RAMALLAH,  Feb. 26 (JMCC) - A relatively minor ruling on a customs issue has big implications for the status of the settlements in European Union policy, reports Der Spiegel.

The case involves an appeal filed by the German filter and dispenser company Brita against a decision by the Hamburg Finance Court that it needed to pay customs duties on water-carbonating machines and syrup made by Soda-Club, which is based in Maale Adumim, the largest Israeli settlement in the Palestinian-administered areas of the West Bank.

The company labeled the products as Made in Israel and claimed that they should consequently be exempt from customs duties. But in 2002, Hamburg's main customs office questioned the practice and contacted their Israeli counterparts to find out where exactly the products were made. When the response came, it said that they had been made in an area under Israeli customs administration. When the Hamburg agents wrote back, asking whether the products had actually been manufactured in Israeli settlements, they received no response. So the Germans slapped a duty on the products.

The Hamburg court ruled that imposing the duties was permissible, whereupon Brita appealed the decision. The appeals court in Hamburg, in turn, asked the European Court of Justice to issue a preliminary ruling that would settle the issue for all 27 EU member states.

The EU backs a separate state for the Palestinians and has refused to formally recognize Isreal's claims to Maale Adumim and other settlements. At the same time, the EU is the second-largest market for Israeli goods, after the United States. In 2008, Israeli companies exported €12 billion ($16.2 billion) in goods to Europe. An estimated one-third of these goods are either fully or partially made in the occupied territories.

Products manufactured by Israel's settlements in the occupied Palestinian territories have come under intensified fire over the past few months. The Palestinian Authority, under the leadership of Prime Minister Salam Fayyad, has taken the initiative to free the markets under its control of all goods produced in Israeli settlements.

Furthermore, civil protests have been held in which over $1 million in such goods were stripped from the shelves in the West Bank and publicly burned. A campaign is being waged by Fayyad's office to prevent any settlement goods from entering Palestinian markets.

His office is also attempting to push through legislation aimed at keeping settlement products out of Palestinian markets by making the action a criminal offense punishable by heavy fines and even jail time.  

The Palestinian Authority is not alone in this effort. A global initiative has been underway for years centered on boycotting Israeli products, specifically those made in Israel's settlements. Similar efforts--inspired by actions taken against South African Apartheid--have been aimed at divestment from Israeli companies and universities, and sanctions against the Israeli state.