U.S. Labeling Rules Already Bar 'Made in Israel' Tag for West Bank

In his winery nestled in the rocky red hills of the central West Bank, Amichai Lourie prepares a shipment of award-winning vintage destined for the American market. On the labels, which carry Laurie’s signature, the winery clearly states that the product is “Made in Israel.”

In fact, Lourie’s wine comes from territory occupied, but never annexed, by the Jewish state. Nevertheless, “For many people, when you buy wine from Shiloh Winery, you are buying from the heart of Israel,” Lourie explained, alluding to the historic claims many in Israel make for the West Bank. “The reason why I say ‘Made in Israel’ is because it is made in Israel. That is it.”

But that is not how American law sees it.

According to an April 1995 U.S. Customs and Border Protection notification, products made in the West Bank or Gaza “shall be marked as ‘West Bank,’ ‘Gaza,’ or ‘Gaza Strip’… and shall not contain the words ‘Israel,’ ‘Made in Israel,’ ‘Occupied Territories-Israel’ or words of similar meaning.” Moreover, it states, “Failure to mark an article in accordance with the requirements…shall result in the levy of a duty of 10 percent” of the product’s value.

Responsibility for complying with this rule, which stems from a law passed by Congress in 1995, rests with the exporter and with the company importing the goods in question into the United States for distribution.

Yet when asked if he had heard of the American regulations on labeling, Lourie said, “I know nothing about that.” And indeed, when products from Lourie’s Shiloh Winery reach the shelf of a suburban Maryland kosher supermarket some 5,000 miles later, the 2012 chardonnay boasts its Judean Hills origin with a “Product of Israel” label as it rests at the center of the store’s kosher wine aisle.

Even as Israel and many of its supporters decry new European Union rules that require clear labeling for products made in exclusively Jewish West Bank settlements, few are focusing on this American regulation — and for understandable reasons: Though it has been on the books for two decades, the law on which this Customs regulation is based appears to be barely enforced, if at all.

But this may about to change. After 20 years during which the rule rested practically dormant in the Federal Register, Customs, without providing any explanation, issued a reminder on January 23 about it, reiterating the prohibition on marking West Bank products as being made in Israel.

“The purpose of this message is to provide guidance to the trade community,” the Customs note, posted on the agency’s on-line announcement board, states. The note also observes that its reminder “in no way supersedes prior rulings or regulations, nor does it impose additional requirements” on products from the West Bank, Gaza or Israel.

The reminder could be a result of recent interest in the 1995 regulation expressed by a major human rights report, several advocacy organizations and the press. It is not clear, however, if it will be followed by stricter enforcement of the rule.

Katrina Skinner, a spokeswoman for the U.S. Customs and Border Protection, said the agency enforces the rule. She declined to comment on specific products from the West Bank that the Forward documented with “Made in Israel” labels.

“On average, CBP receives from 800 to 1,000 e-Allegation submissions from the public each year. Each allegation receives a thorough analysis and enforcement actions are recommended, if warranted,” she said but declined to comment on whether CBP has ever investigated or taken punitive measures against violators of the labeling rule relating to the West Bank. Skinner noted that CBP “does not comment on specific investigations or enforcement actions.”

To be sure, there are important differences between the origin and intent of the U.S. regulation and the one in Europe that Israelis are raging against: While the European move is viewed by Israel as discriminatory and aimed at excluding settlement exports, the 1995 American law aimed to boost the Palestinian economy. Moreover, it had the blessing of the Israeli government, then under the leadership of the dovish Labor Party leader Yitzhak Rabin.

The Customs regulation’s origin dates back to the 1993 Oslo Accords, which laid out the framework for reaching a peace agreement between Israel and the Palestinians. Exports from settlements were practically nonexistent at the time, and the Clinton administration, wishing to help Palestinians in the newly formed Palestinian Authority, supported the law in order to encourage Palestinian exports. The law and its implementing regulations enabled Palestinian businesses to sell their products in America under their own identity rather than having to declare Israel as the goods’ country of origin.

But crucially — and unlike the E.U. — the Customs regulation defines its requirements geographically, not ethnically. It makes no distinction between products made by Palestinians and those from Jewish settlements. As amended in 1997, the regulation specifies the acceptable formulations of the country of origin label, citing the following options: “West Bank/Gaza,’’ ‘‘West Bank/Gaza Strip,’’ ‘‘West Bank and Gaza,’’ ‘‘West Bank and Gaza Strip,’’ ‘‘West Bank,’’ ‘‘Gaza’’ and ‘‘Gaza Strip.”

Several organizations have recently begun to take on the issue. The U.S. Campaign to End Israeli Occupation tried to raise awareness on Capitol Hill to the existing rule and the fact that it is not being adequately enforced. The group’s policy director Josh Ruebner wrote in December that enforcing the existing Customs regulation would be “an important and necessary step to put teeth behind five decades of rhetorical yet feckless U.S. opposition to Israel’s illegal settlements.”

