publication last July of the EU guidelines on the eligibility of Israeli
entities for funding took the Israeli mission in Brussels by
While the EU side has clarified the meaning of the guidelines,
the Israeli ministry, under its deputy minister, seems to have blown them out of
What basically is a technical text has become a pretext
for Israel to politicize its implementation and recklessly damage EU-Israeli
The guidelines shouldn’t of course have come as a surprise
to Israel since, basically, they express a long-held EU position on the status of
the occupied territories.
A good starting point to understand the EU
position is to read the Council conclusions of December 10, 2012, on the Middle
East peace process. The guidelines also refer to them.
The objective is a
comprehensive negotiated peace based on the two-state solution. Consequently EU
will not recognize any changes to the pre-1967 borders other than those agreed
by the parties.
In the meantime, it goes without saying that the EU
doesn’t want to fund any Israeli entities or activities in the territories. It
has been estimated that this amounted to only 0.5% of all funding in the past.
The purpose of the guidelines is to prevent this from happening in the future by
clarifying the rules and making them enforceable.
This legitimate purpose
doesn’t exclude the existence of some anti-Israeli bias on behalf of those
members of parliament who pressed for the guidelines or the NGOs who have been
advocating them. An example of this is that the guidelines mention Gaza among
the ineligible territories.
As everyone knows, Israel has withdrawn from
It’s hardly accurate to designate Gaza as “occupied” by Israel. The
Gaza strip is ruled by Hamas and there are no Israeli entities there who can
apply for funding.
When the guidelines were first mentioned in media last
July, well in advance of their entry into force on January 1, 2014, the
impression was that the timing of their publication was intended to put pressure
on Israel in the peace process. In fact the timing was linked with the
discussion which took place among the EU institutions on the new Horizon 2020
regulation which replaces the 7th Framework Program on Research.
were European members of parliament who linked the parliament’s approval of
Horizon 2020 to the adoption of the Commission’s eligibility
The issue was introduced via a proposed amendment to an
article in the draft regulation on Horizon 2020 penalizing any entity which
might have dealings with the occupation.
The parliament wanted the
Commission to produce the guidelines so that it could agree to drop the
amendment and give a green light only with a reference to the guidelines in a
The amendment was kept in the draft of the regulation until the end
of June when an agreement was reached so that the Horizon 2020 legislative package
could be processed further for adoption by the parliament and the Council in
Why then have the guidelines become a sticking point in
the relations between Israel and EU? After all the guidelines don’t exclude
Israeli entities in Israel proper from applying for EU funding for activities
inside Israel although they might have ties with entities in the territories or
carrying out other activities there.
As is explained in Frequently Asked
Questions (FAQ) at the website of the EU representation in Israel, to be
eligible, a company applying for a grant needs to be established in Israel’s
pre-1967 lines. In addition, the entity can only apply for EU funding for an
activity that takes place inside the 1967 lines or for an activity that is
carried out in the occupied territories but that aims to benefit protected
persons or promote the Middle East peace process in line with EU
An entity with branches in the occupied territories is not
excluded. Natural persons residing in the territories aren’t excluded from
working for eligible Israeli entities. The guidelines don’t forbid
subcontracting by eligible grant beneficiaries to entities in the occupied
territories in conformity with procurement rules.
Export from occupied
territories isn’t affected at all.
There is no limitation of exports to
the EU of products produced in the settlements but they don’t benefit from
exemption from customs duties. An agreement on rules of origin of Israeli
products was reached already in 2004 so it’s difficult to see why the issue of
labeling should be confused with the eligibility rules.
In case of EU
funding in the form of loans, Israeli entities which operate in both Israel and
the occupied territories will be considered as not eligible. However, the vast
majority of EU funding to Israel is in the form of grants.
concern is the declaration on honor. According to the guidelines, entities
applying for EU funding would have to declare that they aren’t registered in the
territories and that no part of the activity they are applying for takes place
there. That is of course fair.
In media however you get the impression
that Israeli entities when applying for EU funding would have to declare that
they have no ties whatsoever with the occupied territories. This is a gross
misinterpretation according to the EU external action service and contradicts
the wording in the guidelines.
By repeating the misinterpretation the
Israeli ministry of foreign affairs is obstructing a solution and damaging
Another misunderstanding is that the guidelines
would require the Israeli government to agree to that all future agreements with
EU will state that the occupied territories don’t belong to Israel. That’s
far-fetched to say the least.
The guidelines aren’t supposed to be a
model for other agreements. Perhaps certain funding regulations might include
references to them but more specific references to eligible territory in new
agreements would need to be negotiated.
It’s noteworthy that despite the
disagreements on the interpretation of the EU guidelines business between Israel
and EU seems to continue as usual. Two weeks ago, a large EU delegation headed
by Vice-President Antonio Tajani, Commissioner for Industry and
Entrepreneurship, visited Israel to enhance even further trade and research
cooperation. Currently the total annual trade between EU and Israel is € 29,6
During his visit, Tajani, according to media reports, tried to
calm down the Israeli side and assure Israel that a solution would be found to
the guidelines. Someone who apparently didn’t feel reassured was deputy minister
of foreign affairs, Ze’ev Elkin, who told media about his fears that the issue
wouldn’t be solved.
What interest does the ministry of foreign affairs
have in obstructing a solution at the expense of the current fruitful and
intensive EU – Israel relations in research, innovation and trade?The author is
a former official in the European Commission where he worked in DG Enlargement
as policy coordinator for public administration reform in the candidate