organised Crime;

·
ensuring
the independence of the Equal Employment Opportunities Commission and providing
it with adequate resources;

·
ensuring
that internal procedures for stateless persons are in line with the 1958
Convention on the Status of Stateless Persons;

·
strengthening
cooperation with the EU in UN bodies, including on human rights issues,
building on successful cooperation in 2014 on, for example, the death penalty
and lesbian, gay, bisexual, transgender and intersex issues.

The
level of ambition in further developing the EU-Israel relationship in the
coming years will depend on the level of commitment to common values.

2.         POLITICAL DIALOGUE AND REFORM

Deep and sustainable democracy

The
Knesset passed into law two bills on governance which, inter alia, raised
the electoral threshold from 2 % to 3.25 % and made no-confidence
motions conditional upon presenting an alternative government. The new
electoral threshold was criticised by some for forcing smaller parties,
including those representing the Arab minority, to merge or run on joint lists.
However, others argued that it could help reduce party fragmentation,
strengthen partisan representation and avoid wasted votes. In January 2015 the
Supreme Court rejected a petition to annul the law. However, the court stated
that the appeal could be reviewed again following the March 2015 elections,
when its effects will be more clearly understood.

The
Knesset adopted a law on drafting ultra-Orthodox men into military and
national service.

The
Knesset passed a new law, giving de facto constitutional status to existing legislation requiring a referendum
on any peace treaty or plan which would involve the withdrawal from, or
concession of, territory considered sovereign under Israeli law, unless a
qualified majority of 80 Knesset members voted in favour of ceding such
territory.

The
government decided to support the drafting of a basic law defining Israel as
the nation state of the Jewish people in accordance with a number of
principles. However, no such law was presented for first reading.

In
January 2014 the government approved the transfer of responsibility for dealing
with the Bedouin in the Negev from the Prime Minister’s Office to the
Agriculture and Rural Development Ministry.
Legislative efforts to implement the Prawer-Begin plan for the Negev Bedouin
remained frozen. In May the Be’er Sheva District Court dismissed the state’s
appeal to demolish the unrecognised Bedouin village of Alsira, which has a
population of around 350 Bedouins. In December 2014, a plan to build
approximately 2 000 new houses for the local community in the Negev
Bedouin village of Umm Batin, and to legalise existing houses there, was
approved in principle by an Interior Ministry planning committee. Final
approval was pending at the end of 2014.

In
general, freedom of expression and freedom of association were
well respected in Israel, but continued to be challenged particularly with
regard to the Israeli-Palestinian conflict. While no undue restrictions on
demonstrations or protests in Israel were reported, including during the
military operation in Gaza, some cabinet ministers publicly expressed their
opposition to protests during the armed conflicts while others called for
boycotts of Arab-Israeli businesses participating in a general strike against
the Gaza operation. In several cases, Arab Israelis were dismissed or suspended
by their employers, including public institutions, for public statements
supporting Gaza or opposing Israel.

The authorities took a number
of steps during the year to combat ‘price-tag’ attacks and other forms of hate
crime. Several indictments were issued for incitement to racism or violence
during the summer against citizens calling for attacks on Arabs. Earlier in the
year, several incidents took place in Arab towns in northern Israel, including
anti-Arab graffiti on a mosque in Fureidis. The Prime Minister condemned the
attacks. President Rivlin criticised demonstrators who protested against a
summer wedding between a Muslim man and a Jewish woman who had converted,
saying ‘incitement, violence and racism had no place in Israeli society.’
Several price-tag attacks took place in October and November, including setting
fire to a bilingual Jewish-Arab school in Jerusalem. Three suspects, allegedly
members of a far-right Jewish group, were arrested and charged.

It testifies to the vitality
of Israeli democracy that virtually all private legislative initiatives that
would curtail minority rights or shrink a conducive environment for civil
society did not gather sufficient support to make progress.

According
to Transparency International, the perception of corruption in the
Israeli public sector remained at a relatively low level in 2013, with Israel
being ranked 36th of 177 countries. Israel was ranked 37th of 175 countries in
Transparency International’s Corruption Perceptions 2014 Index.

Other
human rights and governance-related issues

Israel
is a party to most international human rights instruments. Israel
ratified three related optional protocols on: the involvement of children in
armed conflict; the sale of children, child prostitution and child pornography;
and the status of refugees. Human rights issues were raised with the Israeli
authorities in day-to-day contacts and at the eighth
meeting of the Informal Working Group on Human Rights held in November 2014. Israel’s Universal Periodic Review was adopted in March. Israel
accepted 105 of the 237 recommendations made during the review.

Israel
rejected all recommendations using the language ‘State of Palestine’, but
welcomed an ‘open dialogue with delegates of the Palestinian
Authority (PA) on matters of human rights’. Israel questioned the relevance
of examining matters of international humanitarian law in the Universal
Periodic Review, as well as the applicability of international human rights
legislation to the West Bank and Gaza Strip. Israel criticised the EU’s
abstention in the vote on the Human Rights Council resolution establishing a
Commission of Inquiry to review acts committed by all parties during Operation
Protective Edge. In November the Israeli Government officially refused to
cooperate with the UNHRC commission of inquiry, heavily criticising committee
chairman William Schabas.

