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US group threatens UK tax agency with legal action over Israeli settlement trade

Created at 5 Sep · 3:06 PM1 source↑ Market-relevant
IN SHORT

A US legal group has threatened litigation against the UK's HM Revenue and Customs (HMRC), alleging it has allowed goods from Israeli settlements to enter the country tariff-free, violating trade rules. The group claims HMRC's verification system is flawed.

Key Numbers

30,000export documents examined by Global Echo
4years of investigation by Global Echo
8years of Israeli shipments to the UK and EU examined
1in 6 shipments contained produce from illegal settlements
42percent falsely labelled as Israeli-grown
357invoice declarations analyzed by Global Echo
5companies identified as routinely sourcing from settlements
87percent of Labour members support a ban on trade with Israeli settlements
6percent of Labour members oppose a ban on trade with Israeli settlements

Who's Involved

Global Echo Litigation Center
US-based non-profit legal group threatening litigation against HMRC
HM Revenue and Customs (HMRC)
UK tax agency accused of allowing illegal settlement goods into the country
Leigh Day
Law firm representing Global Echo in its letter to HMRC
US group threatens UK tax agency with legal action over Israeli settlement trade

↳ Why This Matters

This legal threat highlights ongoing international scrutiny of trade practices related to Israeli settlements and puts pressure on the UK government to enforce its trade rules more stringently, potentially impacting diplomatic and economic relations.

Key facts

  • A US legal group, Global Echo Litigation Center, has threatened legal action against the UK's HM Revenue and Customs (HMRC).
  • The group alleges that goods from Israeli settlements, including those in the occupied West Bank, have entered the UK tariff-free.
  • A four-year investigation by Global Echo found that some shipments were falsely labelled as Israeli-grown.
  • The letter to HMRC claims the system for verifying the origin of Israeli products is flawed.
  • Global Echo is calling for increased checks on imports declared as Israeli.

A US-based non-profit legal group, Global Echo Litigation Center, has threatened legal action against Britain's HM Revenue and Customs (HMRC) for allegedly allowing goods from Israeli settlements to enter the UK tariff-free. According to a letter sent in July by law firm Leigh Day, agricultural products from Israeli settlements, including those in the occupied West Bank, have been entering the UK in breach of trade rules. Some goods labelled as Israeli were produced in occupied Palestine, contravening UK guidelines that require such products to be clearly labelled as originating from settlements to avoid misleading consumers.

Although the UK has a free trade agreement with Israel, Israeli settlement goods do not qualify for preferential tariff treatment. Global Echo's four-year investigation, examining over 30,000 export documents for thousands of Israeli shipments to the UK and EU over eight years, found that one in six shipments contained agricultural produce originating from illegal settlements in occupied Palestinian territories and the Syrian Golan Heights. At least 42 percent were falsely labelled as Israeli-grown.

The letter, seen by Sky News, accused HMRC of failing to determine the real source of UK imports, describing the system used to verify the origin of Israeli products as "flawed." Global Echo stated that goods produced in settlements have "unlawfully benefitted" from reduced import duties. The non-profit called on HMRC to classify imports declared as Israeli as high risk and strengthen checks to ensure compliance with trade rules.

There is mounting pressure on the British government to adopt stronger measures on Israel amid rising settler violence and Israeli plans to expand illegal settlements. Polling of Labour members earlier this year showed that 87 percent support a ban on trade with Israeli settlements.

Frequently asked questions

The main allegation is that HMRC has failed to stop goods from Israeli settlements from entering the UK tariff-free, in breach of trade rules.

Global Echo cites a four-year investigation examining over 30,000 export documents, which found that a significant portion of shipments from settlements were falsely labelled as Israeli-grown.

UK guidelines require such products to be clearly labelled as originating from settlements to avoid misleading consumers, and they do not qualify for preferential tariff treatment under the UK's free trade agreement with Israel.

What Happens Next

01HMRC is expected to respond to the legal threat from Global Echo Litigation Center.
02The UK government may announce new policies regarding trade with Israeli settlements in September.

How It Developed

A US-based legal group, Global Echo Litigation Center, has threatened litigation against the UK's HM Revenue and Customs (HMRC).
The group alleges HMRC has allowed goods from Israeli settlements to enter the UK tariff-free.
A letter from law firm Leigh Day, representing Global Echo, stated that agricultural products from Israeli settlements have been entering the UK in breach of trade rules.
The letter accused HMRC of failing to determine the real source of UK imports, describing the system as "flawed".
Global Echo's investigation found that a significant portion of shipments contained produce from illegal settlements, falsely labelled as Israeli-grown.
The group called on HMRC to classify imports declared as Israeli as high risk and strengthen checks.

Sources

T1
UK tax agency threatened with legal action over Israeli settlement trade, says reportMiddle East Eye

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