Netherlands adopts trade restrictions on goods originating from unlawful Israeli settlements amid broader international action

Introduction

In the absence of a coordinated EU-wide or international framework, a number of Member States and other jurisdictions have introduced trade restrictions, including import bans, targeted sanctions and other measures affecting settlement-related commercial activities. Against this backdrop, on 13 July 2026, the Dutch government adopted the Temporary Sanctions Decree concerning Unlawful Settlements in the Territories Occupied by Israel (the “Decree”). In summary, the Decree imposes restrictions on businesses dealing with goods originating from unlawful Israeli settlements though an: (i) import ban; (ii) purchase ban; (iii) sale and marketing ban; (iv) brokering ban; and (v) anti-circumvention rule.

In this briefing, we discuss the scope and effect of the Decree and the developments across a number of EU Member States, UK, and other jurisdictions which have announced a range of similar trade restrictions against Israel.

What is the Decree and how will it apply?

• The Decree applies to all persons and entities established in the Netherlands, including Bonaire, Sint Eustatius and Saba, and also to Dutch persons and entities operating elsewhere within the European Union.
• After 21 September 2026, the Decree prohibits the direct and indirect import, purchase, placing on the EU market, sale and facilitation of trade in goods that are wholly or partly obtained from, or produced in, those settlements.
• Activities intended to circumvent or having the effect of circumventing these prohibitions are also prohibited.
• For the purposes of the Decree, unlawful settlements are identified by reference to the European Commission's postcode list, which is used to determine which locations fall outside the territorial scope of preferential treatment under the EU-Israel Association Agreement. The reference is dynamic, meaning that future amendments to the postcode list may affect the practical scope of the Decree without any formal amendment to the Decree itself.
• An exception applies to goods qualifying for preferential treatment under Article 64 of the Union Customs Code. In practical terms, this exception is intended to ensure that the Decree targets goods originating from unlawful settlements rather than Israeli goods generally, and does not interfere with preferential treatment available under the EU-Israel Association Agreement.
• Notably, the Decree goes significantly beyond the existing EU framework. While the European Union already distinguishes between Israel and the territories occupied since 1967 for customs purposes and settlement goods are excluded from preferential tariff treatment, EU law does not generally prohibit such goods from entering or circulating within the internal market. The Decree converts that territorial distinction into substantive prohibitions on the import, purchase, sale, marketing and brokering of covered goods. According to the Dutch Government, existing measures such as labelling requirements, tariff differentiation and policies discouraging settlement-related business are insufficient to prevent economic activities from supporting the settlements.

What should Dutch businesses do in preparation?

Businesses should be prepared as no transitional period applies. Enforcement will be split between Dutch Customs, which will supervise the import prohibition, and the Fiscal Intelligence and Investigation Service (FIOD), which will enforce the remaining restrictions. Breaches will constitute economic offences and may result in significant administrative and criminal penalties, including imprisonment of up to six years for intentional violations, community service orders and substantial fines. 

Businesses should take the following immediate steps:

• Identify products, customers and activities that may have a link to the unlawful Israeli settlements.
• Classify activities and counterparties by risk level and prioritise enhanced due diligence for higher-risk cases.
• Verify relevant locations against the European Commission’s postcode list and establish a process to monitor updates, as the list is a live document and may change over time.
• Review supply chains, distribution channels and intermediary arrangements to identify activities that may fall within the scope of the Decree.
• Implement appropriate controls and diligence procedures to identify and prevent transactions that may breach, or be viewed as circumventing, the Decree.

Broader context

The Decree forms part of a wider set of national measures adopted by EU Member States and other jurisdictions in relation to unlawful Israeli settlements. 

Most recently, on 8 September 2026, foreign ministers from 12 jurisdictions (Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the UK) issued the Joint Foreign Ministers' Statement on the Two-State Solution, confirming their intention either to introduce national restrictions on trade in goods originating from settlements considered illegal under international law or to support equivalent restrictions at a European level.

While it is not yet clear how each jurisdiction will approach implementation, planned measures can broadly be divided into four categories: 

1. Designations: The UK, Canada, France, Norway, Australia and New Zealand have all imposed sanctions on individuals and entities accused of financing or enabling violence against Palestinians, with coordinated designations announced on 9 June 2026. The EU and other jurisdictions have also made use of their respective global human rights sanctions regimes.
2. Import bans: Similarly to the Netherlands, Ireland and Belgium have enacted bans on imports of goods originating from unlawful Israeli settlements. We also expect the 12 signatories of the joint statement to impose targeted import bans from unlawful settlements, which are likely to focus on agricultural or food products.
3. Services restrictions: A smaller number of jurisdictions have adopted, or are considering, broader restrictions on settlement-related commercial activity. Norway published a bill for consultation in June 2026 which proposes not only settlement-related import and export bans, but also prohibitions on certain property transactions, construction-related services and investments connected with businesses established in unlawful settlements. Spain has adopted a wide-ranging package of measures which include, in addition to import bans, restrictions on defence-related trade with Israel, and a ban on advertising goods and services linked to settlement activity. The UK has also announced a ban on the advertising of unlawful settlements, alongside broader restrictions on services including financing, construction, infrastructure and real estate.
4. Arms and related export bans: In relation to arms and related exports, several jurisdictions have announced additional measures. The UK has confirmed its intention to refuse all licence applications for arms and other exports that “materially contribute” to the occupation, building on the suspension of over 30 arms export licences previously. Spain has introduced a total embargo on exports and imports of defence materials, dual-use goods and related technologies to and from Israel, along with a requirement for transit authorisations for defence materials and dual-use goods moving through Spain, and a prohibition on transit authorisations for fuels with potential military use destined for Israel. Australia has also restricted direct weapons exports to Israel.