Israel postponed
until spring 2015 any decision allowing a visit by Mr
Wibisono,
the new UN Special Rapporteur on the Palestinian territories
occupied since 1967, who in August 2014 formally asked the Israeli Government
to grant him access to Israel and Palestine[1].

In
January 2014 the Diaspora Affairs Ministry issued its annual anti-Semitism
report focusing primarily on Jewish perceptions of anti-Semitism, and drawing
on a study by the EU’s Fundamental Rights Agency released in late 2013. In July
2014 the Knesset’s Committee on Immigration, Absorption and Diaspora Affairs
convened urgently to discuss anti-Semitic demonstrations in Europe in the wake
of Operation Protective Edge. The eighth annual EU-Israel seminar on
combatting racism, xenophobia and anti-Semitism took place in Jerusalem in
October 2014.

Two
new statutory amendments to the equal pay law were introduced. One
enables women who are paid less than men to be compensated for gender-based
discrimination, including for any financial damage suffered. This amendment
also provides a host of protective measures for female workers who bring
charges of discrimination based on wage gaps against their employers. The
second amendment mandates public companies, non-governmental organisations and
other bodies obliged to publish the wages of their employees to make a
distinction between men and women when reporting on salaries. Other statutory
developments included the Prevention of Sexual Harassment Law. Where an
employee is fired within three years of filing a sexual harassment complaint at
work, the burden of proof is on the employer to show that the dismissal was not
in retaliation for the complaint.

The
Knesset passed a law to ensure more equal representation of women on the
Judicial Appointment Committee which selects Israel’s judges. In December 2014, the government approved a national plan to
advance gender equality and instil gender awareness in the work of
government ministries in order to promote equality between men and women.
Ministers will have to present annual reports on the progress made in advancing
gender equality in their ministries.

The
Knesset adopted a regulation expanding membership of the Advisory Committee of
the Equal Employment Opportunity Commission from five to ten members,
including Christians, Muslims, Druze, Circassian, ultra-Orthodox Jews and
Ethiopians, on the basis that they are more likely to suffer unemployment than
the average population.

Cooperation
on foreign and security policy, regional and international issues, conflict
prevention and crisis management

Direct
peace negotiations between Israelis and Palestinians re-launched in 2013
on the basis of a US-brokered framework broke down in April 2014 following
Israeli settlement announcements, Palestinian accession to 18 international
conventions and the formation of a Palestinian National Consensus Government.
The EU, in its Council conclusions of May, July and August 2014, urged the
parties to resume meaningful negotiations with the aim of achieving a
comprehensive peace agreement based on a two-state solution. It stressed that
the US-led peace efforts, fully supported by the EU, must not go to waste, and
cautioned that a fundamental change in negative developments on the ground,
including continued settlement expansion, was necessary to prevent irreversible
loss of the two-state solution.

The
50-day military conflict between Israel, Hamas and other Palestinian militant
factions in Gaza in July and August 2014 was the longest and deadliest
round of violence in Gaza to date. Over 2 100 Palestinians (of whom 70 %
were civilian according to the UN) and 71 Israelis and one foreigner were killed
(including 5 civilians), 17 000 homes and major infrastructure in Gaza
destroyed, including United Nations Relief and Works Agency (UNRWA) facilities, and nearly 500 000 people were
displaced at the peak of the conflict.

The EU
condemned the indiscriminate firing of rockets into Israel by Hamas and
militant groups in the Gaza Strip and reiterated that all terrorist groups must
disarm. At the same time the EU condemned the loss of life of hundreds of
civilians, including many women and children, and emphasised that the Israeli
military operation must be proportionate and in line with international
humanitarian law.

The EU fully supported
Egyptian efforts to broker a ceasefire and stressed the need for a durable and
comprehensive solution to the conflict. In particular, it stressed that this
should:

·
lead to a fundamental improvement in living conditions in Gaza,
through unimpeded humanitarian access and the lifting of the Gaza closure
regime;

·
end the threat posed to Israel by Hamas and other militant groups;
and

·
address the broader context of the Middle East Peace Process and
the situation in the West Bank.

The EU
engaged extensively with both Israel and the PA, and offered to contribute
significantly to a comprehensive solution, including through Common Security
and Defence Policy (CSDP) missions on the ground.

The EU
continued to engage with Israel in addressing the critical importance of Area
C[2]
of the West Bank for the viability of a future Palestinian state. The EU
condemned Israeli announcements of planned settlement expansion. It called on
Israel to halt its continued settlement expansion, including in East Jerusalem,
especially in sensitive areas such as Har Homa, Givat Hamatos and Area E1[3]
which poses a severe threat to the two-state solution. The EU also expressed
concern about the trend of demolitions and confiscations of EU-funded
constructions in Area C, such as shelters and latrines, and called on Israel to
reverse its policy.

