European Commission proposes suspending trade preferences for Israel, imposing sanctions against Hamas and others

he European Commission proposes suspending certain trade provisions of the Israel-EU Association Agreement, which would deprive Israeli imports of preferential access to the EU market and impose tariffs at the level applicable to any other third country that does not have a free trade agreement with the EU. It also proposes imposing new sanctions on Hamas and extremist ministers.

The proposals were adopted on Wednesday in Brussels at a meeting of the College of European Commissioners, the European Commission reported.

“Following the announcement of President von der Leyen in her State of the Union address, the European Commission presented today its proposal to the Council to suspend certain trade-related provisions of the Association Agreement between the EU and Israel (‘the Agreement’) as well as its proposals for sanctions on Hamas, extremist ministers and violent settlers,” the press release reads.

The European Commission noted that the suspension concerns the core trade-related provisions of the Agreement, and in practice means that imports from Israel will lose their preferential access to the EU market. These goods will therefore be charged duties at the level applied to any other third country with whom the EU has no free trade agreement.

In addition, the Commission is also putting on hold its bilateral support to Israel, with the exception of support to civil society and Yad Vashem [Yad Vashem - the Holocaust Museum in Israel]. “Concretely, this affects future yearly allocations between 2025 and 2027, as well as ongoing institutional cooperation projects with Israel and projects funded under the Regional EU-Israel cooperation facility,” the European Commission explained.

The European Commission said the proposals followed a review of Israel's compliance with Article 2 of the agreement, which found that the actions taken by the Israeli government constituted “a breach of essential elements relating to respect for human rights and democratic principles.” “This entitles the EU to suspend the Agreement unilaterally,” the press release reads.

“Specifically, this breach refers to the rapidly deteriorating humanitarian situation in Gaza following the military intervention of Israel, the blockade of humanitarian aid, the intensifying of military operations and the decision of the Israeli authorities to advance the settlement plan in the so-called E1 area of the West Bank, which further undermines the two-state solution,” the European Commission detailed.

Commenting on the decision, European Commission President Ursula von der Leyen said: “The horrific events taking place in Gaza on a daily basis must stop. There needs to be an immediate ceasefire, unrestrained access for all humanitarian aid, and the release of all hostages held by Hamas. The European Union remains the biggest donor of humanitarian aid and an unwavering champion of the two-state solution. Reflecting these principled commitments, and taking into account serious recent developments in the West Bank, we propose to suspend trade concessions with Israel, sanction extremist ministers and violent settlers, and put bilateral support to Israel on hold, without affecting our work with Israeli civil society or Yad Vashem.”

This decision must be adopted by the EU Council by a qualified majority and will enter into force on the date of its adoption. Following the decision, the EU-Israel Association Council will be notified of the suspension, which will take effect 30 days after notification to the Association Council.

Regarding sanctions against Hamas, extremist Israeli government ministers, and violent settlers, the proposal package consists of four draft legal acts with nine proposals for designation of ministers and settlers (in accordance with the EU's Global Human Rights Sanctions Regime), as well as an enhanced package of measures against ten Hamas politburo members, based on the new designation criterion under the Hamas sanctions regime. This decision must be approved unanimously by the Council.