The European Commission has approved Israel's proposal to mark the origin of its exports to EU member countries, indicating whether goods are produced within Israel or in the territories.

According to the new agreement, the EU will impose customs duties on Israeli goods originating in the territories - including on fresh produce and processed food items - since the EU does not include these goods in its customs exemption on Israeli products. Goods exported to the EU from companies and factories located in the territories have been subject to delays while customs duties were determined, but this problem has now been resolved.

According to Israeli press reports, Ehud Olmert, Israseli minister of industry and trade, the ministry is drawing up a plan to insure exporters for damages resulting from trading rights.

This plan would compensate exporters for an estimated $8 million in customs duties on the $150m of Israeli exports that originate in the territories. Ministry sources commented that the compensation is a form of insurance payment and not an export subsidy, which is banned under the World Trade Agreement, to which Israel is a signatory.

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