Israel
halted transfers of the tax revenue it collects on behalf of the PA, when the
PA signed a further 20 international instruments in December 2014.

Israel
continued to face security challenges on many fronts, including hostile actions
by groups in Sinai, Syria and Lebanon during the year. Israeli forces responded
on several occasions to attacks emanating from Syria and Lebanon, and also
carried out pre-emptive cross-border actions. Israel helped to evacuate troops
of the United Nations Disengagement Observer Force to Israel after they were
seized or surrounded by rebel forces on the Syrian side.

In October Israel stepped up
its contribution to international efforts to combat Ebola, sending three
emergency clinics and medical staff to West African high risk areas, and
supplementing the team previously sent to Cameroon. Equipment was sent to
Sierra Leone and personal protection equipment to the African Union.

The 8th meeting of the
EU-Israel sub-committee on political dialogue and cooperation took place in
Brussels on 8 December 2014 where views were exchanged on regional and
international developments.

EU officials participated in public
conferences in Israel on the fight against terrorism, while informal
contacts between the EU and Israeli officials also took place. Israel signed
the Arms Trade Treaty in December 2014.

3.         ECONOMIC
REFORM AND SOCIAL REFORM AND DEVELOPMENT

Economic growth
slowed to 2.9 %[4]
in 2014 from 3.2% in 2013, mostly a result of a fall in exports of goods due to
a strong shekel and a slower-than-expected recovery of external demand. The
moderation of economic activity was also driven by the armed conflict in the
Gaza strip (Operation Protective Edge), which hit tourism receipts. At
the same time, domestic consumption remained robust, supported by the Central
Bank's ongoing accommodating policy. The key policy rate was reduced by a
cumulative 0.75 percentage points in the course of the year to 0.25%. Monetary
policy loosening, which aimed at encouraging economic activity and limiting the
appreciation of the local currency, also reflected the absence of inflationary
pressures. Consumer prices were down by 0.2% year-on-year in December, coming
well below the Central Bank's inflationary target of 1-3%.

Israel’s fiscal position improved
slightly in 2014, with the budget deficit falling to an estimated 2.8 % of
GDP from 3.2 % in 2013. This was achieved mostly as a result of
expenditure cuts, mainly in education and social spending, which more than
offset the increase in defence spending as a result of the military conflict in
the Gaza Strip.

Israel’s labour market remained
relatively stable in 2014, with signs of a slight upswing in employment
towards the end of the year. The unemployment rate was estimated at 5.7 %
in 2014, one of the lowest in the Organisation for Economic Cooperation and
Development (OECD), compared with 6.3 % in 2013. Israel
reported the highest poverty rate (20.9 %) among OECD countries, with the
rapidly-growing Arab-Israeli and ultra-Orthodox Jewish communities continuing
to register the highest rates of unemployment and poverty.

In April 2014 the government
committee on the fight against poverty (the 'Alallouf Committee')
recommended measures worth EUR 1 billion to reduce the poverty rate in Israel
by 50 %. A state comptroller’s report suggested that the government did
not allocate sufficient funds to tackle food security problems and relied too
heavily on non-governmental organisations.

In the area of social
inclusion, the Federation of Trade Unions and employer associations agreed
that employers in the private sector would ensure that at least 3 % of
their employees would be disabled people. The agreement became a statutory
regulation in September 2014 to be implemented within two years, and will apply
to all employers with more than 100 employees. A draft law applying the same
rule to the public sector passed its first reading in the Knesset in July 2014.
It now needs to be reintroduced in the next Knesset to be taken further. The
government approved a similar proposal for the public sector, and decided to
consider an even higher ratio of 5 % as of 2019.

Following the 2013 National
Labour Court’s Decision that it was illegal to oblige employees to retire at
the age of 67, a Supreme Court ruling on the issue is still awaited. In June
the Supreme Court ruled that foreign workers engaged in nursing care who had
resided in Israel for more than ten years should be entitled to the same social
benefits and health insurance rights as Israeli citizens.

In
December the government approved the first allocation of NIS 185 million (EUR
38 million) to a five-year plan for Druze and Circassian communities (with a
total population of approximately 134 000).

4.         TRADE-RELATED
ISSUES, MARKET AND REGULATORY REFORM

The
EU-28 remained Israel’s main trading partner, with a trade in goods amounting to
EUR 30.1 billion in 2014.

In the field of customs, Israel ratified the Convention on
pan-Euro-Mediterranean preferential rules of origin in July. The Convention
entered into force on 1 October 2014. The number of companies attaining
authorised economic operator status increased to 24 while a further 30
companies began the authorisation process.

Regarding sanitary and phyto-sanitary issues, a law
on monitoring of animal feed was approved in March 2014, which will enter into
force in 2016.