Nancy Kricorian manages CODEPINK’s campaign targeting Ahava Dead Sea company, which the group claims illegally profits from the West Bank resources. She said the recent reminder issued by Customs is the U.S. government’s way of “sending a message” to importers. “I hope, however, that they do more than send a message — I hope they enforce their own regulations about accurate labeling of settlement goods,” she said.

Exports from Israel’s West Bank settlements to the United States are small in volume, though no official estimate exists. They focus mainly on specialty products. Key among these are products from the region’s nascent wine industry, which benefits from the unique soil characteristics of the Judean mountains. The wine producers themselves often like to boast on their bottle labels about their geographic location, and many American kosher wine consumers respond favorably. Alongside Shiloh winery, a reporter’s random stroll through the wine aisle in a suburban Maryland kosher market turned up wines made by the Psagot winery in the Benjamin region east of Jerusalem, and Ugav wines, manufactured by Jerusalem Wineries in the Atarot industrial zone in East Jerusalem. All were marked as made in Israel.

Several other products from Jewish settlements have drawn significant sporadic protests from pro-Palestinian groups, which have launched boycotts against them and pickets of the stores that carry them. One of these products, Ahava Dead Sea cosmetics, is manufactured from mud and silt drawn from the Dead Sea in an Israeli factory located nearby, but on the West Bank side of the Green Line that separates the territory from Israel proper. These products, the Forward found, are sold in New York department stores with a label stating that they are made in the “Dead Sea, Israel.”

Another company, SodaStream, a popular home soda making device, moved its manufacturing plant into Israel proper from the West Bank in 2014, following protests, though the company claimed it relocated for other reasons.

Europe, which differentiates between products of Palestinians and those of Jewish settlers, also requires similar labeling for products exported from the Golan Heights, an area that Israel occupied from Syria during the 1967 war. In 1981, the Knesset also voted to formally apply Israeli civil and criminal law to all residents living in the Golan, but the international community continues to regard it as occupied territory whose final status must be resolved through negotiation.

The Obama administration has made clear that it does not view the European requirements for labeling settlement products as a form of boycott against Israel.

If presented today for implementation, the obscure American customs regulation would likely cause a stir in Congress and elsewhere. Moreover, a broader move now taking place on the federal and state level could, in effect, serve as a counterweight to efforts aimed at distinguishing settlement products from those made in Israel proper. Legislation in Congress and in six state legislatures being debated in recent months has included language that blurs any distinction between products made in Israel and those produced in West Bank settlements, and makes the case that this distinction should be viewed as an attempt to boycott Israel.

The bills, supported by the American Israel Public Affairs Committee and other pro-Israel groups, have been presented as measures to get America behind the fight against attempts to boycott Israel. But they view Israeli products from both sides of the Green Line equally, effectively doing away with a distinction that has been integral to U.S. policy for years.

Yet AIPAC says it has no problem with the law already on the books mandating “West Bank” labels for West Bank products. “This long standing Customs policy, in contrast to the actions of the European Union, was not intended to stigmatize Israeli products but to merely facilitate duty free access to the U.S. market for Palestinian goods,” said AIPAC spokesman Marshall Wittman. “It does not distinguish among manufacturers in the territories.”

“I expect us to see the ‘settlements equal Israel’ language inserted into many congressional actions from now forward,” said Lara Friedman, director of policy and government relations at Americans for Peace Now. Her group supports boycotting products from the settlements but has taken no action regarding the Customs labeling requirements. APN spokesman Ori Nir said that if investigations show the regulations are being ignored, the organization will call on U.S. authorities to step up enforcement. “We hope that the reminder issued January 23 by U.S. Customs is a signal that enforcement, if it has not been rigorous, is now going to improve,” he said.

A recent report by Human Rights Watch, titled “Occupation, Inc.,” has taken issue with the economic impact of settlement-based businesses, arguing that they contribute to Israeli violations of Palestinian rights. The report noted the U.S. Customs regulation prohibiting West Bank products from being labeled as “Made in Israel,” but it states, “Nonetheless, settlement businesses continue to label settlement products as ‘Made in Israel.’”

Meanwhile, the impact of the new E.U. labeling rules is already evident. Shiloh Winery missed its usual Christmas and New Year’s business in Europe because importers put off buying their seasonal shipments until given instructions on how to label the wine.

Labeling wines going to America as “Made in the West Bank,” Lourie said, would cause further harm to his business. “It is harmful to me because I believe I’m in Israel now,” he said. “If you say to me, ‘No, you are not part of Israel,’ it is harmful.”

Contact Nathan Guttman in Washington at guttman@forward.com or on Twitter, @nathanguttman

Naomi Zeveloff reported from the West Bank. Contact her at zeveloff@forward.com or on Twitter, @NaomiZeveloff

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