http://www.europeanvoice.com/article/2012/may/an-unsettling-situation/74328.aspx 

An unsettling situation

By Bill Van Esveld  -  11.05.2012 / 12:55 CET

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What the EU should tell Israel, and itself, about settlements, trade and the destruction of EU aid.

What should Europe do about Israel's construction of settlements and destruction of Palestinians' homes and other property on the West Bank? When the Foreign Affairs Council discusses this issue on Monday (14 May), its priority should be to replace the current, incoherent approach with a strategy based on clear principles. Europe provides millions of euros in humanitarian aid to Palestinians harmed by Israel's settlement policies. These same policies have hindered aid efforts: the Israeli military has destroyed European-funded projects, and imposes planning restrictions that have reduced European donors to assisting Palestinians rendered homeless.
At the same time, however, Europe allows some products made in illegal settlements preferential, tariff-free entry to its markets.
EU laws prohibit preferential treatment for goods produced in violation of international law in this way, but Europe allows Israel to bundle goods from illegal settlements with goods from inside Israel, and to ship the whole lot to European markets tariff-free. Rather than clearly stating the actual origins of all its exports, Israel merely provides the originating postal codes. The job of spotting settlement goods is left to importers, yet some settlement goods bear the misleading codes of corporate headquarters inside Israel.
Nor has Europe adequately enforced consumer-protection laws, intended to ensure that people can make informed choices about what they buy, when it comes to labelling settlement products in its markets.
Europe should also insist on Israeli compliance with international humanitarian law when it comes to humanitarian and development aid to Palestinians. The law requires Israel to facilitate, not obstruct, aid to people in occupied territory.