In the area of agriculture and rural development, Israel
adopted a new rural development plan for 2015-20 in October, with support from
an ongoing Twinning project.

In January 2014 the Ministry of Finance’s Capital Markets,
Insurance and Savings Division became a signatory to the Multilateral
Memorandum of the International Association of Insurance Supervisors. In June
Israel became the 20th member of the Paris Club of creditors. In August, the
Knesset’s Finance Committee approved for the first time regulations on financial
trading, which, for example, mandated that Israeli brokers must acquire a
licence and limited the maximum leverage offered to traders.

In August 2014 Israel and Germany signed an agreement on the
avoidance of double taxation, based on the OECD model, which replaced an
older agreement between the two countries. In October, Israel informed the OECD
of its intention to join, by the end of 2018, the Common Reporting Standard on
the exchange of information regarding financial accounts for tax purposes. Israel is a Member country of the Global Forum on Transparency and
Exchange of Information and underwent the peer review process being assessed as
"partially compliant".

An EU Twinning project in statistics significantly improved
the coordination role of the Central Bureau of Statistics in relation to other
producers of official statistics and led to improved survey methodologies,
particularly in relation to national accounts and education statistics.

As regards intellectual property rights, Israel amended its legislation
on patent term extension in line with its international commitments.

As regards enterprise policy, the draft law on the Small
and Medium Business Agency remained at the preparatory stage in the Knesset.
The first EU-Israel bilateral dialogue for small and medium-sized enterprises
(SMEs) took place in June, where the parties agreed to continue to exchange
information on SME policies and related activities.

An amendment to the consumer
protection law, enabling the Consumer Protection Authority to impose
financial penalties on offenders, was adopted. The Bank of Israel implemented
recommendations on banking charges, made by an expert committee to
improve competition in the banking sector.

Regarding competition
policy, the Knesset excluded retailers in the agriculture sector from the
antitrust exemption granted to farmers. In April 2014, the Israel Antitrust
Authority announced that it would begin to impose fines on monopolies
controlling more than half of the market share for a given product if they charge
consumers more than 20 % over the production cost.

Concerning public procurement,
changes in Israel’s mandatory tendering regulation entered into force.

5.         COOPERATION ON
JUSTICE, FREEDOM AND SECURITY

Israel made little progress in
improving its legislative and policy framework as regards migration and
asylum management. In September 2014, the Supreme Court cancelled, for the
second time in one year, key provisions of the law on prevention of
infiltration which determines Israel’s asylum policy, declaring them
unconstitutional. This latest ruling came in response to a petition filed
concerning the operation of the open detention centre Holot, run by the Israel
Prison Service, which imposed severe restrictions on the freedom of movement of
asylum seekers who were detained there for an indefinite period. The Court
ruled that Holot should be closed within three months, all asylum seekers there
released and that the confinement of newly arrived asylum seekers for one year
was to be discontinued.

In December the Knesset
adopted the
5th amendment to the Anti-Infiltration Law in response to the September annulment.
Under the new amendment, newly arrived asylum seekers will be detained for
three months in the closed detention centre, Saharonim, and then transferred to
the Holot open detention centre for an additional period of 20 months.
Restrictions on freedom of movement were relaxed under the new law, with a roll
call being held once a day instead of three times a day.

According to official figures
published by the Population, Immigration and Border Authority at the end of
June, only 19 asylum seekers had entered Israel since January. At the same
time, there were 48 212 asylum seekers in Israel (34 193 from
Eritrea, 9 264 from Sudan, 3 253 from other African countries and 702
from other countries). In October there were 2 500 asylum seekers in Holot
(mostly Sudanese and Eritreans) and 255 in Saharonim (Sudanese, Eritreans and
West Africans). Continued inducements were made to such migrants to leave
Israel voluntarily for third countries.

Civil society organisations
raised concerns that there were no guarantees of adequate protection in the
third countries to which migrants were sent. Since the Holot facility was
opened in December 2013, 5 717 asylum seekers had left Israel voluntarily,
with Sudanese nationals being the largest group. The UNHCR questioned the
voluntary nature of these returns as the decisions were taken from within the
detention centre, with USD 3 500 being offered to each person agreeing to
leave. According to reports by the State Comptroller, there was a continued
lack of provision for the basic needs of asylum seekers not held in detention.
Nevertheless, some progress was made in a number of areas. The Ministry of
Health established a mental health clinic, Gesher, in a community centre
for migrants. Many of the clinic’s patients were Sinai torture victims. Israel
took responsibility for unaccompanied minors, placing them in boarding schools.
In February 2014, 221 children of migrant workers, meeting certain criteria,
were granted residency status. The detention of migrants and children without
status awaiting forceful displacement or a decision on their status continued.
The State Comptroller’s 2013 recommendations to correct the shortcomings in the
detention process of children, such as looking for alternatives to detention,
were not implemented.

