The European Commission announced Wednesday it will ask member states to suspend key trade provisions of the EU-Israel Association Agreement and impose sanctions on Israeli government ministers – right-wing lawmakers Itamar Ben-Gvir and Bezalel Smotrich – as well as violent settlers, citing breaches of human rights commitments.
Video: EU commissioner Ursula von der Leyen speaks at the EU Commission meeting / Reuters
The proposed measures would strip Israeli goods of preferential access to European markets, subjecting them to standard third-country tariffs. The move affects €42.6 billion in annual bilateral trade, with the EU serving as Israel's largest trading partner, importing some 6 billion euro worth of goods annual.
Commission President Ursula von der Leyen asked the commission to adopt the measure and according the press release, the action responds to the "rapidly deteriorating humanitarian situation in Gaza and Israeli settlement expansion in the West Bank's E1 area that further undermines the two-state solution."
"The horrific events taking place in Gaza on a daily basis must stop," von der Leyen stated. "There needs to be an immediate ceasefire, unrestrained access for all humanitarian aid, and the release of all hostages held by Hamas."
The Commission based its decision on a review concluding Israel violated Article 2 of the 2000 Association Agreement, which requires respect for human rights and democratic principles. The review specifically cited Israel's military operations in Gaza, restrictions on humanitarian aid access, and settlement expansion decisions.
Financial and trade implications
Under the suspension, Israeli exports worth €15.9 billion annually – including machinery, chemicals and manufactured goods – would lose duty-free status in EU markets. The Commission will also freeze €6 million in yearly bilateral support and €14 million in cooperation projects, though funding for Israeli civil society and Yad Vashem will continue.
The proposals require different approval thresholds in the Council of the European Union. Trade suspension needs qualified majority support and would take effect 30 days after notification to the EU-Israel Association Council. Sanctions on individuals require unanimous Council approval.
Sanctions package details
The sanctions target ministers under the EU's Global Human Rights Sanctions Regime, as well as 10 Hamas politburo members. The measures include asset freezes and travel bans.
Since December 2020, the EU has sanctioned nine individuals and five entities linked to West Bank violence and humanitarian aid obstruction under its human rights sanctions framework.
Next steps
EU member states must now vote on the Commission's proposals through the Council. The trade suspension could be implemented within weeks if approved, while sanctions require unanimous consent from all 27 member countries.
The move represents the most significant EU action against Israel since the October 7 Hamas attacks and subsequent military response in Gaza. Israel remains the EU's 31st largest trading partner, with machinery and transport equipment dominating bilateral trade flows.
