HMRC threatened with legal action over products entering tariff-free from illegal Israeli settlements

As Israeli authorities and settlers move to annex more Palestinian land, a non-profit group is threatening to sue the UK government's tax agency for allegedly allowing products from illegal Israeli settlements to enter the United Kingdom tariff-free.

The Global Echo Litigation Centre, a non-profit legal group dedicated to using litigation to take on Israeli occupation, wrote to HM Revenue and Customs (HMRC) saying that agricultural goods from these illegal settlements in areas like the occupied West Bank entered the UK while violating trade rules.

A four-year investigation by the non-profit found that some products that were labelled “Israeli” actually came from the occupied Palestinian territories. After the findings, the group slammed HMRC's process for verifying the origin of Israeli products as “flawed".

In correspondence seen exclusively by, a letter from law firm Leigh Day, representing the non-profit, said the flawed process meant settlement products “unlawfully benefitted” from tax treatment.

"Our client believes HMRC’s approach to compliance and enforcement regarding such imports to the UK risks leaving the preferential tariff system open to misuse," Tom Short, solicitor at Leigh Day, told The New Arab.

"Global Echo is calling on HMRC to investigate specific examples of potential concern which it has highlighted.”

Short noted that the non-profit identified "systemic problems with incorrect declarations and import invoice information related to imported goods originating in illegal settlements which may be allowing preferential tariffs to be claimed across Europe".

In response to the allegation, a spokesperson for HMRC said that the department does “not comment on potential litigation nor on the tax or customs affairs of individual customers”.

While imports from settlements are meant to be tariffed upon entering the UK, Israeli products reportedly enter without having to pay any extra charges in what the letter says is a “failure” by HMRC.

The letter noted five companies and found almost 360 invoice declarations which altered the origin of the agricultural products.

Global Echo is calling on HMRC to view Israeli imports as “high risk”, which would cause the government department to “take reasonable steps” to ensure that the rules are being followed, as well as to properly scrutinise future claims on Israeli agricultural imports.

In a response letter seen by Sky News, HMRC said the letter is not a formal written notice before starting court proceedings, and Global Echo did not identify a specific agency decision that would be legally challenged.

The legal threat comes as tensions boil between the United Kingdom and Israel over the latter’s continuing moves to further entrench control over the occupied Palestinian territories.

After the UK vowed sanctions against Israeli settlements, Israel threatened a harsh response.