Israel’s measures to combat trafficking
in human beings continued to be effective. Israel made progress in
identifying the evolution of new patterns of trafficking in Israel, besides
prostitution, including legal migrant workers mistreated by their employees.
Among the estimated 7 000 victims of torture in the asylum seeker
community who were tortured in Sinai on their way to Israel, 200 were recognised
as victims of trafficking and received government support.

A new mechanism for complaints of
torture and ill-treatment was put in place in February 2014. It is subject to
public scrutiny based on the provisions of the Freedom of Information Law. Since
2001, more than 800 complaints of torture and ill-treatment have been received
and processed by the Israel Security Agency. None of these complaints led to a
criminal investigation. No criminal investigations have been started since the
new inspector was appointed.

In the area of money
laundering, Israel’s request to join the Financial Action Task Force was
approved in August. In March 2014 a regulation obliging foreign exchange centre
staff to register clients who make transactions of more than EUR 2 100 was
presented to the Constitution, Law and Justice Committee of the Knesset. A law
making the prohibition of money laundering and financing of terrorism
applicable to lawyers and certified public accountants was adopted by the
Knesset in July. These steps followed a 2013 review by the Council of Europe’s
Moneyval organisation, which had highlighted that Israel was the only member
without a financial reporting mechanism for non-financial bodies such as
lawyers and certified public accountants. The review also pointed to Israel’s
lack of enforcement in the diamond industry and foreign exchange centres.

In the field of drugs,
the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) signed a
Memorandum of Understanding with the Israel Anti-Drug Authority in February.
The corresponding work programme would include steps to enhance monitoring and
knowledge of the drugs situation and responses to it, particularly by
harmonising key indicators in the areas of supply and demand. In July 2014 the
Knesset’s Welfare and Health Committee added 35 substances to the list of
illegal substances managed by the government.

In July an Information Seminar on Council of Europe (CoE)
Conventions was held in Jerusalem. The process to ratify the Convention on
Cybercrime was initiated by the Knesset. Israel was interested in several CoE
Conventions and set up several inter-ministerial working groups to examine the
compatibility of its legislation with CoE legal instruments.

Strengthened cooperation with Eurojust would help facilitate
closer judicial cooperation with the EU.

6.         TRANSPORT, ENERGY, ENVIRONMENT,
CLIMATE CHANGE, INFORMATION SOCIETY, RESEARCH AND DEVEOPMENT AND INNOVATION

Concerning the transport
sector, on the basis of the EU-Israel Comprehensive Aviation Agreement
signed in 2013, a second meeting of the EU-Israel Joint Committee took place in
December. The Joint Committee plays an important role in ensuring the proper
implementation of the agreement, including regulatory convergence, and in
further developing cooperation.

In the energy sector,
the focus of Israel’s offshore gas reserves moved from meeting domestic demand
towards the possibility of supplying neighbouring Jordanian and Palestinian
consumers. In January 2014, the Leviathan field partners signed an agreement
with the Palestine Power Generation Company to provide 4.75 billion cubic
metres (bcm) over a 20‑year period, which would begin when Leviathan
started producing gas. In February 2014, the Tamar natural gas field partners
signed an agreement to supply 1.8 bcm over a 15-year period to two
Jordan-based industrial companies, and in September the Leviathan field
partners signed a letter of intent to supply Jordan’s National Electric Power
Company with 45 bcm over a 15-year period.

Regarding climate change,
Israel showed limited commitment to reducing greenhouse gas emissions. The
freeze on implementing the 2010 national plan for reducing greenhouse gas
emissions in May 2013 continued to make it difficult for Israel to meet the
pledge made in 2009 of a 20 % reduction in its greenhouse gas emissions by
2020. In view of the international negotiations on a 2015 Climate Agreement, a
team of experts was selected in October to assist in setting up a national
greenhouse gas management system. This would include the necessary measures to
meet Israel’s 2020 pledge as well as examine the potential for emissions
reductions and energy efficiency beyond 2020. This would help in the
preparation of Israel’s intended nationally determined contribution (INDC).

An April the government took a
decision to set out the principles for a green licensing law, an action plan
and a timetable for its implementation. This was the result of a successful EU
Twinning project. Following last year’s public consultation on ‘green-washing’,
the Ministry of Environment published its official guide in February
2014. In April the government approved integrated licensing as part of the
green growth strategy, which was expected to bring Israel’s environmental
standards more in line with EU standards. Israel also increased its efforts to
improve its recycling rates. Israel is included in the Pan-European region for
the biodiversity assessment under the Convention on Biodiversity and made
progress on ecosystems-mapping.

Under the EU IMP-MED project,
Israel set up an inter-ministerial working group on integrated maritime
policy (IMP) and developed a national maritime strategy in which
concrete blue economy priorities are identified.

