Malta missing from EU push for Israeli settlement trade ban

Malta was not among 11 EU countries backing a simple majority move to push the European Commission to propose trade restrictions on goods from illegal Israeli settlements, leaving the initiative three member states short of the votes needed to move forward.

Malta instead favours a unanimous foreign policy decision, a route considered impossible to achieve, while insisting it is not blocking restrictions if other countries pursue the trade route.

The initiative proposes the  introduction of trade restrictions on goods originating from Israeli illegal settlements in the occupied West Bank, where Palestinians face increasing settlement expansion, land seizures, settler violence, demolitions and restrictions on movement, with international organisations warning of growing human rights concerns.

It was discussed ahead of and during the Foreign Affairs Council meeting of 13 July, where EU foreign ministers debated options for restricting imports from the illegal settlements.

The omission is significant because the qualified majority route is considered more achievable than a unanimous decision among all EU governments, which is the path favoured by Malta.

With 27 member states, a qualified majority requires the backing of at least 15 countries, meaning four additional governments would still be needed for the proposal to pass, assuming the required population threshold of 65% is also met.

Moreover, if 14 member states had supported the push for trade restrictions, this would have forced the European Commission to act and table a proposal aimed at banning imports from the occupied West Bank.

Instead, Malta has argued that restrictions on settlement goods should be adopted through the EU’s Common Foreign and Security Policy (CFSP), where decisions require unanimity among all member states.

The difference between the two approaches has become central to the debate. A trade-based measure could be approved despite opposition from some governments, while a CFSP decision would allow any single member state to prevent agreement.

An official government source said Malta believes restrictions on settlement goods are fundamentally political decisions and should therefore be addressed through the CFSP framework, which would provide greater legal certainty.

However, the same source insisted that Malta’s position should not be interpreted as opposition to restricting imports from illegal settlements.

The government source added Foreign Minister Chris Fearne had no intention of obstructing efforts to achieve the objective of stopping imports from illegal settlements through trade restrictions.

The government source explained EU foreign policy chief Kaja Kallas had asked member states for preliminary feedback and presented a number of possible options.

“We were asked and we replied,” the source said, arguing that Malta had simply indicated its preferred legal avenue rather than taking a position against the proposed trade restrictions. 

Asked whether Malta’s stance contradicted its historical opposition to Israel’s occupation of Palestinian territories and violations of international law, the source categorically rejected the suggestion.

“There is no political positioning in our stance. We just stated our preferred avenue but are not obstructing other avenues,” the source said. Moreover, Malta fully supports the overall aim of stopping imports from the illegal settlements.

EU divided over legal route

The dispute has exposed a deeper split within the European Union over both the proposed restrictions and the legal basis for adopting them.

Several member states have pushed for stronger action over Israeli settlement expansion and the humanitarian situation in Gaza, while others remain reluctant to support measures that could be viewed as economic sanctions against Israel.

Countries pushing for the trade route include Belgium, France, Ireland, Luxembourg, the Netherlands, Spain and Sweden, while opponents include Germany and Italy.

“Everyone knows that the unanimity requirement would mean it will never happen because countries such as Germany and the Czech Republic reflexively back Israel. So those insisting on unanimity are effectively opposing any action. And the Council Legal Service has been clear that the qualified majority option is possible,” Martin Konečný, director of the European Middle East Project (EuMEP), an independent organisation based in Brussels that focuses on EU policy regarding the Israeli-Palestinian conflict, told MaltaToday.

Konečný said Malta’s position was surprising given its previous alignment with EU countries supporting Palestinian statehood and international law.

He noted that Malta had backed the 2024 ICJ Advisory Opinion, which found that states have obligations to avoid trade relations that help sustain the occupation, and had joined initiatives with Spain and Ireland in support of Palestinian rights.

He added that even governments traditionally viewed as more pro-Israel, such as Sweden’s, supported restrictions on trade with settlements.

The legal dispute

The legal dispute centres on whether restrictions on settlement goods should be treated as a foreign policy measure requiring unanimity or as a trade measure that can be adopted through qualified majority voting.

At the Foreign Affairs Council in June, the Council Legal Service reportedly argued that restrictions could fall under EU trade powers and therefore be adopted through qualified majority voting.

Kaja Kallas referred to this legal interpretation during the July Foreign Affairs Council, saying there were different legal opinions but that the Council’s own legal service had concluded that the measure could proceed through qualified majority voting because it concerned trade.

However, she acknowledged that the issue remained politically unresolved, saying the EU had so far failed to reach a unified position.

“There is a legal opinion that we can do this also with the qualified majority – the Council’s legal service has said that – and if there is a will, then we can move forward,” Kallas said.

Trade precedents strengthen QMV argument

Supporters of the trade route also point to a growing body of EU precedents where measures with clear foreign policy implications have nevertheless been adopted under the bloc’s Common Commercial Policy rather than through the CFSP framework.

Article 207 of the Treaty on the Functioning of the European Union has been used for trade restrictions aimed at upholding human rights and international obligations, including bans on goods produced through forced labour, restrictions on products linked to torture, conflict minerals regulations, controls on dual-use items and the Anti-Coercion Instrument, which allows restrictions on trade, investment and financial services.

More recently, the EU has used trade powers to impose geographically targeted restrictions, including measures against Russian gas imports and tariffs on Russian and Belarusian agricultural products and fertilisers, despite the wider geopolitical implications of those decisions.

Rather than relying on the CFSP sanctions framework, which requires unanimity, restrictions were adopted through EU trade and energy legislation, allowing them to proceed through qualified majority voting despite differences between member states.

Supporters of a similar approach for settlement goods argue that the EU could use its commercial powers to impose restrictions without requiring agreement from every government.