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Support for Trade with Settlers?

Norwegian authorities can not answer whether goods from settlers in Palestine or Western Sahara are given a customs reduction on arrival in Norway.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Norwegian authorities can not answer whether goods from settlers in Palestine or Western Sahara are given a customs reduction on arrival in Norway.

                                                            (First published in Norwegian 11 Sept 2008)
By Erik Hagen
Norwatch
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Both Israel and Morocco have occupied areas that do not belong to them. Neither Norway nor the rest of the international community recognises the two countries’ annexation of Palestinian, Syrian, and Western Sahara’s areas. Nevertheless, goods from illegal settlements find their way to Norwegian consumers. That’s not all: it is impossible to ascertain whether goods are also given a customs reduction when they reach the Norwegian market.

Settlers have become an important tool for Israel and Morocco in consolidating their occupations. Today there are Israeli settlements on the West Bank, the Golan Heights, and East Jerusalem, all occupied in 1967. Morocco, for its part, has moved thousands of Moroccans into Western Sahara after the occupations in 1975 and 1979.

Just in the course of the first half of 2008, 149 new settlements and 96 so-called outposts are to have been built in Palestinian areas, according to the newspaper Observer. Morocco has proclaimed large development projects in occupied Western Sahara. In July the authorities announced that they would build 22,000 new dwellings south of Western Sahara’s largest city, El Aaiun.
Several of these settlements are kept alive by exporting goods to the European market.

When Israel and Morocco trade with other countries, they also make sure to export goods made by these settlers. These include agricultural products such as sweet peppers, avocados, melons, tomatoes, and herbs plus, in several cases fishery and industrial products. Without being aware of it, Norwegian consumers may thus buy vegetables or fruit from illegal settlements, even though the goods are innocently labelled “Israel” or “Morocco”.

From 1 January to 1 August 2008 the customs authorities registered import from Israel amounting to 55,2 million euro. From Morocco the corresponding import amounted to 40,1 million euros. It is not possible to say how much of this originated from occupied areas.

Free Trade
It is not only possible that Norway imports such products, but it is also possible that we support the trade by giving customs reductions on the settlers’ products.

In the 1990’s Norway entered into free trade agreements with Israel and Morocco. The agreements gave Norwegian importers the possibility of applying so-called preferential customs duty on goods they import – in other words, lower customs than normal. For some products there is full customs exemption.

These agreements were set up through the EFTA free trade collaboration, and it involves goods produced within the borders of Norway and Israel/Morocco, respectively. But the agreements left it to Israel and Morocco to define their own borders. Thereby these two countries have, through the free trade collaboration, been able to freely export goods produced in settlements that are in conflict with international law. 

Norwegian authorities claim that the occupied areas are not included in the free trade agreements and that if the importers receive preferential customs duty on goods from these areas, then it is because the company has illegally reported wrong country of origin. In practice it is impossible to ascertain what the authorities are doing to prevent preferential customs duty being applied to wrongly labelled goods that reach the country.

The European Commission is paying close attention to ensure that the EU countries do not support commerce with Israeli settlements by means of customs reductions.

But few check what Norway does.

With regard to import from Israeli-occupied areas, Norway lags behind the EU, both with regard to information about how much checking is carried out, what kind of checking is carried out, and how often it is revealed that importers have cheated by declaring incorrect place of origin for the goods.  

Bypassed
It is in the collaboration with Israel that the European customs controls have gotten furthest. In 2005 the EFTA countries and Israel reached agreement on a kind of precision of the free trade agreement, a so-called technical arrangement. In the two-page document Israeli customs authorities instruct the country’s own companies to label their products better, so that it will be easier for Norway and EFTA to exclude goods from occupied areas from their free trade collaboration.

Even though this in theory could put a partial stop to Norwegian trade with the settlements, and even though it is referred to by several people as a political defeat for Israel, the arrangement has not been mentioned at all in the Norwegian press after it was entered into. The text, which was given a very conspicuous placement on the web pages of the Israeli customs authorities in 2005, has been paid no attention by political interest groups or the media in Norway and has not even been mentioned on a single Norwegian web page.

Through this arrangement Israel directs its own producers to insert the postal number of the place of production conspicuously on the documents of origin that accompany every shipment. In practice, it should therefore be possible to ascertain whether the goods are produced on recognised Israeli territory.

This arrangement was entered into half a year after the EU had done the same. In the EU a long-standing political debate and extensive pressure on Israel preceded the establishment of the system. 

