As the IDF operation in Gaza reaches its peak, leveling what is left of the winter enclave, the European Commission is proposing the partial suspension of the EU-Israel Association Agreement on trade-related issues, as well as the imposition of sanctions against two far-right ministers in Benjamin Netanyahu's government, EU High Representative Kaia Kalas announced today.

"I want to be very clear, the goal is not to punish Israel. The goal is to improve the humanitarian situation in Gaza," said K. Kalas during a press conference in Brussels.

In particular, the Commission proposes to suspend the key trade-related provisions of the Agreement. This means in practice, among other things, that imports of goods from Israel into the EU will be subject to duties at the level applicable to any other third country with which the EU does not have a free trade agreement.

The Commission is also suspending its bilateral support to Israel, with the exception of support to civil society and Yad Vashem. In particular, this affects future annual budgets between 2025 and 2027, as well as ongoing institutional cooperation projects with Israel and projects funded under the EU-Israel regional cooperation mechanism.

The EU Council (member states) must approve the decision by qualified majority.

The Commission's proposals follow a review of Israel's compliance with Article 2 of the Association Agreement, which found that the actions taken by the Israeli government constitute a breach of essential elements relating to respect for human rights and democratic principles. This gives the EU the right to unilaterally suspend the Agreement.

What is it about?

Specifically, the violation concerns the rapidly deteriorating humanitarian situation in Gaza following Israel's military intervention, the blockade of humanitarian aid, the intensification of military operations and the decision of the Israeli authorities to advance the settlement plan in the so-called E1 area of the West Bank, which further undermines the two-state solution.

In addition, the European Commission today proposed sanctions against extremist Israeli government ministers under the EU's Global Human Rights Sanctions Regime. These include Minister of National Security Itamar Ben-Gvir (former Minister of Defence) and Minister of Finance Bezalel Smotrich. New sanctions are also proposed against violent settlers, namely three individuals and six entities.

At the same time, the Commission is proposing sanctions against ten members of Hamas' political bureau.

The EU Council must adopt the sanctions decision unanimously. The Council has so far listed nine individuals and five entities linked to violent extremism in the West Bank and East Jerusalem, as well as obstructing humanitarian aid in Gaza.

Trade between the European Union and Israel

Regarding EU-Israel trade relations, it is worth noting that the EU is Israel's largest trading partner, accounting for 32% of Israel's total trade in goods with the world in 2024. Israel is the EU's 31st largest trading partner. Total trade in goods between the EU and Israel in 2024 amounted to approximately €42.6 billion.

EU imports from Israel amounted to €15.9 billion, with the main imports being machinery and transport equipment (€7 billion, 43.9%), chemicals (€2.9 billion, 18%) and other manufactured goods (€1.9 billion, 12.1%).

EU exports to Israel amounted to €26.7 billion and were mainly machinery and transport equipment (€11.5 billion, 43%), chemicals (€4.8 billion, 18%) and other manufactured goods (€3.1 billion, 11.7%).

Trade in services between the EU and Israel amounted to €25.6 billion in 2023 (the EU imports €10.5 billion and exports €15.1 billion). However, trade in services is not affected at all by today's Commission proposal.

It is recalled that in her State of the Union 2025 address on September 10, 2025, the President of the European Commission, Ursula von der Leyen, announced that the Commission would propose a partial suspension of the Association Agreement with Israel on trade matters.

Today, European Commission President Ursula von der Leyen said: The horrific events taking place in Gaza on a daily basis must stop. There must be an immediate ceasefire, unrestricted access for all humanitarian aid and the release of all hostages held by Hamas. The EU remains the largest humanitarian aid donor and a staunch supporter of the two-state solution.

Reflecting these principled commitments and taking into account the serious recent developments in the West Bank, we propose to suspend trade concessions with Israel, impose sanctions on extremist ministers and violent settlers, and suspend bilateral support for Israel, without affecting our work with Israeli civil society or Yad Vashem.