Review: Eugene Kontorovich, State Practice on Economic Dealings with Occupied Territories

[from 2015]

In State Practice on Economic Dealings with Occupied Territories, Eugene Kontorovich sets out to prove that state practice does not substantiate claims of an international law norm prohibiting third-state public or private involvement in an occupying power’s economic activities in occupied territory. Other scholars have previously considered the issue and have reached that conclusion.[1]

This conclusion rests on the fact that the international law doctrine of non-recognition of de facto regimes whose sovereignty over the territory in question is internationally denied (“nonsovereign regimes”) has multiple and widely-varying interpretations. These interpretations agree only that diplomatic or consular relations with the illegal regime are prohibited and that recognition of ministerial acts of the nonsovereign regime (records of births and deaths, marriages and divorces, and ordinary commercial transactions) is permitted. Between those two extremes, there is a wide range of public and private acts (including state-facilitated private acts) that reasonably may, or may not, be understood to imply recognition of a nonsovereign regime.

The 2013 EU funding guidelines on settlement entities and activities offer a robust interpretation of the non-recognition doctrine.[2] Under this interpretation, EU funding for Israeli entities based in the oPt or Israeli activities conducted in the oPt would constitute implied recognition of Israeli sovereignty in the oPt. Kontorovich nowhere argues that the EU’s interpretation of the non-recognition doctrine is an unreasonable one. He merely claims that international law, as defined by state practice (including the EU’s own practice towards other occupation regimes), does not compel that interpretation. 

The EU does not claim otherwise. Article 1 states that the Guidelines are meant to “ensure the respect of EU positions and commitments in conformity with international law on non-recognition by the EU” of Israeli sovereignty over the OPT.[3] The guidelines bring EU practice into line with EU policies, which policies comply with – even if not strictly compelled by – international law on non-recognition.

The Crawford legal opinion, which Kontorovich cites, endorses this flexible construction of the duty of non-recognition:

[T]he obligation [of non-recognition] has an inherent flexibility that will permit (or, at least, not expressly prohibit) the acceptance of acts which do not purport to secure or enhance territorial claims, but which as a result of their commercial, minor administrative, or “routine” character, or which are of immediate benefit to the [protected local] population, should be regarded as “untainted by the illegality of the occupation.”[4]

Crawford gives as an example of a recognizable commercial act “untainted” by the illegal Israeli regime “the sale of milk from a local settlement store (whether to settlers or Palestinian persons).”[5]  Thus, for Crawford, that the store is located within an illegally-established settlement, draws water from Palestinian sources, employs settlers, or pay taxes to the government that maintains the illegal regime does not compel non-recognition of its commercial transactions. In other words, Crawford finds no duty of non-recognition towards commercial transactions that confer  indirect, routine, or unavoidable support for the illegal regime.  

For purposes of the Guidelines, the “act” in question is not the activities of settlement enterprises, but EU funding of those activities. Applying Crawford’s definition, the question is whether EU funding to entities established or operating within the occupied territories should be regarded as “untainted” by the illegal situation due to its commercial, minor administrative, or routine character. That answer is clearly no. The EU funding instruments affected by the Guidelines cannot be said to provide “indirect, routine or unavoidable” support to Israeli entities and activities in the oPt because their purpose – harmonizing Israeli law, policy, and activities with the EU acquis – clearly implies recognition of Israeli authority in the areas covered.  For example, the EU launched in March 2013 a twinning project between Israel, Italy and Germany to harmonize European and Israeli law on rural diversification and promote agricultural tourism in Israel.   Project activities funded by the EU, implemented by the Italian and German agricultural ministries, and conducted in Israeli agricultural settlements in the Jordan Valley would clearly be seen to enhance Israeli territorial claims to those areas.  Likewise, the participation of a settlement regional council in an public-administration exchange clearly presupposes recognition of the regional council’s authority over the territory it administers. Projects of these sort would clearly implicate Article 16 of the ILC Articles on Responsibility of States for Internationally Wrongful Acts, which holds a State (or international organization with legal personality, like the EU) responsible for aiding or assisting “with knowledge of the circumstances of the internationally wrongful act.” 

Further, one suspects that Kontorovich’s exclusive focus on state practice is a concession to the sufficiency of the opinio juris identifying non-recognition as a customary international law norm.[6]

The article also contains several misleading factual statements regarding the state practice of economic relations with other occupied territories. For example, Kontorovich claims that “neither the EU nor its member states have ever suggested that European companies should not engage in commercial activities with Turkish firms involved in the occupation of North Cyprus.” (p. 13.) He fails to mention that in 2009, the High Court of England and Wales held that customary international law, as reflected in the sovereignty and territory provisions of the Chicago Convention, prohibits the British government from licensing a Turkish carrier to operate flights from the UK to occupied Northern Cyprus.[7]

Similarly, Kontorovich claims that European companies are active in Moroccan-occupied Western Sahara “with no discouragement from their home countries.” (p. 6.) Norway, concededly an EFTA member state rather than an EU member, has long maintained an official policy discouraging Norwegian business from conducting business in Western Sahara.[8] Following that policy, the Government Pension Fund of Norway has divested from several companies based on their exploitation of natural resources in Western Sahara.[9]

Footnotes

[1] The most notable of these studies is the James Crawford legal opinion commissioned by the British labor union TUC, entitled Third Party Obligations with respect to Israeli Settlements in Occupied Palestinian Territories (Jan. 24, 2012) (hereinafter “Crawford Opinion”).   

[2] Guidelines on the eligibility of Israeli entities and their activities in the territory occupied by Israel since June 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards, 2013/C 205/05, 19 July 2013 (“Guidelines”).

[3] Id., art. 1.

[4] Crawford Opinion at p. 22, para. 51.

[5] Id.

[6] The opinio juris is borne out in the following instruments:

●      1949 International Law Commission Draft Declaration on the Rights and Duties of States, art. 11 (“Every state has the duty to refrain from recognizing any territorial acquisition by another State acting in violation of Article 9”);

●      1970 Declaration on Principles of International Law Concerning Friendly Relations and Cooperation Among States in Accordance with the Charter of the United Nations, para. 10 (“No territorial acquisition resulting from the threat or use or force shall be recognized as legal.”);

●      General Assembly Resolution 3314 on the Definition of Aggression, art. 5, para. 3 (“No territorial acquisition or special advantage resulting from aggression is or shall be recognized as lawful.”); and

●      2001 International Law Commission Draft Articles on the Responsibility of States for Internationally Wrongful Acts, art. 41(2) (“No State shall recognize as lawful a situation created by a serious breach within the meaning of article 40 [jus cogens violations], nor render aid or assistance in maintaining that situation.”).

[7] Kibris Türk Hava Yollari v. Secretary of State for Transport [2009] EWHC 1918 (Admin) (July 28, 2009).

[8] Government Pension Fund of Norway – Global, Petroleum Fund Council on Ethics,  Recommendation on exclusion from the Government’s Pension Fund’s investment universe of the company Kerr-McGee Corp., http://www.regjeringen.no/pages/1662901/KMG%20eng%2011%20april%202005.pdf (April 11, 2005), at 3 (“The [Norwegian] Ministry for Foreign Affairs has also, on several occasions, expressed the view that Norwegian companies should avoid participating in economic enterprises in this area because such involvement might be seen to make Moroccan claims on Western Sahara more legitimate.”)

[9] These companies include the US-based oil exploration firm Kerr-McGee (excluded in 2005 and reinstated in 2006 after the company discontinued the offending operations) and two phosphate producers, US-based FMC Corporation and Canadian-based Potash Corporation of Saskatchewan (excluded in 2011).