To check that the free trade collaboration is now honoured, the European Commission has compiled a survey of postal numbers in Israel, and they know exactly which numbers are within and which are outside Israel’s recognised borders. In this manner the EU countries’ customs authorities can, by taking a quick look at the product’s certificate of origin, disclose whether it was produced on Israeli or occupied land. The commission puts pressure on member countries to check that they do not give customs preference to illegal settlements and on Israel to label the certificates correctly.

Norway is not under pressure by the EU commission, and here we can do what we want.

The importer does the registring
When a Norwegian importer receives a shipment from abroad, the company itself must register the shipment electronically with the Norwegian customs authorities. Sometimes one enters the kind of product and how much one has imported, and the country it originates from. For imports from Morocco and Israel one must, moreover, write that one is entitled to preferential customs duty in accordance with the free trade agreement.

The prerequisite for obtaining preferential customs duty is that one has a certificate of origin that has arrived in Norway together with the shipment. On the Israeli certificates it is now stated, black on white, in which postal district the goods were produced.

But there is a catch. This certificate is not automatically sent in to the customs authorities, and there is no required blank space in the electronic registration form to enter which Israeli postal district or Moroccan city the goods were produced in. On the contrary, the importer is supposed to keep the certificate, and it is to be sent on only if the local customs region requires an a posteriori check.

So, the question is: how often do the customs authorities actually check these certificates of origin – and what methods do they use? Do they check the postal numbers entered on the Israeli certificates?

Strong EU Control
In the EU country Sweden it is at least done. Importers in Sweden must satisfy the same requirements as in Norway. They have to register the import electronically and send the certificate of origin in for a posteriori checking by the customs authorities.

“The European Commission has made strict demands that we carry out checks on goods from Israel. So there is much that is checked. It is not 100%. But in comparison with the total import from Israel, it is a very large part,” Hans Petter Ohlsson, head of the Swedish a posteriori customs department, told Norwatch.

He believes that it is especially fruit and vegetables that are checked.

“One of the methods is that we check the certificates of origin against the postal number lists from Israel,” Ohlsson confirms. This is the main method that EU countries follow.

“It is fraud if the goods are actually from the occupied areas, and the importer demands preferential customs duty,” Ohlsson told Norwatch.

In Great Britain, too, the checking is extensive. In the period from the corresponding EU-Israeli technical arrangement came into force on 1 February 2005 until 30 June 2008 the British customs authorities, HM Revenue and Customs (HMRC), have rejected preferential customs duty for as many as 529 Israeli certificates from illegal settlements, HMRC spokesman Jan Marszewski told Norwatch.

The British minister responsible for revenue and customs matters, Jane Kennedy, said in Parliament earlier this year that the British have rejected certificates from Israeli settlements in the period 1 February 2005 to 31 January 2008 amounting to 338,000 British poundss.

The Customs Authorities Do Not Know
It is impossible to say whether the Norwegian checks are as systematic as those in the EU.

Moreover, it is impossible know what is being done to prevent that goods from Israeli- and Moroccan-occupied areas are given preferential customs duty when they arrive on the Norwegian market. The reason seems to be that the customs authorities in Norway wish to keep their information to themselves and will not reveal which methods they utilise in checking.

“We carry out checks on certificates of origin from Morocco and Israel, but we do not want to describe in detail how often and the exact method,” Reidar Knutsen, adviser in the Customs Section for Economic Control, told Norwatch.

“If we have indications that it is a matter of goods that are not produced in line with origin regulations or suspect that the goods are from other places, then we can send the certificate to the customs authorities in the country of dispatch and ask them to verify it,” Knutsen said. He does not wish to say whether they check the certificates of origin against the EU commission’s address book of tabooed postal numbers.

Even to be able to ascertain how often they have exposed errors in the certificates, as the British do, is almost impossible. The reason is that the Norwegian data systems can not sort information on checks and control results by country.

To work this out would be a large-scale manual task, according to the customs authorities.

What is clear is that the customs authorities in Norway generally do not expose many errors at all with regard to place of origin.

For 2007 the post-clearance assessment amounted in an extra customs duty of 40.100 euros. For 2006 the amount was somewhat larger: around 113111 euros. This was the total sum of all incorrectly reported goods from all parts of the world.

Nor can the Ministry of Finance, under which the customs authorities sort, answer the question of the extent or the methods used to check Israeli and Moroccan certificates.

It is, in other words, impossible to ascertain from Norwegian authorities what is being done to prevent that illegal settlements sell their products in Norway with preferential customs duty.