The issue has been controversial within and without Israel, with Tel Aviv considering labelling of settler products discriminatory – meanwhile, France published guidelines in 2016 imposing the system on products made in the West Bank and Golan Heights.
French guidelines on such products were challenged by the Organisation Juive Europeene (European Jewish Organisation) and Psagot, a company managing vineyards in the occupied territories. The pair were concerned such labelling would facilitate boycotts, such as those endorsed by the Boycott, Divestment and Sanctions movement, which the government of Israel considers anti-Semitic.
However, the ECJ decisively ruled simply indicating goods originate in the state of Israel, as opposed occupied territory, could mislead consumers over the country’s presence in the territories concerned “as an occupying power and not as a sovereign entity", and product information must allow consumers to make informed choices relating "not only to health, economic, environmental and social considerations, but also ethical considerations" as well as observance of international law.
The regions include the West Bank and East Jerusalem, internationally recognised as illegally occupied Palestinian land, and the Golan Heights, annexed from Syria in 1967, which is only recognised by the US as legal Israeli territory.