As regards research and
innovation, the then President of the European Commission, José Manuel
Barroso visited Israel in July and witnessed the signing of the agreement
associating Israel to 'Horizon 2020' — the new EU Framework Programme for
Research and Innovation. The agreement entered into force in October with retroactive effect from 1 January 2014. As of December,
eligible Israeli entities had signed 1 621 Seventh Framework Programme
agreements, with the EU’s total contribution exceeding EUR 875 million. Israeli entities remained very active in 'Horizon 2020' - as of
December more than 300 agreements with Israeli entities had been either signed
or under preparation.

In the nuclear field,
the memorandum of understanding with the Israel Atomic Energy Commission (IAEC)
was renewed in April. The 6th Steering Committee between IAEC and the EU Joint
Research Centre took place in Brussels in November.

7.         PEOPLE-TO-PEOPLE
CONTACTS, EDUCATION AND HEALTH

Israel and the European Training Foundation maintained their
strong relationship on vocational education and training. There was
growing interest among Israeli authorities in participating in peer learning
regional studies and activities related to the National Quality Framework,
efficiency and quality of education and training. This resulted in more
structural cooperation based on the Torino Process Reviews.

Israel
participated in the Tempus programme with 13 running projects, in six of
those as coordinator. 270 Israeli students and staff were selected in 2014
within partnerships supported by Erasmus Mundus. Four master students
and one doctoral candidate received scholarships to participate in joint
masters and doctoral programmes. 43 organisations were selected for funding
under the Marie Skłodowska-Curie actions (MSCA) under 'Horizon
2020'. Youth and youth organisations benefited from Erasmus +,
with 283 participants in mobility projects and five in the action for young
people and decision-makers in the field of youth.

In the area of culture, Israel has not yet ratified the
2005 UNESCO Convention on the Protection and Promotion of the Diversity of
Cultural Expressions. Three EU-funded Israeli projects under the programme
"Supporting culture as a vector of democracy and economic growth"
were implemented by Arab and Arab-Jewish organisations. Cooperation on
MedCulture and Euromed Audiovisual programmes continued.

Israel continued to strengthen its cooperation with the EU on public
health issues and its technical collaboration with the European
Centre for Disease Prevention and Control (ECDC) in the framework of an
EU-funded regional project on preparatory measures to support ENP country
participation in ECDC activities. The Israeli Centre for Disease Control
continued to implement the bilateral cooperation arrangement with the ECDC.
Israel participated in the first national ECDC correspondent meeting organised
by the ECDC in May 2014 and its experts participated in the meeting of the EU
vaccine-preventable disease network.

The EU Partnership for Peace projects continued to operate
both within Israel and at cross-border level. One project held a stand-alone
exhibition for around 30 Palestinian companies in Nazareth in June 2014,
supported by local chambers of commerce. A broad coalition of women’s civil
society organisations developed a national action plan on implementing UNSCR
1325 on women, peace and security.

8.         ISRAEL’S
RESPONSIBILITIES IN THE OCCUPIED TERRITORIES

In addition to protecting the security of
Israel and its citizens, Israel has responsibilities as the occupying power in
the territories it occupies, particularly with regard to human rights and
international law, including the proportionate use of force. Settlements
are illegal under international law, constitute an obstacle to peace and
threaten to make the two-state solution impossible. The EU does not
recognise any changes to Israel’s pre-1967 borders (including with regard to
the Golan Heights, the West Bank including East Jerusalem, and the Gaza Strip)
other than those agreed by the parties.

Conflict-related fatalities
increased sharply in 2014, both in Gaza and the West Bank. During the 50-days
military conflict between Israel, Hamas and other Palestinian militant factions
in July and August, over 2 100 Palestinians were killed, including over
500 children. According to UN figures at least 70 % of the deaths were
civilians, while the Israeli Defence Forces (IDF) claimed that no more than 55 %
of the dead were civilians. On the Israeli side, 66 IDF soldiers and six
civilians, including a child and a foreign national, were killed. More than 11 000
Palestinians and over 800 Israelis were wounded.

The IDF claimed it
took steps to avoid civilian casualties, including evacuation warnings and
aborting air strikes where civilian presence was detected. It accused Hamas of
deliberately deploying in civilian areas and of encouraging or forcing
civilians to ignore Israeli evacuation warnings. A number of incidents,
including the shelling of several schools of the United Nations Relief and
Works Agency (UNRWA) used as shelters at the time of the attack, the
destruction of homes of alleged militants resulting in the death of family
members, and artillery shelling of densely populated neighbourhoods raised
serious concerns about respect for international humanitarian law.

The IDF established a fact-finding
mechanism in order to examine ‘exceptional incidents’ during Operation
Protective Edge, identified by the Military Advocate-General. In 2014,
criminal investigations were initiated in five of the cases referred back to
him by the fact-finding teams, while nine cases were closed. In another eight
cases, the Military Advocate General opened criminal proceedings without prior
examination by the fact-finding mechanism. The UN Human Rights Council set up a
commission of inquiry to investigate violations of international law. The EU
will closely monitor the implementation of the mandate and continue to work
towards a balanced outcome of the investigations. Israel criticised the
commission as being biased both in its mandate and the selection of its
members, and decided to abstain from formally cooperating with it. Israel will,
however, cooperate with the Board of Inquiry established by the UN
Secretary-General to investigate Israeli shelling of UN premises which were
used as shelters.

