A non-profit legal organisation has threatened to take HM Revenue and Customs (HMRC) to court, alleging that agricultural goods produced in Israeli settlements are being imported into the UK while receiving preferential tariff treatment intended for Israeli goods.
The Global Echo Litigation Center has instructed law firm Leigh Day to correspond with HMRC over what it claims are failures in the way the UK authorities verify the origin of agricultural products imported from Israel.
According to correspondence seen by Sky News, the organisation alleges that goods produced in Israeli settlements in the occupied West Bank and the Golan Heights have entered the UK labelled as originating in Israel.
Under the UK’s trade arrangements, goods produced in Israeli settlements do not qualify for the same preferential treatment as goods originating in Israel.
Global Echo claims its investigation identified what it describes as a wider problem with the declaration of the origin of agricultural products.
The organisation said it examined 357 invoice declarations and identified five companies which it alleges regularly source agricultural goods from Israeli settlements but declare their origin as Israel.
According to the group, the alleged practice includes mixing settlement produce with Israeli products, declaring settlement postcodes while identifying the country of origin as Israel, or using what it describes as proxy addresses inside Israel.
The July letter from Leigh Day reportedly argues that HMRC’s existing processes for checking the origin of Israeli agricultural imports are inadequate.
Global Echo said the alleged failures have allowed settlement products to “unlawfully benefitted” from preferential tariff treatment.
The organisation’s June report claimed that approximately one in six shipments it investigated contained agricultural products originating from Israeli settlements in the occupied Palestinian territories or the Syrian Golan Heights.
It further claimed that at least 42% of those products had been mislabelled as Israeli-grown.
What is Global Echo asking HMRC to do?
The organisation is calling for Israeli agricultural imports to be treated as high-risk shipments.
It wants HMRC to take what it describes as “reasonable steps” to verify claims that products qualify for preferential treatment because they originated in Israel.
It is also calling for HMRC to review its verification procedures and introduce what Global Echo describes as risk- and intelligence-based enforcement of Israeli agricultural imports.
The organisation has indicated that it could pursue legal action if its concerns are not adequately addressed.
HMRC response
HMRC has disputed the characterisation of the correspondence as a formal legal notice before proceedings.
In its response, the tax authority said the letter from Leigh Day did not constitute a formal written notice before court proceedings and argued that no specific HMRC decision had been identified that could be challenged by Global Echo.
HMRC also said that providing some of the information requested could involve disclosing confidential taxpayer information.
An HMRC spokesperson told Sky News:
“We do not comment on potential litigation nor on the tax or customs affairs of individual customers.”
The allegations made by Global Echo have not been established by a court.
Why does it matter?
The dispute centres on the distinction between goods produced inside Israel and goods produced in Israeli settlements in territory occupied by Israel.
The UK government has long opposed Israeli settlements in the West Bank, considering them contrary to international law and a threat to a two-state solution.
The issue has become increasingly politically sensitive as settlement construction and expansion have continued.
The UK government is also expected to announce further measures concerning trade with Israeli settlements this month, according to Sky News.
For British consumers and businesses, the dispute raises questions about how effectively the origin of imported agricultural products is being checked and whether goods from settlements are receiving trade benefits to which they are not entitled.
Any legal proceedings against HMRC could ultimately require the courts to consider the extent of the tax authority’s responsibilities in verifying the origin of imported goods and enforcing the UK’s trade arrangements.
BPE News will continue to follow developments if legal proceedings are formally launched or HMRC announces changes to its checks on Israeli agricultural imports.
Sources
- Sky News — reporting on the Leigh Day correspondence, Global Echo’s allegations and HMRC’s response.
- HM Revenue & Customs (HMRC) — comments regarding potential litigation and customs/taxpayer confidentiality.
- Leigh Day — legal correspondence sent on behalf of the Global Echo Litigation Center.
- Global Echo Litigation Center — investigation and June report concerning the alleged origin of Israeli agricultural imports.
- UK Government — policy position on Israeli settlements and their status under international law.