Israel supplies the postcodes the EU uses to deny settlement goods preferential tariffs.
Under a 2004 technical arrangement, Israeli origin certificates identify production sites, distinguishing settlement goods from exports made in Israel without either side conceding sovereignty.
Israel has not annexed the West Bank as a whole. The Supreme Court holds that territory under military administration lies outside the state, with commanders deriving authority from the law of belligerent occupation, not sovereignty.
Pre-1967 local law and military orders govern; even settlement councils derive authority from orders incorporating Israeli municipal law.
Israeli legislation does not apply automatically: the Knesset renewed regulations in 2023 that apply specified laws to Israeli residents personally, not territorially.
The Central Bureau of Statistics counts West Bank Israelis in the national population but classifies Judea and Samaria separately from Israel’s six districts.
Under Oslo, Israel transferred defined civil and policing powers in Areas A and B to the Palestinian Authority, retained specified security responsibilities, and reserved borders and settlements for final-status negotiations.
The International Court of Justice, the UN’s principal court, identified duties in its 2024 advisory opinion to distinguish dealings with Israel from those involving the West Bank, east Jerusalem, and Gaza and withhold assistance sustaining what it deemed an unlawful Israeli presence there.
It imposed no blanket ban on defense procurement from sovereign Israel. Tariff preferences, settlement-import bans, and defense-supplier exclusions require distinct legal bases.
Ireland instructed its defense ministry not to buy Israeli military equipment; its tender rules allow it to reject Israeli and other third-country bids on defense and security grounds.
Germany’s Israeli Arrow 3 achieved initial operational capability, enabling ballistic-missile interception beyond the atmosphere. These are national choices, not an EU arms embargo.
Europe was Israel’s largest regional defense market in 2025, accounting for 36% of a record $19.2 billion in signed export agreements. Those contracts sustain research, industrial capacity, and the IDF’s force buildup.
Europe needs Israeli defense capabilities; Israel needs European technology, components, and industrial capacity.
By October 2026, British and Canadian arms manufacturers had asked Israeli firms to identify production sites, raw materials, and subcontractors beyond the Green Line, the pre-1967 armistice line.
A settlement-made component does not determine the origin or legality of a system assembled in sovereign Israel, but can trigger contractual or regulatory scrutiny. Prime contractors, financiers, and insurers may exclude suppliers rather than verify compliance.
A seal costing a few hundred dollars can jeopardize a multimillion-dollar defense contract; replacing it in a missile, aircraft, or communications system may require months of requalification, disrupting Israeli production and delaying deliveries to European forces.
Under the US military-aid agreement, spending American assistance on Israeli production is being phased out by 2028, steering orders towards US plants and risking Israeli jobs and wartime industrial capacity. That is a strategic mistake.
Settlement-origin exposure calls for the reverse: move production into sovereign Israel or qualify alternative suppliers without sacrificing domestic capacity.
Israel’s security is the objective; a supplier’s location is a means. If relocation preserves military capability, expertise, wartime capacity, IDF supply, and operational freedom, it is a supply-chain decision.
Restrictions on equipment that may be used in Gaza are different: export controls govern supply; the laws of war govern use. Israel must obey those laws, but cannot submit its lawful defense to foreign approval or sacrifice essential capabilities for a contract.
Keeping production in the West Bank, despite a viable alternative, is a political choice the government may make, but must own its cost, not disguise it as military necessity.
Defending Israel's sovereignty
Beyond procurement, Israel’s 2021 Horizon Europe research agreement excludes territories brought under Israeli administration after June 5, 1967, without prejudicing its position on their status.
The EU’s 2011 data-adequacy decision, retained after its 2024 review, permits certain civilian personal-data transfers but recognizes only Israel as defined under international law.
Both exclude east Jerusalem and the Golan Heights, where Israel has applied its law. The adequacy decision does not authorize operational police-data exchanges.
Europol, the EU’s law-enforcement agency, has a 2018 arrangement with Israel permitting strategic exchanges and liaison, not routine transfers of suspects’ personal data or investigative records.
A draft initialed in September 2022 covered terrorism, organized crime, and cybercrime, but excluded use of European information in territories brought under Israeli control in 1967, subject to exceptions for imminent threats to life and criminal investigations.
The Council Legal Service, the EU Council’s legal advisers, objected to those exceptions under EU and international law, citing Palestinian self-determination and policing powers transferred under Oslo.
Israeli intelligence protects Europe against threats unrelated to Israel or Jewish communities. In 2018, an Israeli diplomat confirmed that the Mossad, Israel’s foreign intelligence agency, helped Denmark thwart an Iranian plot to assassinate a dissident.
Israeli reports also credited the agency with helping French, Belgian, and German authorities foil a bombing at an Iranian opposition rally near Paris, and linked its warning to Danish raids against suspected jihadist cells in 2019.
In November 2025, Austrian investigators seized five handguns and 10 magazines from storage in Vienna, allegedly intended for attacks on Jewish and Israeli institutions.
The following month, Italian authorities uncovered an alleged €7 million Hamas-financing scheme involving charities.
Israeli intelligence aided the Italian investigation, which was coordinated with Dutch authorities through Eurojust, the EU agency supporting cross-border prosecutions.
These operations relied on national, case-specific channels, not routine EU-Israel data transfers. Eurojust agreements permit systematic exchanges of case information and evidence, as well as the appointment of liaison prosecutors.
A warning can cross a border. A prosecution needs a lawful chain of evidence.
The European Commission proposed talks in 2020 subject to territorial exclusion; the Council authorized them in 2021. By September 2026, the EU had signed agreements with Armenia, Bosnia and Herzegovina, and Lebanon, but not Israel.
National channels may warn of imminent threats from the West Bank; a Europol agreement cannot automatically authorize using EU-origin personal data there. Any lawful emergency procedure must be agreed beforehand.
The EU and Israel should conclude separate Europol and Eurojust agreements, backed by one Israeli law binding every recipient of European personal data, including security agencies and onward recipients, to agreed territorial, purpose, retention, and onward-transfer restrictions under independent oversight.
Both must comply with EU and international law, including fundamental-rights and data-protection safeguards. Exceptions require mutual consent and prior authorization where applicable; emergency procedures, if lawful, need independent oversight and auditing.
Israeli law alone cannot resolve EU legal objections. Israel retains its final-status positions and lawful powers over independently obtained intelligence.
To distinguish the West Bank from sovereign Israel is to defend Israel’s sovereignty, not condemn it.
Secure, negotiated borders are an Israeli strategic interest: they establish jurisdiction, delimit security responsibilities, and anchor enduring partnerships.
The writer is founder & principal of Line of State, an international strategic practice for strategic affairs, government relations, and public power. He previously served as vice president of external relations at Israel Aerospace Industries (IAI) and as chief of staff to its chairman.