In other conflict-related incidents, 49
Palestinians, including 12 children, were killed and 5 865 injured in the
West Bank, including East Jerusalem (compared with 27 fatalities in 2013). Most
of these deaths and injuries occurred in violent clashes with Israeli forces
between June and August, after three Israeli teenagers were abducted and killed
in the West Bank in June 2014. There followed an Israeli military operation to
locate the perpetrators and the victims, and the revenge killing of a
Palestinian teenager in Jerusalem by extremist Israelis. Between June and
August, around 20 % of all Palestinian injuries were caused by live
ammunition. Before and after the military conflict in July and August, 29
Palestinians were killed and 222 injured in Gaza (compared with 11 fatalities
in 2013).[5]

This makes 2014
the year with most fatalities in the West Bank since 2007 and the deadliest
year in Gaza since the beginning of the conflict.

Settlement
construction and expansion continued, including deep into the West
Bank. A total of 935 housing units were built between January and September
2014.[6]
This figure does not include construction in around 95 outposts, illegal under
Israeli law, but which continued to expand despite the government’s stated
intention to remove those built on private Palestinian land and High Court
decisions ordering their demolition. The government advanced plans for more
than 7 500 housing units and published tenders for 2 405 units in
settlements in 2014, 939 of which were renewed publications of previous failed
tenders. After an undeclared freeze on planning and tenders during the military
conflict in Gaza, the government illegally declared 1 000 acres of land in
the West Bank as Israeli state land, with a view to future settlement
expansion, the largest state land declaration since the 1980s. Six plans for a
new township for Bedouin north-west of Jericho were published which could be
used, if implemented, as a basis for evicting and relocating Bedouin tribes
living in the Jerusalem and Jericho areas, including in the E1 area.

The settlement expansion and the
demolitions of homes, basic infrastructure and the sources of livelihoods
continued to impact on Palestinian communities in the West Bank. This policy
led to a deterioration of living conditions of communities in the West Bank and
entailed the forcible transfer of civilians (e.g. Bedouins).

Settler violence
continued
resulting
in Palestinian casualties and damage to Palestinian property; there were 329
incidents compared with 399 in 2013. Violence against
settlers led
to 237 incidents of Israeli casualties or property damage, compared to 50 in
2013.[7] Very
few cases of settler violence filed with the Israeli police resulted in an
indictment. No official data is available on the number of cases investigated
or prosecuted by a special unit established in 2013 to deal with crime
motivated by nationalism.

At the end of
November 2014, 5 527 Palestinian prisoners and detainees were being held
in Israeli prisons (compared to 4 768 at the end of 2013). Israel
continued to make extensive use of administrative
detention of
Palestinians without trial. There were 461 administrative detainees at the end
of November 2014, a marked increase on 2013 (150 administrative detainees at
the end of the year), mainly due to a wave of nearly 2 200 arrests of
Palestinians in the West Bank, including East Jerusalem, in June and July
following the kidnapping and killing of three Israeli teenagers. A two-month
hunger strike of between 80 and 290 administrative detainees and other
prisoners ended in June 2014 after a deal was reached with the Israeli Prison
Service.

At the end of
November, 156 children were held in Israeli detention facilities as
security prisoners, some 20 % fewer than in January 2013. Almost half of
these were detained in facilities inside Israel. Another 15 were held for being
in Israel illegally. There were continued reports of the ill-treatment of
children under arrest, transfer, interrogation and detention, particularly in
the first 48 hours after arrest, including blindfolding, painful hand ties,
physical violence, lack of adequate notification of legal rights, verbal abuse,
strip searches and solitary confinement while under interrogation. A military
order of September 2014 laid down specific requirements regarding audio-video
recordings and the language used during the interrogation of Palestinian
children, but it does not apply to security offences such as stone-throwing.[8] A
pilot programme of summonses in lieu of night arrests began in February.

Concerning freedom
of religion or belief, Palestinians do not enjoy free access to
Muslim and Christian holy sites in the Old City of Jerusalem. Following a
meeting between Prime Minister Netanyahu, King Abdullah II of Jordan and US
Secretary of State Kerry in Amman on 14 November 2014, access restrictions to
the Hram al-Sharif/Temple Mount for Friday prayers were lifted after and a
number of Palestinians from Gaza were allowed into East Jerusalem for Friday
prayers at al-Aqsa (a step previously only made during Islamic holidays). The
meeting followed an escalation of the friction between Israeli police and
Palestinians in October and November, a special entry regime for West Bank
Palestinians and Jerusalem ID holders during Ramadan and heightened tensions in
Jerusalem since June.

Ramadan arrangements were significantly
more restrictive than the previous year’s access policy, leading to a 90 %
decrease in Palestinian worshippers at the site. Access for Palestinian Christians
continued to be restricted during Orthodox Easter, which coincided with the
Jewish Passover holiday when Israel typically restricts movement and access,
citing security concerns. Nevertheless, the Israeli authorities did take
specific measures to facilitate access, in particular during Muslim religious
holidays, which can also extend to preventing access to the Temple Mount/Haram
al Sharif for non-Muslims, to avoid tensions with worshippers. To preserve the
status quo, the Israeli authorities tried to ensure that non-Muslim worship did
not take place there, a policy that is contested by an increasing number of
religious and nationalist Jewish Israelis, including some Cabinet and Knesset
members. Prime Minister Netanyahu has publicly reiterated Israel’s commitment
to maintaining the status quo.

Palestinian economic and social rights continued
to be severely hampered by Israeli restrictions on movement and access.
In the West Bank, the separation barrier continued to impact livelihoods.
Access to agricultural land across the barrier was obstructed by a system of
‘agricultural gates’, described as bureaucratic and unreliable. Israeli trade
regulations continued to hinder imports of Palestinian products into Israel. In
June 2014 Israel imposed temporary additional restrictions on the West Bank
during a military operation to locate the perpetrators and victims of the
kidnapping and killing of the three Israeli teenagers, particularly in the
Hebron area; these were lifted again in early July. In the case of Hebron,
these restrictions resulted in the prolonged lock-down of the city and
cessation of most economic activities.

Israel announced new measures to ease
restrictions in the West Bank at an ad hoc Liaison Committee meeting on
22 September 2014. These included increasing the number of Palestinian workers
allowed into Israel. Israel also announced its intention to identify 20
factories in Area C which would be authorised to export directly to Israel
under simplified procedures and to approve plans for agricultural development
in Area C. Implementation of these plans will be monitored throughout 2015.

While the immediate concern in Gaza
was reconstruction and addressing the humanitarian impact of two months of
warfare, the economic and physical isolation of the Strip, largely as a result
of continuing Israeli restrictions and the closure of tunnels used for
smuggling between Egypt and Gaza, was the primary obstacle to long-term
economic development. Crossings into Gaza remained open for humanitarian assistance
during most of the military conflict in July and August, returning to
pre-conflict function levels after the ceasefire, with minor easing of exit
permits and increased truckloads of goods due to increased demand.

Palestinian access
to agricultural lands in the access-restricted areas in the vicinity of
the fence between Gaza and Israel improved after the ceasefire, with the areas
reportedly being reduced from 300 to 100 metres from the fence. However, this
has not yet been officially announced, creating uncertainty and putting the
civilian population at risk.[9]

The fishing
zone of six nautical miles from the coast was restored. Following the
ceasefire, Israel, the PA and the UN agreed on a mechanism for importing
construction materials and dual-use goods into Gaza for donor-funded
reconstruction projects and private sector construction needs, subject to
various certification, monitoring and inspection requirements in order to
ensure civilian end-use.

The Israeli
authorities also announced an easing of restrictions on the transfer of
agricultural and fishery products from Gaza to the West Bank. As a result,
137 truckloads entered the West Bank from Gaza in November and December 2014.
Such transfers were at a fraction of their 2007 levels.[10]

Palestinian property
rights continued
to be violated. The Israeli authorities demolished 581 Palestinian residential
and non-residential structures in Area C and in East Jerusalem, displacing 1 177
people (compared with 663 structures demolished and 1 103 people displaced
in 2013).[11]
In August 2014 Israel resumed its policy of punitive demolition of homes of
Palestinian terrorists or terrorist suspects in the West Bank, including
East Jerusalem. In some cases, this made others living in the area homeless.
Petitions against the policy were rejected by the Israeli High Court of
Justice. In its bilateral dialogue with Israel, the EU continued to urge the
government to end its policy of punitive demolitions.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

[1] This
designation shall not be construed as recognition of a State of Palestine and
is without prejudice to the individual positions of the Member States on this
issue.

[2] Area C
refers to 62 % of the occupied Palestinian territory in the West Bank that
remains under full Israeli military and administrative control.

[3] Area
E1 refers to the area located in the West Bank between Jerusalem and the
Israeli settlement of Ma’ale Adumim. The land in question comprises about 12 km2.

[4] For sources and detailed figures, see
Statistical Annex accompanying the reports; figures without sources are
forecasts by Commission services.

[5] All figures provided by the UN Office of
the Coordinator for Humanitarian Affairs (OCHA).

[6]
Source: Israeli Central Bureau of Statistics. These statistics do not provide
figures for East Jerusalem.

[7]
OCHA.

[8]
Military Court Watch.

[9]
OCHA and Gisha (Legal Centre for Freedom of Movement).

[10]
Gisha.

[11]
OCHA.

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